Views of a Nepali Economist

.
1. $1.6b Chinese loan for West Seti Hydel Project

...Beijing has agreed the loan for the 750 MW project...

2. Handicraft exports rise 11 percent on strong demand from China, US

Exports of Nepali handicraft products climbed 11.71 percent in the last fiscal year...amounting to Rs 3.1 billion in fiscal year 2010-11, up from Rs 2.7 billion in the previous year

Sales to mainland China:
*Rs 92.89 million in 2009/10
*Rs 207.12 million in 2010/11

Sales to Tibet Autonomous Region:
*Rs 33.16 million in 2009/10
*Rs 181.40 million in 2010/11
*That is a 500 percent increase

Sales to the US:
*Rs 739.48 million in 2009/10
*Rs 889.27 million in 2010/11
*US is the main market for Nepali silver handicrafts with exports amounting to Rs 152.9 million last year

*Exports of textile-based goods decreased by 5.08 percent
*Exports of non-textile-based goods increased by 31.72 percent

*Metal crafts were the largest export with a value of Rs 679.3 million
*Woolen goods were second with Rs 495.4 million

*The 10 largest importers of Nepalese handicrafts are (in order): US,Germany, China, Canada, Tibet, Japan, UK, France, Italy and Netherlands.

3. $7.7m Japanese grant assistance for poverty reduction

...for three projects in Nepal aimed at reducing child malnutrition, poverty reduction and greater access to clean energy for rural poor

First of the three projects, ‘Reducing Child Malnutrition through Social Protection’, seeks to enhance the system and processes for planning and delivering the government’s cash transfers, particularly the child grant in Karnali districts

Second project, ‘Support for Targeted and Sustainable Development Programe for Highly Marginalized Groups’ will provide targeted support to Dalits and Janajatis in hills

The third project, ‘Improving Gender Inclusinve Access to Clean and Renewable Energy in Bhutan, Nepal and Sri Lanka’, a regional programme for South Asia, will support the rural electrification programme of the Nepal Electricity Authority

4. Brace for costly Chinese clothes this Dashain

...rise in transportation charges and strengthening of Baht will make garments imported from Thailand expensive by around 10 to 15 percent...Also...price of readymade garments and footwear items imported from China will go up by as much as 40 percent...this Dashain

...valuation of Chinese currency has been increasing at a rate of 4.5 percent every year

...the price of cotton ...hit a 15-year high recently...it has become 80 percent more expensive this year as compared to the start of the last year

5. Jumla apples to be costlier

District Cooperatives Association (DCA), Jumla, has increased prices by 17 percent as compared to prices of the past year

The association has set differential prices based on quality of apples...
Grade ´A´ organic apples at Rs 35 per kg
Grade ´B´ at Rs 30
Grade ´C´ at Rs 20
Grade ´A´ non-organic apples at Rs 30 per kg
Grade ´B´ at Rs 25
Grade ´C´ at Rs 20

Apples produced in 14 wards of Kartikswami, Mahat and Patmara VDCs have received organic food certification from Organic Certification of Nepal.District Agriculture Development Office (DADO) plans to apply for organic certification for apples produced in all 30 VDCs in the district

And, this news should be worrying our government:

The district had produced a total of 3,300 tons of apples last year. But only 55 tons of apples produced in the district could be taken to market last year.

Labels: apples, dashain, foreign aid, handicraft, hydroppower, jumla, poverty, west seti

.
The BIG NEWS: Baburam Bhattarai becomes the 35th (and the most educated) Prime Minister of Nepal. Here is his short profile.

1. Half of households have one member abroad

...52.8 per cent of the total households have at least one member away from home...indicating the startling rise in loss of human capital in the country

...32 per cent families have members away in foreign countries...55 per cent of the total households receive remittance from the members abroad

...Over 354,000 Nepalis left the country last fiscal year to work in foreign destinations...and...that has created dearth in agricultural and industrial labour back home

...Nepal earns about Rs 210 billion from remittance coming in from abroad annually...but...79 per cent of total remittance is spent on daily consumption...and...only a meagre 2.4 per cent of the remittance contributes to capital formation

Although there are people in Nepal that praise remittance for its role in reducing poverty and inequality (both of which have NOT been proven empirically by any studies), there are some aspects of this heavy role of remittance that do not bode well for the country in the long run, especially because:

...empirical evidences also show that the development process of the economy that is dependent on remittance is relatively slower by about 1.5 percent

2.Banks deposit growth rate slows down

...average deposit growth rate slowed down by more than two times compared to a fiscal year ago

Deposits in the commercial banks grew by:
32.25 percent in 2008/09
12.9 percent in 2009/10
10 percent in 2010/11

Deposits with Janata Bank saw surging by 300 percent...Rastriya Banijya Bank has the largest deposit base with Rs 74 billion...Nepal Investment Bank has Rs 50 billion deposits

...saving and credit cooperatives were found to be mobilising deposits worth Rs 122 billion

3. Strike cripples life in 9 eastern districts

...the demand is to make Taplejung, Panchthar, Ilam, Jhapa, Morang, Sunsari, Dhankuta, Sankhuwasabha and Terhathum districts...into the Federal autonomous Limbuwan state

4. Protesting Mustang folks warn of barring tourist entry

...unless the government allocates 60 percent of the tourist royalty for the development of the region

Upper Mustang has not received its share as provisioned by the Local Self Governance Act for the last 16 years...despite the government of Nepal collecting...Rs 770 million in revenue annually through tourism from Upper Mustang since 1993...The government only provides ...a nominal Rs 70 million to the district. As a result, the region still lacks electricity, roads, schools and hospitals. Food shortage is a perennial problem as the topography of Upper Mustang is unfavourable for crops.

2,162 tourists visited Upper Mustang in 2010, up by 30.3 percent compared to the previous year

5. Preparation for Dashain; NRB ups note circulation by 40pc

...Last Dashain saw use of notes worth Rs 20 billion...According to NRB, it is sending clean notes worth around Rs 28 billion for this year’s Dashain

6. Only 10 companies hold 56 percent of Nepal stock exchange's total market capitalization

Company// Share in total market capitalization(%)

Nepal Telecom// 19.43
Standard Chartered Bank// 8.95
Nabil Bank// 7.85
Nepal Investment Bank // 3.83
Himalayan Bank// 3.56
Nepal SBI Bank// 3.26
Everest Bank// 2.81
Bank of Kathmandu// 2.40
Butwal Power// 2.32
Chilime Hydropower// 1.85

7. NOC hikes diesel, kerosene price by Rs. 1.50 per litre

The price of the diesel and kerosene has now reached Rs. 75 per litre from Rs. 73.50 per litre....the price of petrol is constant at Rs. 102 per litre which was increased from Rs. 97 some two months ago

8. Buddha Air tops domestic carrier operations

...in the first half of 2011 with a market share of more than 40 percent

The airline recorded an increment of 21.73 percent in passenger carriage. Except for Buddha Air and Sita Air, all the domestic carriers posted a negative growth in their passenger movement in the first six months.

Buddha’s nearest competitor Yeti Airlines saw its passenger movement dip by 1.55 percent. However, the airline is still the second largest carrier in domestic aviation with 224,062 passengers flying it in the first half of 2011.

...domestic airlines carried 761,043 passengers in the first six months, up 36,160 from last year...

Rate of Growth in Passenger Movement in first-half of the year:
32.05 percent in 2009
19.82 percent in 2010
4.98 percent in 2011

9. Nepalese Internet ...some numbers

*65,000 subscribers at the end of 2009/10
*52,527 subscribers at the end of 2010/11
*Between 2009/10 and 2010/11, number of dial-up users lowered by 33 percent
*Between 2009/10 and 2010/11, number of wireless users increased by more than 70 percent
*Between 2009/10 and 2010/11, wireless users increased by 10,000

*Worldlink is the leading internet provider with 19,858 subscribers
*Broadlink is second with 11,792 subscribers
*Mercantile Communication has 9,445 users
*Subisu Cablenet has 5,276 users
*Web Surfer has 958 users

*Internet penetration of the country has reached 10. 89 percent as of mid-June 2011
*But, nearly 98 percent the total users are GPRS users

Labels: airlines, banks, cooperatives, dashain, internet, migration, mustang, NRB, petroleum, remittance, share market, shutdown

.
1. Nepal will be playing in the Under-19 World Cup Cricket Tournament to be held in Australia next year.

2. More taxpayers brought under tax net last year.

*The target for 2010/11 was to add 150,000 additional taxpayers under the tax net.
*The Inland Revenue Department (IRD)actually added 177,579 taxpayers under the tax net.

*The target for 2010/11 was to add 50,000 institutions and 100,000 individuals under the tax net.
*The IRD actually added 55,478 firms/institutions and 122,201 individuals under the tax net.
*14,785 taxpayers were upgraded to the VAT payers' list.
*216 firms were fined Rs 2.7 billion for tax evasion using fake VAT receipts.

3. Budget for far-west up by Rs 4 billion.

*Total budget for all districts is Rs 87.33 billion in 2011/12
*In 2010/11, far-west received Rs 6 billion which was 8.23 percent of total districts' budget
*In 2011/12, it has been allocated Rs 10.53 billion which is 12.06 percent of total districts' budget

*The budget distribution among the far-western districts is uneven
*Kailali is given Rs 2.54 billion, which is over 20 percent of total far-west budget
*Kanchanpur is given Rs 1.24 billion

*The districts receiving the largest share are:
Kathmandu Rs 2.38 billion
Morang Rs 2.29 billion
Banke Rs 2.19 billion
Rupandehi Rs 1.83 billion

4. Goats in upcoming Dashain is going to get expensive because the Nepal Food Corporation (NFC) has decided to stop selling subsidized goats this year.

*NFC imported 3853 goats last Dashain, of which 250 died at Thapathali office of NFC.
*CIAA, the corruption investigation authority, investigated that case because it suspected the goats did not actually die but were given for free to political leaders and officers.

*In four days--between Saptami and Dashami--Kathmandu consumes 1.2 million kilograms of mutton (goat meat).

5. Nepal bans smoking in public, starting today. Will it succeed? I'm not very sure.

Labels: CIAA, cricket, dashain, far west, smoking ban, value added tax, VAT