Economy expected to grow by 5.5 pc: ADB

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KATHMANDU, April 19 - Continued sound macroeconomic management, coupled with another year of relatively strong agricultural growth, is expected to support growth rate of 5 to 5.5 per cent in the country’s economy in 2001, according to the Asian Development Outlook 2001 (ADO 2001), released today by the Asian Development Bank (ADB).

Launching the ADO 2001 here today, Dr Richard Vokes, Resident Representative of ADB to Nepal, said if the government, as promised, pushed forward with the implementation of the second
round of economic reforms, then the medium-term outlook for sustained growth of the economy is positive.

Apart from the need to continue and sustain reforms in the agricultural sector, civil service and financial sector reform need to be at the core of the government’s broad-based reform agenda, he said.

The newly launched ADO 2001 notes that strong recovery in the agricultural sector in 2000 boosted the economy’s short-term prospects, though long-term sustained growth will depend on progress implementing the government’s broad-based reform agenda.

The performance in 2001 also builds on the strong outcome in 2000 when real GDP increased by 6.4 per cent (up from 4.4 per cent in 1999) fueled by a strong agricultural recovery. A favorable monsoon season and wider use of fertilizer contributed to growth of 5 per cent in agriculture in 2000, when industries increased by 8.7 per cent, led by a 13 per cent growth in manufacturing.

The ADO 2001 mentions that, given appropriate economic policies, Nepal has the potential for growth rates exceeding 5 per cent a year. However, actual performance is still vulnerable to changes in weather and the Indian economy given India’s dominance as a trading partner and Nepal’s narrow industrial base.

While inflation rose by just 3.5 per cent in 2000, owing to stability in prices of food, the ADO 2001 forecasts moderate inflation over the next few years in the absence of any major external shocks to the economy. However, inflation is expected to rise somewhat from the low level of 2000 to around 5.5 per cent in 2001.

According to ADO 2001, the government’s ambitious development expenditure and revenue targets in 2001 will be difficult to achieve. Development expenditures are projected to grow by 45 per cent, financed mainly by increased foreign grants, while domestic revenues are projected to grow by 21 per cent. Actual revenue performance will depend on the effective implementation of the value-added tax, as well as the success of current efforts to boost customs and income tax revenues.

The report projects the current account deficit to rise slightly in 2001 as aid-related inflows continue to increase. After registering a slight surplus in 1999, Nepal’s current account deficit increased to 1.5 per cent of GDP in 2000 due to strong growth in imports.

Given the majority of the poor in Nepal live in rural areas, the ADO 2001 notes the importance of agricultural development in addressing poverty. The government’s continued commitment to the Agricultural Perspective Plan is therefore critical. It is also critical that the government continue to push forward with policy reforms within agriculture so as to further encourage private sector participation in the sector.

The report also highlights the need to boost domestic resource mobilization. "Given the economy’s limited access to foreign capital markets, the savings rate is too low to support the investment needed for sustainable reductions in poverty," it says.

The ADO 2001 has also identified civil sector reform and governance reform as other key areas that affect poverty.

Finally, apart from a special chapter on Asia’s Globalization Challenge, the ADO 2001 features an assessment of economic trends and prospects for the world and for the developing economies of Asia and the Pacific.

Govt plans to create e-villages: Chaudhary

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KATHMANDU, April 19 - Minister for Science and Technology Surendra Prasad Chaudhary has said that the Ministry is planning to create e-villages, but he did not give details.

Minister Chaudhary said this while releasing Computer Science, a book on computer education for class eight students written by NN Pudasaini amid a function here today.

He said that the book was worth reading and will help in imparting computer education to children.

Stressing that information technology (IT) education is the prime agenda of the government, he lamented over the lack of far-sightedness of the policy makers for closing down the only government computer institution the National Computer Center failing to realize its potential.

"While the entire world is bracing for IT education, we closed down an only computer institute. We never plan anything with a vision for 50 years", ululated the cyber-savvy Minister.

He also said that the government has already acquired 200 ropanies of land at Banepa to establish an IT park. Detailed engineering studies have
been completed and construction works will be begun this year, he added.

Lakshya Bahadur KC, Principal of Suryodaya Jyoti Secondary School, said that government should emphasize on computer education to produce desired manpower in future. He also said that the authors and the publishers have done a praiseworthy job by bringing out the book.

NN Pudasaini, the author of Computer Science, said that he had written the book for the students of grade eight but very much in keeping with making it a base for SLC students. He also hoped that the book would help in the government’s policy of introducing computer education from primary school level.

Tej Prakash Gautam, speaking on behalf of Vidhyarthi Pustak Bhandar, the publisher of the book, said that the book was published with a view to help children acquire computer education.

Lochan Lal Amatya, President of Computer Association of Nepal (CAN), said that the book is written in plain English language. He also urged experts to write books on computer to help the general people use computer.

Nepal, Tibet sign MoU

KATHMANDU, April 19 (PR) - Customs officials of Nepal and Tibet have signed a memorandum of understanding (MoU) regarding customs and various issues related to bilateral trade and commerce.

The MoU was signed on Thursday following a series of bilateral talks between the concerned officials from both sides.

Representatives of both sides have agreed to review import and export trade via Tibet and to send Nepali customs delegation on forthcoming trade fair slated in Lhasa in the near future with an objective of studying market and choices of Chinese customers.

The main feature of the MoU is the Chinese acceptance to reduce the customs imposed on export goods from Nepal and levying special custom facilities. The export trade was greatly affected following the increase in the duty of import customs by Tibet. Nepali businessmen were raising their voice to review the provision.

According to a press release issues by the Customs Department, both sides have agreed to meet at Nilagu Customs of Tibet and Tatopani Customs of Nepal in every three months so as to disseminate information regarding the cross border illegal trade.

China has ratified the Nepalese proposal to buy its currency transacted in Nepal at existing exchange rate. Likewise, they have agreed to develop physical infrastructures so as to boost up mutual trade.

Both parties have agreed to sort out problems of any sort by mutual discussions in the days to come and to meet on Lhasa in 2002.

The MoU was signed by Madhav Prasad Ghimire, Deputy Director General of Customs Department and Jhang Wei, Deputy Director General of Lhasa Customs Department.

The seven-member Tibetan delegation was in the Capital for some days, upon the invitation of Nepal and a series of discussions were held between them.

Auditors need to upgrade skills: Auditor General

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KATHMANDU, April 19 - Auditor General Bishnu Bahadur KC has said that accountants
have to upgrade their skills and change the way of their working style to keep abreast of the current trend.

Inaugurating a conference on E-commerce - Security, Control and System Auditing here today, KC said that it has been imperative on the part of our auditors to change their working style in the changed context.

He expressed the views that such conferences would not only help auditors to cope up with the challenges brought by e-commerce, but also help in plugging revenue leakage and efficient mobilization of revenue. Urging the gathering of chartered accountants to be acquainted with modern techniques of auditing, he said the conference would also help in narrowing the digital divide.

Binod Bahadur Rajbhandary, President of the Association of Chartered Accountants of Nepal (ACAN), said that the conference would be an eye-opener for the participating accountants.

Nishith Seth, Secretary of New Delhi Chapter of the Information System Audit and Control Association (ISACA), USA, Prabhu Ram Bhandary, Vice-President of the Institute of Chartered Accountants of Nepal (ICAN) and Robin Pradhan, General Secretary of ACAN also spoke on the occasion.

Organized by the ACAN in collaboration with New Delhi Chapter of ISACA, USA, the two-day conference is being participated by more than 50 chartered accountants.