Nepal should ensure UK investors of its potential: Shepherd

-By a Post Reporter 

KATHMANDU, Jan 20 - Nepal needs to ensure to the investors that it has substantial market for their products, by making the Indian market more accessible. It was said by British Deputy Under Secretary John Shepherd.

The high level British envoy is in the country from yesterday on a five-day visit to launch partnership in trade between these two countries. Shepherd was talking today to a group of journalists following his meetings with the Prime Minister and other key ministers.

He talked about the objectives of his visit and his impression on the investment environment in the country.

Shepherd said Nepal has a huge potentiality in hydropower and other indigenous items. “But it is not upon the government to harness the hydropower, but private sector should be made aware of the potentiality of the country, and they should come forward,” he said.

When Nepal is talking about the big hydropower projects, it has to be able to assure big companies of their investment, and how practical opportunity the country has stored for themselves, he observed.

In this same regard, Shepherd is hopeful that the planned visit of the Minister will play a significant role to persuade the investors in the United Kingdom.

When Nepal is trying to lure foreign investment, it should be noticed that Britain is the second largest source for direct investment globally. “In order to attract British investors, Nepal needs to carry out a significant marketing effort. Nepal Britain Chamber of Commerce and Industry (NBCCI) can play a major role in this task,” he added.

If Nepal wishes to export its products abroad, it needs to understand that Britain is a gateway to Europe. “Exporting is, however, not easy without links. UK is an open market, so quality products can really sustain in our market,” he added.

Commenting on the experiences of British investor in Nepal, he said he hasn’t interacted with any British investor in Nepal. However, he added, “All have an impression that Nepal needs to further simplify its export to India, and exploit the huge market of its Southern neighbour.”

Shepherd suggested Nepalese press that it should not always bring negative stories about obstacles in industrial environment. “Sometimes a smaller issue raised can cause big concern for the investors,” he said.

According to Shepherd, the decision of the British government to increase pensions and facilities of British Gurkhas has really provided a solution to at least an issue of contention between these two countries.

“I believe we can concentrate more on the enhancement on trade relations between our two friendly neighbours,” he concluded.

Prime Minister assures of scrapping SAF Games tax

-By a Post Reporter

KATHMANDU, Jan 20 - Prime Minister Krishna Prasad Bhattarai has assured the business community of scrapping the SAF Games tax.

The PM made this remark while in an interaction programme with the business community participated by leading industrialists and businessmen of the country.

This was the first meeting of its kind initiated by the Prime Minister after assuming office some six months back.

On the occasion, Premier Bhattarai solicited suggestions from the business community to promote business and industrial environment.

Participating in the interaction programme, Pradeep Kumar Shrestha, President of Federation of Nepalese Chamber of Commerce and Industry (FNCCI) expressed serious concern over existing problems in the business and industrial environment of the country.

Mahesh Kumar Agrawal, President of Nepal Chamber of Commerce informed the Prime Minister of the problems related to Value Added Tax and said the sensitive issue has grown as a chronic problem.

Padma Jyoti, former president of FNCCI appraised the Premier of the tough international competition faced by the local industries and demanded certain degree of protection to them.

Similarly, Chairman of the FNCCI- Employees Council, Rajendra Khetan pointed out the need to reform the existing Labour Act in the context of globalization and liberal economic dispensation.   

Ambika Shrestha, former president of Nepal Association of Travel Agents (NATA) urged the Premier to initiate actions to resume the cancelled flights of Indian Airlines from Kathmandu to various cities of India.

K Maskey, General Secretary of Central Carpet Industries Association (CCIA) requested the PM to mobilize country’s diplomatic missions to promote Nepalese carpets abroad.   

Similarly, Gautam Dash Shrestha, President of Hotel Association Nepal (HAN) demanded concessional rates for the hotel industry on electricity tariffs as offered to the industrial sector.

Govt to monitor garment export from March

-By a Post Reporter

KATHMANDU, Jan 20 - The provisional implementation of the Agreement on Trade in Textile Products, reached between Nepal and the European Union (EU) on March 26, 1999, has been postponed for one month.

The agreement scheduled to come into existence on February 1, will be implemented from March 1, according to the Ministry of Commerce.

Joint Secretary at the Ministry of Commerce Leela Mani Poudyal informed that it was delayed at the request of the EU.

EU is required to provide the sample signatures of the endorsing officers in Nepal to all its fifteen members and the agreement should be published in the gazette of each member nation, thus delaying the implementation.

The agreement requires exporters to obtain Certificate of Origin (CO) of all garment items exported to EU, endorsed by a competent government official, which till now had been carried out by the local chambers of commerce.

Moreover, the agreement makes it mandatory for entrepreneurs to obtain licence for the export of garment items falling in five, of the total 161 categories, as classified by the EU, for the purpose of dual checking of the goods exported from Nepal.

The five categories requiring licence are number 4, 5, 6, 7 and 26, include the major exporting textile items, such as shirts, T-shirts, light weight fine knit roll, jerseys, woven breeches, shorts other than swim wear and trousers, blouses, jumpers and pullovers made of wool, cotton or man-made fibres among others.

The Department of Commerce (DC) is entrusted with the responsibility of endorsing the CO, which is forwarded by the Garment Association of Nepal (GAN) to DC through the local Chambers of Commerce. The department also issues the licence to the exporters.

In the meantime, the Ministry of Commerce and exporters jointly have prepared four criteria, on the basis of which the DC will endorse the certificate of origin of the exporting products forwarded by the chamber of commerce.

The exporter must verify that the products being exported are manufactured in Nepal and also prove the originality of the raw material used in the manufacture of the final products.

If the raw material is procured from abroad, the exporter must produce the customs invoice. If the raw material is acquired from the local market, the exporter must prove that the raw material supplier has cleared all his taxes.

If the raw material is obtained locally from a firm not registered at the Value Added Tax (VAT) Department, the exporter must prove that the firm is registered with the Department of Small and Cottage Industry or must be cleared by Cottage Handicraft Sales Depot.

Similarly, for obtaining licence, the exporter must produce the order of goods or the receipt of advance payment made by the European importer to the Nepali exporter. The licence will also be issued if there is a back-to-back or buy-back arrangement.

This is the first time in eight years that a government office has been entrusted with the responsibility of issuing licence to exporters. There was a licence system for the import/export of various items before 1992.

Acharya stresses to consolidate

agriculture to sustain economic growth

-By a Post Reporter

KATHMANDU, Jan 20 - Minister for Finance Mahesh Acharya has said that the agricultural and manufacturing sectors should be strengthened to sustain the upturn trend in the economy.

Minister Acharya was speaking at the 33rd annual function of the Agricultural Development Bank (ADB) in the capital today.

Informing that an increase in the agricultural output has raised the growth rate this year, Acharya said, “The role of ADB is vital for the growth of agricultural sector.”

He warned that a drop in the agricultural output would lower the growth rate of the economy. As such due attention must be paid for the development of other sectors in order to maintain a high growth rate, he said.

He stressed upon the need for ADB to closely work with other government and private institutions to improve the economy.

In the context of globalization and liberalization, not only strengthening of the economy but special care should also be paid to alleviate poverty.

General Manager of ADB, Devendra Pratap Shah informed that small farmers’ co-operative bank will be opened by next year. He also said that the micro-credit operations of the bank would be handed down to smaller banks under ADB. 

Similarly, Chairman of the bank, Dr Bimal Prasad Koirala informed that the bank is working towards the formulation of programmes and packages aimed at poverty alleviation.

ADB, in the fiscal year 1998/99, made investments totaling Rs 36.2 billion of which Rs 25.49 billion has been recovered.

GATS knowledge vital   for WTO accession

-By a Post Reporter

KATHMANDU, Jan 20 - One of the reasons GATT (General Agreement on Trade and Tariffs) had to be converted into the World Trade Organization (WTO) was because it was limited to trade in goods only. In 1995, when GATT converted into WTO, one of the sharper teeth it had was General Agreement on Trade in Services (GATS).

The world trade in commercial services, which include travel, transport, communications, financial and professional services accounts for more than one-fourth of the total.

The pressure for GATS came from Uruguay Round where developed countries persuaded for it. “These are the countries that dominate trade in services,” said Anthony Halliday, Senior International Consultant at the Ministry of Commerce.

Halliday was addressing a training programme organized jointly by Ministry of Commerce and UNDP for government officials and other professionals today.

These developed countries, according to Halliday, would be the major countries to play role in the accession process of Nepal into WTO. The services exports of the developed countries is as high as 40 percent of their total exports.

According to Halliday, services for the purpose of GATS has been classified in 12 sectors, namely: business, communications, construction and related engineering, distribution, educational, environmental, financial, tourism, recreational cultural and sporting, health and social, and transportation.

“GATS applies to all services except those which, in a particular country, are reserved to government,” Halliday said. He said that GATS applies to four modes of delivery: cross-border, consumption abroad, commercial presence and presence of natural persons.

After acceding to the membership of WTO, a member would commit itself to a minimum level of treatment with respect to four delivery modes: a level of market access as described in its schedule, national treatment to the extent described, any described additional commitments and ensuring that monopolies observe the commitments.

Welcoming the guest on the two-day training programme, Dr Govind Prasad Regmi, Joint Secretary of Ministry of Commerce  said the main purpose of the training programme was to make government officials dealing with services sector, business entrepreneurs, private sector and professional organizations aware of the scope and provisions of GATS.

“As you know, Nepal is preparing for WTO accession, it requires to commit for progressive liberalization of services for WTO membership,” Regmi said. Adding, he said, “Without the support and cooperation of private sector, we cannot defend our national interest in WTO accession.”