Poor women deprived of soft loan after budget freeze

Women who have nothing to pawn to get a bank loan but were looking forward to getting it from the government to start small enterprises on their own have been disappointed after Rs 10 million - which government had allocated to establish a National Woman Entrepreneurship Trust (NEWT) - was frozen in the previous fiscal year 2011/12.
The allocated budget was frozen after the Ministry of Finance (MoF) didn´t work to establish NWET on time. “Technically, the MoF had to coordinate with the Nepal Rastra Bank (NRB) to establish the NWET,” an official at the MoI said. “That has deprived women to get soft loan from the government to start their business.” (break)
The government had announced its intention to establish the NWET with a guideline to operate it. According to the guideline approved by the cabinet in fiscal year 2011/12, women would get up to Rs 300,000 at the 10 percent interest rate. “If they paid back the principle in time, there was a provision to waive off 40 percent of total interest.
The MoI, entrusted to carry out the program, had planned to distribute soft loans to 33 women from three districts each from Terai, hill and mountainous region. “The process should begin again after the budget was frozen in last fiscal year,” Yam Kumari Khatiwada, joint secretary at the MoI told Republica on Sunday.
The ministry was working on to establish the trust as per the provision in the Industrial Policy 2010, which envisages establishment of the NEWT. “The ministry had decided to issue unsecured loans to women following complaints from entrepreneurs who said their access to collateral-free credit was very limited,” Khatiwada said.
Additionally, the industry ministry had decided to mobilize commercial banks to distribute the loan. “In return, the government was planning to provide certain fees to the banks for extending the services,” Khatiwada added.
Khatiwada said many women had approached the ministry for loans. “Now we have asked for Rs 50 million from the MoF for the NWET,” she disclosed, “However, there should be a full-fledged budget in place to establish the trust again.” Unfortunately, the government has to repeat the whole process again to do that.
Similarly, Rs 5 million allocated to establish the Technology Development Fund (TDF) in the last fiscal year was also frozen. The MoI is just working on developing the guideline for TDF. “The money was frozen due to ministry´s inability to endorse a guideline in time,” Bishnu Dhakal, under secretary at the MoI said

Bangladesh to provide zero-tariff facility to Nepali agri products

Bangladesh - one of the few countries with which Nepal enjoys trade surplus -- has agreed to provide zero-tariff facility to Nepali agriculture products such as lentils and tomato.
According to Commerce Secretary Lal Mani Joshi, Bangladesh unilaterally announced to provide zero-tariff facility to Nepali agricultural products at a bilateral meeting held on Sunday.
“High-level Bangladeshi officials agreed to provide zero-tariff facility on Sunday. However, formal agreement to this effect will be signed on Monday,” Joshi said.
Nepal had been requesting for such a facility for more than a decade. It had been failing to secure the facility mainly Bangladesh was expecting similar treatment for Nepal. But it hadn´t materialized as bilateral treaty between Nepal and India bars Nepal from providing equal or more favorable tariff treatment to any third country.
“Bangladesh has finally understood our position and agreed to grant zero-tariff facility unilaterally,” Joshi said, adding, “It is a great achievement as it might help us fined a new market for our agricultural products.”
The Nepal Trade Integration Strategy (NTIS) - a blueprint to boost export - has identified Bangladesh as third major destination for ginger.
The meeting, however, could not reach to an agreement on operation modality for transit route. “We are close to forging an agreement on the issue. But we won´t sign it now,” Joshi said, adding, “We will hand over the draft agreement to a technical committee. That committee will pave the way for us to sign the pact.”
Nepal and Bangladesh had okayed the draft of the operation mechanism of transit route during the commerce secretary-level talks held in Dhaka in 2010. Once signed, it will pave the way for Nepal to use Mongla and Chittagong ports for international trade. It will also resolve problems faced by traders on the overland transit route of Kakarvitta-Fulbari-Banglaband.
However, traders doubt smooth operation of this land route as India has not improved the roads conditions and eased movement of transit traffic along the Kakarvitta-Fulbari and Fulbari-Banglaband segments of the route.
Meanwhile, officials also held discussions on problems faced by traders from both the countries.
Nepal´s exports to Bangladesh presently stand around Rs 3.3 billion, whereas imports from Bangladesh stand at around a billion rupees.

Investment Year over before it began

With political imbroglio deepening amid government trying to enact a new law to clear way for elections without political understanding, both the government officials and private sector has lost hope of implementation of much-touted Investment Year, which the government announced last year with an ambitious plan to bring US$ 1 billion foreign investment within the first half of 2012/13.
In fact, top government officials as well as leaders of Federation of Nepalese Chambers of Commerce and Industry (FNCCI) said the program was ´dead´ even before it came into being.
A few months ago Investment Board (IB), which is entrusted to implement the program, had informally announced that the program has been postponed for six months - meaning it planned to launch it from January 2013 - to keep the hope alive. But the status of the government, lack of parliament and the latest confusion over holding elections on November 22 has made even late implementation of the program doubtful.
“Worse part is that the government itself does not seem serious toward the Investment Year. Had it been, it would have taken steps to enact laws and policies that it promised to the investors, instead of elections bill,” said an IB official.
The private sector that was excited to work with the government to lure foreign investment expressed similar doubt. “We were hopeful the government would bring oppositions on board and clear the way for the Investment Year. But latest widening of differences has made us realize the Investment Year is over even before it has begun,” said Pashupati Murarka, vice-president of FNCCI.
The idea of Investment Year was conceived and floated by the FNCCI in 2011 and Finance Minister Barsha Man Pun readily adopted it. Prime Minister Baburam Bhattarai instantly announced that the government would mark 2012/13 as the investment year. He even committed numerous policy and legal reforms to attract FDI.
“No foreign investor can think of coming here to invest where even domestic investors are losing confidence,” said Murarka.
The government did hand over 14 mega projects such as West Seti Hydro Project and Kathmandu-Terai Fast Track to the IB for roping in foreign investors on May 26. But the situation suddenly turned unfavorable when the Constitution Assembly (CA) was dissolved on May 27.
“The dissolution of the CA was the first setback for the Investment Year,” an official at the Prime Minister´s Office said. Political differences have only deepened doubt over the implementation of the program.
The government has not taken a single initiative that demonstrates its willingness to welcome foreign investors, said Keshav Acharya, former senior economic advisor of the Ministry of Finance (MoF). “This indicates the government´s priorities have changed now. The investment year mission is over.”
IB officials do not completely agree with Acharya, but what they admit is the prime minister has neither held any meeting nor taken briefing from the board. “This has left us utterly confused whether we should continue with our ground works,” said the senior IB official.
As a result of this confusion, the board has slowed its works to identify the 50 seleable projects. It is also uncertain whether it should work out schedules and start preparations for the road show meant for promoting Nepal for investment.
“We have identified seven areas to offer to the investors. But the progress on short-listing the projects has remained slow,” the official said.

Industrial Promotion Division facing budget crunch

The Industrial Promotion Division at the Ministry of Industry (MoI), which is entrusted to look after the entire industrial sector, has been reeling under severe fund crunch.
The government had allocated just Rs 4.2 million for the division in fiscal year 2011/12.
“That´s a very meager allocation,” a high-level official at the industry ministry told Republica.
The division, which is working to breathe a new life into sick industrial units, received just Rs 884,000 in the partial budget for 2012/13. “The division even couldn´t spend meager allocation of Rs 4.2 million in 2011/12. It spent just Rs 2.6 million - 63 percent of the total allocation during the year,” Bishnu Dhakal, under secretary at the MoI, said.
The division, which is working to finalize the draft of Industrial Enterprises Act (IEA), developing an action-plan to effectively implement Industrial Policy 2010 and preparing the draft of Technology Development Fund Regulation, does not have institutional capacity to perform these tasks.
“Leave alone developing infrastructures and facilitating industries, we don´t have budget for even small activities like carrying out study and holding consultation meetings,” said Dhakal.
The government´s indifference to the industrial sector is reflected in the country´s industrial growth. Growth rate of country´s manufacturing sector has been declining since 2002/03.
The division even doesn´t have budget to conduct technical study to finalize the list of sick industries. “We have sought the assistance of the finance ministry to conduct technical study,” Dhakal said, adding, “We have yet to hear from the ministry.”
Meanwhile, foreign ministry officials claim that the division is so incapacitated that it has failed to design new programs.

Bangladesh hints at zero-tariff facility to Nepali products

Bangladesh has indicated it could provide duty-free market access to Nepali agricultural produces such as tomatoes and lentils when top trade officials of the two countries meet in Kathmandu next week.
“Bangladeshi officials have informed us that they are positive at providing zero-tariff facility to selected Nepali products, which have competitive edges in Bangladeshi market,” said a reliable source at Ministry of Commerce and Supply (MoCS).
He informed Republica that they were expecting a concrete announcement to this effect from Bangladesh when Commerce Secretary of the two countries will sit for talks starting from July 29.
Nepal had been requesting special treatment to its products, particularly agro produces, since almost a decade. But it has failed to secure the facility mainly as Bangladesh is also asking for the similar facility from Nepal.
Such demand from Bangladesh had forced officials to step back because existing bilateral treaty between Nepal and India restricts Nepal from providing equal or more favorable tariff treatment to any third country.
“Thankfully, Bangladesh has finally understood our constraint. We are optimistic the upcoming bilateral trade talks will finally bear fruit,” said the source.
Commerce Secretary Lal Mani Joshi, who is leading the talks, however, refused to talk on the message received by the ministry. He confirmed the date of the meeting though.
“We have not been able to penetrate the market despite the huge demand for lentils and tomato in Bangladesh,” he stated. During the talks, he said he would continue to his push for the duty-free facility to the Nepali products in order to expand the bilateral trade.
The commerce secretaries of the two countries, who are holding talks after a gap of two years, are also scheduled to discuss issues such as additional infrastructure development along the bordering areas, identify problems faced by their respective traders and work out ways to solve them.
They would also discuss over signing a mechanism for operating the transit routes between the two countries and work for sorting out quarantine related hassles. “We will also review the status of implementation of agreements that we had reached during the previous meetings,” said Joshi.
Nepal and Bangladesh had agreed on the draft of the operation mechanism of transit route during the commerce secretary-level talks in Dhaka in 2010. Once signed, it will pave the way for Nepal to use Mongla and Chittagong ports for international trade.
Likewise, it will also sort out problems faced by traders on the overland transit route of Kakarbhitta-Fulbari-Banglaband. Despite that, officials doubted smooth operation of this land route as India has not improved the roads conditions and ease movement of transit traffic along the Kakarvitta-Fulbari and Fulbari-Banglabanda segments of the route.
Nonetheless, if Bangladesh provided duty free facility for agro-produces, private sector believes Nepal´s export to this South Asian neighbor would rise significantly.
Records show, Nepal´s exports to Bangladesh presently stands at around Rs 3.3 billion, whereas its imports from Bangladesh stand at around a billion rupee.

Govt opens rice export with quantitative restriction

The government has lifted a four-year-old ban on rice export paving the way for the country to export of upto 10,000 tons of rice from the two customs points - Rasuwa and Tatopani - to China.
Initially, Ministry of Commerce and Supplies and Ministry of Agriculture Development (MoAD) had proposed that export be opened for 50,000 tons of rice from those customs for this year. But the Office of the Prime Minister and Council of Ministers (OPMCM) lowered the export ceiling when it issued the final decision.
“Traders can now export 5,000 tons of rice from each of the two customs points,” commerce secretary Lal Mani Joshi told Republica on Tuesday. “Prime Minister Babu Ram Bhattarai declined to approve export of 50 thousand tons of rice, citing the rising price of food in the domestic market.”
Officials said the amount of export opened was too little for farmers to enjoy better price for their produces.
According to MoAD, the country enjoyed food surplus of 443,000 tons in the fiscal year 2010/11. It has forecast a food surplus of about 800,000 tons for previous fiscal year 2011/12, of which 300,000 tons will comprise rice.
The preliminary estimation of crops production of MoAD shows that paddy reached 9.45 million tons in the fiscal year 2011/12, up 9.8 percent compared to the previous fiscal year and 21.8 percent compared to the fiscal year 2009/10.
“It might lead to unintended consequences,” Joshi said. “Opening export of rice in a large quantity might result in shortage of food in the domestic market.” The government´s decision to lift up the ban has been published in the gazette this week.
The Department of Commerce and Supply Management (DoCSM) is preparing to provide license to the traders. “Traders have to apply to get the license for export of rice and the DoCSM will make a decision to provide license with quota restriction for them to export,” Joshi said.

NBF fails to meet the target: Govt officials

After almost two years of formation of Nepal Business Forum (NBF) - a common platform to conduct public-private dialogues to remove barriers for entrepreneurship - experts and government officials have questioned its ability to coordinate, orient and institutionalize itself to achieve the targeted goals.
“The NBF has been inefficient to coordinate between private and public sector, failed to orient different stakeholders and most importantly it has not yet institutionalized even after two years of full-fledged work,” Mahendra Gurung, joint secretary at the Office of the Prime Minister and Council of Ministers (OPMCM) said. “This is unfortunate.”
The NBF was formed in May 2010 through an executive order of the government aiming to harmonize the business environment in the country with the help of International Finance Cooperation (IFC). Speaking in a program organized by the NBF secretariat in Kathmandu on Tuesday Gurung said, “There are multiple reasons for the NBF´s slackness, one of the major reasons is that the private sector has not owned this platform.”
Briefing the government´s initiation to launch the e-licensing portal within a couple of weeks to ease the process of getting license for businesses, Gurung said the private sector should be more competitive and sound in its work. “Definitely private sector has the right to knock the government´s door for different facilities, but they should come up with strong basis and measured arguments,” he said.
Anil Kumar Thakur, joint secretary at the Ministry of Industry (MoI) said that the growth rate of industrial sector was declining continuously despite various efforts. “We have failed to achieve the goals that we had set while forming the NBF,” he said in his inaugural speech in the program.
Meanwhile the NBF secretariat has claimed that there have been multiple achievements in last two years. “Tax payment days have been reduced from 34 to 22 days which has resulted in over USD 4.38 million cost saving for the private sector, the export of Pashmina has increased by 50 percent after registration of Pashmina trademark in 41 countries, elimination of provision of Rs 100 million authorized capital for issuance per MW hydro power survey license are major achievements,” Gopal Prasad Tiwari, coordinator of the NBF shared at the program.
Similarly, he presented achievements such as allocation of Rs 10 million to establish a Women Entrepreneurship Development Fund, harmonization of customs hours between India and China to facilitate trade related procedures and transactions, elimination of illegal tax collection in Biratnagar resulting easy movement of trucks and public buses.
Interestingly, private sector representatives didn´t agree with the achievements shared by the NBF coordinator. “I wonder where these achievements were made,” Manish Agrawal, an official from the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) said.
However, Surendra Bir Malakar, former president of Nepal Chamber of Commerce (NCC) blamed the political situation.