Views of a Nepali Economist

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1. Nepal's 238 percent tax on imported vehicles is a waste of taxpayers' money

2. Nepalese Commercial banks show low trust on other Financial Institutions

3. US Ambassador to Nepal says "It's the economy, stupid."

4. British Army announces Gurkha troop reduction

5. China promises to promote tourism in Nepal

6. Department of Customs suspects capital flight using fake bills

...The department has unearthed fake abbreviated customs declaration forms...there could be two reasons behind producing fake abbreviated customs declaration forms: to produce legal documents to the imported goods through illegal points or to misuse foreign currency

The department has suspected capital flight by two Birgunj-based firms — Shyam Galla and JB traders and arrested them. It is estimated that some Rs 300 million has been misused by Shyam Galla and Rs 160 million by JB Traders

The issue had come into the light after police on August 29 nabbed five people with fake customs declaration forms. They were trying to get more than Rs 7.52 million transferred to India on the basis of the counterfeit documents.

7. Food security situation remains stable in Nepal

...attributed to a good harvest of winter crops (April-June) and employment opportunities generated by development aid...wheat and barley production increased by 12.2 per cent and 9.6 per cent respectively compared to last year

...but, 28 Village Development Committees (VDCs) in the south-western belt of the district as highly food insecure...because of...a 60 per cent reduction of wheat and spring paddy production due to a dry spell, which was cumulative to the 2010 reduction of 40-60 per cent in the main paddy production.

Parts of the Eastern Hill and Mountain districts are reported as moderately food insecure...Most of the Mid and the Far Western Hill and Mountain districts reported a food secure situation...a seasonal deterioration is reported in part of the Eastern Hill and Mountain districts where the winter crops of wheat and barley are cultivated in limited areas and do not play a vital role in food security...situation in upper Dolpa and some Village Development Committees in the northern and the southernbelt of Baitadi are likely to deteriorate to the highly food insecure phase during the next cycle as there will be no incoming harvest and employment opportunities as well as market supply will be affected by monsoon

According to the central bank, High food prices remain a concern. The year-on-year inflation, measured by the Consumer Price Index, increased by 8.8 per cent in mid-June 2011 whereas the indices of the cereal subgroup increased by 10.4 per cent.

8.Tourist arrivals via air up by over 26 percent in August...Some Numbers

*arrivals from South Asian region have gained robust growth of 38.7 percent
*India 50 percent
*Bangladesh 20.9 percent
*Sri Lanka 11.7 percent
*Pakistan 1 percent

*arrivals from other Asian regions have also registered growth by 57.2 percent
*China 157.6 percent
*Malaysia 95.2 percent
*Thailand 55.6 percent
*Singapore 51.6 percent
*Japan 9.5 percent
*Arrivals from South Korea declined by 10.7 percent

*arrivals from Europe registered overall positive growth of 0.9 percent
*Germany 51.5 percent
*Belgium 28.2 percent
*Denmark 16.2 percent
*Italy 9.3 percent
*Sweden 7.5 percent
*UK 3 percent
*Arrivals from France declined by 13.8 percent
*Arrivals from Netherlands declined by 11 percent
*Arrivals from Russia declined by 31.2 percent
*Arrivals from Spain declined by 10.3 percent

*arrivals from Australia registered growth of 19.7 percent
*arrivals from New Zealand registered growth of 7 percent

*arrivals from USA registered growth of 16.9 percent
*arrivals from Canada registered growth of 33 percent

*49,858 foreign tourists departed from TIA in August 2011.
*52,811 Nepali arrived while 64,326 departed from TIA in August 2011.

Labels: banks, capital flight, china, customs, financial institutions, food security, gurkhas, imports, tourism, vehicle tax

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1. Korean Language Test results out
*50,043 applicants had taken the test
*only 15,298 passed
*13,298 applicants will work in production related job and remaining 2,000 in agriculture sector
*South Korea is a lucrative destination for Nepali workers with a monthly average income of $1,000

2.Deposits in commercial banks up in Q4

RBB, which has the highest deposit base among commercial banks, saw its deposits rise 13.44 percent in Q4 against a growth of 4.02 percent in the previous quarter. The bank collected deposits worth Rs 8.75 billion during Q4. RBB’s total deposits as of the end of fiscal 2010-11 amounted to Rs 73.92 billion.

Nepal Bank Limited collected more than Rs 4.47 billion in deposits during Q4. Its total deposits at the end of fiscal 2010-11 stood at Rs 46.80 billion, up 10.56 percent from the previous quarter.

Agricultural Development Bank saw its deposits going up 6.17 percent in the last quarter against a growth of 1.61 percent in previous quarter.

3. Chinese team to study Ring Road widening has arrived in Kathmandu

The 18-member team has geotechnical engineers, traffic engineers, material engineers and other technical experts.

The team will spend 40 days in Kathmandu to do a survey for widening 9.5 km of the 27-km long Ring Road in the first phase.

The Ring Road improvement project will upgrade the current four-lane road to eight lanes (a four-lane, two-way main road, a four-lane, two-way relief road, a two-way bicycle path and a two-way pedestrian path, including bus stations and parking lots).

The road widening work is expected to be completed by 2013 utilising resources received as grant assistance from China annually.

On Feb 28, 2011, the Chinese government had agreed to provide a grant assistance of RMB 50 million (Rs 547 million) for widening the Ring Road and other projects. The technical team will design a simple urban flyover; three pedestrian overpasses will also be built. Even though the locations for the flyover and overpasses have not been fixed, the project is likely to select Kalanki Chowk to build the flyover with a signalised intersection underneath for pedestrians.

4. Indian overland tourist arrivals up 74pc

*298,821 Indian tourists visited Nepal in 2009 via land routes
*520,522 Indian tourists visited Nepal in 2010 via land routes
*This is a 74 percent increase

*154,086 third-country tourists entered Nepal by land in 2010

*Major entry points for Indian tourists were: Vittamod (Janakpur) with 17 percent, Birgunj with 13 percent, Kakarbhitta with 8 percent, Biratnagar with 5 percent, Nepalgunj and Mahendranagar with 3 percent each and Dhangadhi with 1 percent.

*96,928 vehicles entered Nepal through eight border points in 2010, an increment of 22 percent over the previous year's figures.
*46 percent of tourists coming via Indian land routes came by public bus and 39 percent by private vehicles.

*For 2010:
Entry Point // Number of Tourists // Percent Of the total
Birgunj // 89,544 // 13 Percent
Vittamod (Janakpur) // 112,038 // 17 Percent
Kakkarbhitta // 55,098 // 8 Percent
Biratnagar // 32,320 // 5 Percent
Nepalgunj // 17,919 // 3 Percent
Dhangadhi // 8,730 // 1 Percent
Mahendranagar // 21,117 // 3 Percent
Bhairahawa // 337,842 // 50 Percent

5. BFIs barred from opening accounts amongst themselves
According to the NRB:

Financial institutions should collect deposits and lend...If they park their deposits in other institutions, it will create anomalies. Therefore, we have decided to stop it

I believe this is a good step by the NRB especially because:

NRB’s latest statistics show that commercial banks have deposits worth Rs 670 billion, development banks Rs 90 billion and finance companies Rs 84 billion.

6. Whole-Genome Study proves that Nepalese UN-peacekeepers brought Cholera to Haiti that has killed 6000 people so far

7. Bhutanese refugee numbers in Nepal nearly halved after re-settlement overseas

8. New Hydropower rules in Nepal makes it difficult for Indian investors to invest in Nepal

Labels: ADBL, Bhutan, china, cholera, haiti, hydroppower, korean language test, liquidity, migration, NBB, nepal rastra bank, refugees, ring road, tourism

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1. The world's current credit rating. As the picture shows, Nepal is not rated.


2. How do you sell your country's centuries of history? Well, learn it from the corrupt Nepalese politicians and bureaucrats.

3. More Nepalese are traveling outside Nepal as tourists.

























4. Nepalese government to guarantee jobs to the poor.

5. Phillips Curve shows the relationship between the inflation and unemployment rate in a country. It suggests that these two macroeconomic variables have an inverse relationship i.e. when inflation is low, unemployment is high, and vice versa. The graph showing this relationship is below:


Does this mean Phillips Curve fails in the Nepalese context? Because we are suffering from "high inflation" and "high unemployment" at the same time. I don't know. Maybe some other factors are at play.

Labels: corruption, credit rating, jobs, tourism, unemployment