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VOL. 28, NO. 14, Dec 12, 2008 (Mangsir 27 2065 B.S.)
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Hitting Home
The global financial crisis is gradually showing its impact on Nepal
By SANJAYA DHAKAL
The first signs of global financial crisis hitting the Nepali economy have emerged.
In the last couple of weeks, Nepali businessmen have lost over Rs 1.5 billion due to sudden decline in the price of industrial raw materials.
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Finance Minister Dr Bhattarai: Facing crisis |
"Our investigations show that 102 companies had opened LC to import materials like plastic granules, MS billet, soybean oil, crude palm oil whose prices fell suddenly by over 50 percent. If we calculate their losses, that comes to around 1.5 billion," said Krishna Bahadur Manandhar, acting governor of Nepal Rastra Bank (NRB).
He said that the NRB has also decided to help the losing businessmen. "We have decided to extend the period for payment of their bank loans from 90 days to 180 days," he said.
Other than that, the authorities are saying that Nepal has not yet felt any problem from the global meltdown.
The government has also formed a taskforce headed by National Planning Commission (NPC) vice chairman Dr. Pitambar Sharma to study likely consequences of global crisis to Nepal and suggest ways to face them.
Manandhar, who is a member of the taskforce, said that they have not yet found problem in sectors like banking, real estate, foreign employment and tourism.
"We have examined the exposure of our banks to the investment in real estate. It has been found that of their total loan disbursement only 13 percent has gone to the real estate, which is not staggering," said Manandhar.
He also said that the problem has not yet been seen in remittance. "The flow of people to countries like Gulf states have not decreased and neither has the flow of remittance earning," he said.
Earlier, Finance Minister Dr. Baburam Bhattarai had said that the ongoing global financial crisis will have minimal impact on Nepal.
Speaking at the Constituent Assembly (CA), Thursday (Dec 4), FM said that since Nepal was neither too much linked with the global market nor totally aloof from it, the impact will be very negligible.
He said that since the government has already formed a panel to study the likely consequences of global crisis on Nepal, the government will proceed based on the panel's recommendation.
On Thursday, CA member and an industrialist Binod Chaudhary had tabled a motion of public importance drawing the attention of the government on the global crisis and its likely impact on Nepal.
Speaking at CA, FM said that the government was encouraged by the growth of revenue collection by 34 percent in the first three months of the current fiscal year. He also said that remittance earning has increased by 80 percent in this period to reach Rs 50 billion. Foreign exchange reserve has rose to Rs 228.3 billion, which can sustain imports for ten months. The exports to India, he said, rose by 10.1 percent against 0.6 percent in the same period last year.
Likewise, export to third countries also increased by 58.3 percent compared to 11.9 percent in the same period last year. He conceded that the importers of petroleum products and their by-products, crude palm oil, soybean oil, MS Billet and plastic granules had suffered losses due to worldwide economic crisis.
However, businessmen are feeling nervous that the global crisis, which has already affected the economic growth rate of China and India, would have devastating effect on Nepal.
"There is no question that the crisis will affect us. But it could take few months or a year," said Suresh Kumar Basnet, acting president of Nepal Chamber of Commerce (NCC).
Experts have suggested authorities to keep a close tab on the global happenings to avoid catastrophic impact on Nepal.
Comrades In Conflict
The refusal by former general secretary Madhav Nepal to join the political coordination committee exposes rift within the second biggest ally in the coalition government
By SANJAYA DHAKAL
The conflicts within the second biggest ally in the coalition government, the Unified Marxist Leninist (UML) have started to emerge. And, that, too, in a very dirty manner.
The comrades are engaged in slinging mud – even if they are sugar coated till now.
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UML Leaders Khanal (left) and Nepal: Comrades in conflict |
The most tell-tale sign of the conflict in UML came to the force when its former general secretary Madhav Kumar Nepal made a surprising decision to decline to be member of the high-level political coordination committee.
Although his name along with Surendra Pandey was forwarded by UML general secretary Jhal Nath Khanal, Nepal refused to be its part.
With his refusal, the much-touted high level political coordination committee fell flat the same day it started its formal job. Nepal who was to take over the committee as its coordinator claimed that he was not informed about its formation.
"I hear they have included me as a member. I won't be a member of a committee where there is no participation of Prime Minister," he said speaking in Jumla on Thursday. "We will also send our representation at the similar level," he added.
Instead of taking part in the first meeting of the committee, Nepal left Kathmandu – where he had arrived on Wednesday (Dec 3) after foreign visit – for Jumla showing his lack of enthusiasm over its formation.
But his claims were refuted by Surendra Pandey, said to be close to general secretary Khanal. "In fact, the Prime Minister himself had gone to his residence seeking his consent to head the committee and he had agreed," Pandey said.
The contradictions in their statements expose the growing rift between Nepal and Khanal. On the sidelines, the war of words is also taking place between two other powerful UML leaders. A day after Deputy Prime Minister Bamdev Gautam claimed that country could face civil war in absence of army integration, KP Oli called that statement 'nonsense' and asserted that Maoist combatants cannot be integrated into national army.
Meanwhile, the first meeting of the committee held without Nepal's participation had set its working guidelines and jurisdiction Thursday (Dec 4). The meeting of the committee held at parliamentary party office of the CPN (Maoist) in Singha Durbar adopted the guidelines prepared by big three parties with minor amendments.
The committee will immediately look into efforts made towards improving security situation, implementation of the agreements reached with various agitating groups in the past and ongoing negotiation with the Terai armed groups.
The committee will meet again on Friday to chalk out its initial works. The committee has been formed to coordinate with government to ensure common minimum programs announced during the formation of the new government are implemented effectively.
The committee has 12 members – two each from the six ruling parties. The meeting of the committee, in absence of UML leader Madhav Kumar Nepal, named Maoist leader Dev Gurung as its chief for the time being.
The UML will be represented by Nepal and Surendra Pandey, CPN (Maoist) by Gurung and Barsha Man Pun, Madhesi Janadhikar Forum by Upendra Yadav and Sarat Singh Bhandari, Sadbhawana Party by Laxman Lal Karna and Ram Naresh Raya, Janamorcha by Lila Mani Pokhrel and Girijaraj Mani Pokhrel and CPN (United) by Chandra Dev Joshi and another member yet to be nominated.
Promoting Bilateral Trade
Bangladesh trade fair helps to explore the market to increase the bilateral trade
By A CORRESPONDENT
With the opening of Pulbari trade and transit route, the trade volume between Nepal and Bangladesh increased by many folds as Bangladesh became Nepal's major importer of lentils, rice, wheat and other agriculture products.
From a few million rupees, now the trade volume has crossed about Rs.300 million (US$ 500,000) a year.
Inaugurated by Foreign minister Upendra Yadav and Minister for Commerce and Supplies Rajendra Mahato, Bangladesh Single Country Trade Fair 04-07 December, 2008 was able to attract a large number of Nepalese traders, businessmen and common people.
"Bangladesh Single Country Fair 2008 would encourage the business community of Nepal and Bangladesh to move ahead and accelerate the trade and economic cooperation between the two countries as this fair had offered an opportunity to Nepalese people and the business communities to have glimpses of the quality of products at internationally competitive price. The fair would further promote understanding among the people of the two countries," said Imtiaz
Ahamed, ambassador of Bangladesh to Nepal.
Participated by 37 Bangladeshi business firms, the fair has products ranging from saris and Handloom products (Jamdanee, Silk and Moslin Sarees), readymade garments, Jute products, food products, melamine products, handicrafts, bed cover, wall mat, jute bag, artificial flowers, leather goods, knit woven items cosmetic, herbal beauty products and others. For the four days, United World Trade Center in Tripureshwor was full of visitors who came to see the single country fair.
"In this second visit to Nepal, I found more interest in the products of Bangladesh. There is a good possibility to export our products to Nepal," said Bilkis Islam, Abbas Boutiques Enterprise of Dhaka. "This is the place for negotiation rather for sale of our products."
Nepalese, too, find good opportunities. "Their sarees and handloom products are comparatively better than what are available in the market now," said Sangita Dhungel, who came to visit
the trade fair. "I bought the goods worth of about Rs. 8000 (US$100)."
Business entrepreneurs to see there is possibility of increasing the trade volume between the two countries. "We need to explore more market. There are a lot of possibilities to find market in both the countries," said Laxmi Bahadur Shrestha, president of Nepal Bangladesh Trade and Commerce. "Even there are possibilities to have joint venture in Hydro-power sector."
After the opening of new trade route via Phulbari, the trade volume between Nepal and Bangladesh has gone up and the trade is in Nepal's favour now as there are huge demands of Nepalese agriculture products in Bangladesh.
Organized by Embassy of Bangladesh, the trade fair helps Nepalese to know about Bangladesh. Although Nepal and Bangladesh are very close, major of Nepalese people are yet to know about it.
"This is a good opportunity to further promote the existing trade relations between the two countries. We can learn a lot from the experience of Bangladesh in industry sector," said Rajendra Mahato, Minister for Commerce and Supplies. "The government is giving high
priority to diversify Nepal's trade with Bangladesh," Minister Mahato told Spotlight.
In the context of all South Asian countries' agreement to implement South Asian Free Trade Agreement, Bangladesh Single Country Fair is significant in exploring trade complementarities.
