ASPR team to submit inception report soon

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KATHMANDU, June 29 - The nine-member Agriculture Sector Performance Review (ASPR) team, which is entrusted with the task of studying Nepal’s performance in the agricultural sector, is preparing to submit its inception report to the government anytime soon.

According to Dr Richard Vokes, Resident Representative of the Asian Development Bank (ADB), the inception report is likely to be presented "very soon." Furthermore, the government, ADB and other concerned parties are slated to hold discussion on the report on July 10 and 11.

The inception report is the first step towards carrying out an assessment of Nepal’s achievement in the agricultural front, which lays down the various activities that the ASPR team would undertake in the next eight months.

The actual agricultural sector review will kick off only after the inception report is cleared both by the government and the ADB. The review, which is to continue till January 2002, is being carried out with technical assistance of the ADB.

During the review period, the team will assess Nepal’s achievement vis-a-vis the 20-year long Agricultural Perspective Plan (APP), in addition to analyze other factors that have a bearing on the agricultural sector. The APP, implemented since 1997, is a mega-plan of the government that aims to revamp the same sector.

"The review is being carried out, among others, to identify the possible flaws in the implementation of agriculture-related projects and policies," Dr Vokes said. Furthermore, the assessment would also help to readjust some of the ambitious targets envisaged in the APP that might prove redundant in the changed context.

The team comprises of three international consultants from New Zealand based ANZDEC Consultants and six Nepali consultants from CMS Nepal. Francesco Goletti leads the international group while Abhilesh Pant leads the Nepali side.

The team would work under a steering committee participated in by the Ministry of Agriculture and Cooperatives (MAC), Ministry of Finance (MoF) and the National Planning Commission (NPC).

National interest on WTO bid stressed

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KATHMANDU, June 29 - At a time when experts are stressing upon the need to concentrate on multi-dimensional effects of accession to the World Trade Organization (WTO), Bhanu Prasad Acharya, Secretary at the Ministry of Industry, Commerce and Supplies has stressed that the ongoing homework should focus on safeguarding the national interest.

Speaking at a program organized by Pro-Public to discuss on the findings of a study on Trade Related Intellectual Property Rights (TRIPs), he said that agreement on TRIPs has been the most controversial debate within the WTO.

Referring to the TRIPs related comprehensive study of Pro-Public, he said that the study would be helpful to the government in analyzing the advantages and disadvantages of accession to the WTO and to take precautionary steps to minimize possible negative impact on the national economy.

Commenting on the report presented by Ratnakar Adhikari, Chief of the study team of the Pro-Public, secretary Acharya urged to make the report more conclusive through extensive and in-depth consultations among the experts. He also urged to submit valuable recommendations of the report to the ministry within a week.

The study was conducted by Nepal’s Accession to WTO project, funded jointly by the Nepalese government and the United Nations Development Program (UNDP) through Pro-Public, an NGO actively involved in trade related issues. A three-member committee had carried out an in-depth analysis of the various impacts of TRIPs agreement in India, Thailand, Brazil and South Africa and has made a number of recommendations for Nepal.

Speaking on the occasion, Adhikari said that prospect of achieving high economic growth after the enforcement of TRIPs agreement has least possibility. "No concrete evidence has been found that the current pace of economic growth would be accelerated after accepting TRIPs agreement," Adhikari said. He also ruled out a huge inflow of investment in hydropower in the near future.

Stressing upon the need of a comprehensive homework before engaging with TRIPs agreement for a developing country like Nepal, he informed the gathering that developed countries had entered into the agreement after achieving certain level of economic upliftment.

He further remarked that though there is possibility that the patent right to the intellectual property might help to boost foreign investment, much concentration of FDI in the sectors like banking and hydropower has minimized the possibility of further expansion of FDI.

The lack of practice of patenting innovations in Nepal has greatly hindered to secure due profits of the investment made in the same. He informed that altogether 44 patents have so far been made with the foreign cooperation.

On the occasion, Dr Posh Raj Pandey, Manager of National Program Coordinator of the project and Hira Mani Ghimire, Under-secretary of the Ministry made comments on the report.

Wholesale Price Index rises by 1 pc

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KATHMANDU, June 29 - The National Wholesale Price Index (WPI) of the country, during the first ten months of the current fiscal year has surged by 1 per cent as compared to the same period last year, states a press release issued here today by Nepal Rastra bank (NRB).

WPI, which has been prepared for the first time in Nepal with base year 1999/2000, is the modern methodology to measure the average changes in the prices of specific goods and services of the current year as compared to the base year.

During the period, the WPI index for the agricultural products, which occupies around 50 per cent weightage, declined by 2.16 per cent while such index for domestic production registered a nominal increase of 0.86 per cent. Similarly, the prices of imported goods increased by 4.66 per cent.

Analyzing on point to point basis, prices of goods and services in April/May of 2001 surged by 3.60 per cent as compared to the same period last year while such increment between March/April and April/May, 2001 was 1.41 per cent, states the press release.

While analyzing the price trend commodity wise, of the total 18 agricultural goods included in the index, the prices of 13 commodities surged while prices of rest commodities slumped. The commodities registering price decline were rice, maize, wheat, vegetables and spices.

Similarly, of the total 31 domestically produced goods observed during the period, 15 registered price rise while the prices of 12 commodities declined and 4 remained stable. In the same way, prices of 5 out of 22 imported commodities slumped while rest registered high price rise.

According to the release, arrangements have been made to collect 415 prices of 71 commodities through 20 market centers of the country. Of the prices of total 71 commodities collected during the period, 45 commodities registered price rise. Major goods registering price rise were sugarcane, jute, fruits, milk, sugar, paper, bricks, cement, iron rod, salt, petroleum products, fertilizer, chemicals and coal.

Analyzing the price trend of the first ten months of the current fiscal year, declining price trend was observed for agricultural products and spices. Similarly, among the domestic production, prices of foodstuff declined particularly. The major cause for such decline was the bumper production in the agricultural products both in Nepal and India.

During the period, robust price rise was observed in imported commodities and construction materials. High price rise in the prices of commodities, whose prices are regulated by the government, played crucial role in pushing up the index.

With an aim to upgrade price-monitoring system by introducing internationally practiced methodology, the government had expressed its commitment to introduce WPI in ninth plan.

ICA President felicitated

KATHMANDU, June 29 (PR) - National Cooperative Federation of Nepal Ltd (NCF) felicitated Dr Roberto Rodrigues, President of International Cooperative Alliance (ICA) amid a function here Friday.

Speaking on the occasion, Dr Rodrigues said that cooperativism is fulfilling a wonderful role. In Africa, Eastern Europe, Asia Pacific, Latin America and the rich countries of the EU and North America, the cooperatives are rejuvenating the basic values of equity and rebuilding the social fabric worn away by the abyss between the rich and the poor. He also urged the concerned government agencies to help cooperatives grow as they could really enhance the living standard of the people.

The ICA founded in 1895 has more than 200 member organizations from over 100 countries, representing almost 800 million individuals all over the world, according to a press release issued here by the NCF.

Dr Rodrigues arrived here Thursday on his two-day visit of this Himalayan kingdom. The NCF has expressed the hope that with Dr Rodrigues’ visit, the cooperative movement in Nepal will be revitalized.

BOSTON-IT School inaugurated

KATHMANDU, June 29 (PR)- Minister for Science and Technology, Surendra Prasad Chaudhary Friday inaugurated BOSTON- IT Finishing School here today.

Speaking on the occasion, Minister Chaudhary said that the IT is basically for the welfare of the common people and should be promoted to reinforce the economy of the country.

The school will start teaching variety of courses in Information Technology (IT) ranging from general education, software development, E-commerce, on-line testing and certification to consultancy, said R.K. Srivastava, Director, BOSTON. He also informed the gathering that the school is the largest IT finishing school in Kathmandu

Computer fundamentals like Word 2000, Excel 2000 and other latest packages like JAVA, MUST, ORACLE 8, Internet and A’SENT will be taught to students, accountants, clerks, librarians, teachers, businessmen, executives and a number of IT enthusiasts.

FNCCI expresses gratitude

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KATHMANDU, June 29 - Federation of Nepalese Chambers of Commerce and Industry (FNCCI), the apex body of the business community, has expressed gratitude to His Majesty King Gyanendra Bir Bikram Shah Dev for nominating Dr Roop Jyoti, President of Nepal Trans-Himalaya Traders’ Association and Nepal Yarn Producers Association, and Yankila Sherpa, former president of and advisor to Trekking Agents’ Association in the Upper House of the Parliament.

Similarly, the FNCCI has also expressed thankfulness to the main opposition party Communist Party of Nepal-Unified Marxist Leninist (CPN-UML) for electing Laxmi Das Manandhar, former treasurer and advisor to the FNCCI, in the post of Upper House member, states an FNCCI press release issued here today.

Govt expenditure, revenue rise

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KATHMANDU, June 29- The first ten months of the current fiscal year 2000/01 have been marked with a declaration in monetary aggregates and an acceleration in both the government expenditure and revenue, according to a press communiqué issued by the Nepal Rastra Bank today.

Total government expenditure has accelerated due mainly to a pick up in both the regular as well as development expenditures. During the review period, resources mobilization grew by 21.4 percent as a result of higher growth in revenue receipts and foreign cash grants. However, because of higher growth in the government spendings, budgetary deficit widened by 32.2 percent during the review period.

The rate of inflation, on point to point basis, was recorded at 3.0 percent due mainly to a decline in the prices of food and beverages group. In the external front, growth in exports accompanied by a relatively slower growth in imports has helped to narrow down the trade deficit and subsequently the current account deficit during the review period.

The foreign exchange holdings of the banking system increased substantially due to a surplus in the balance of payment emanating from the growth in official capital inflows in the wake of a decline in the current account deficit.

The resulting foreign exchange reserve was sufficient to cover merchandise imports of eleven months. In the share market, share transaction slowed down compared to the previous month. In the money market, treasury bills rate remained at 4.7 percent whereas the interbank rate stood at 4.4 percent, states the communiqué.

Monetary Front:

During the first ten months of the fiscal year 2000/01, broad money registered a decelerating growth of 9.9 percent (Rs 18439.4 million) to Rs 204560.3 million compared to a growth of 17.6 percent (Rs 26820.2 million) during the same period last year. A steep deceleration in the growth of net foreign assets compared to that of last year was attributed for such a slowdown in the growth of
broad money.

The downward revision in interest rates on deposits, availability of alternative opprtunities for savings and a rapid growth in foreign currency deposits with banks led to the deceleration in the growth of time deposits from 18.8 percent (Rs 19103.9 million) last year to 8.1 percent (Rs 10117.6 million) during the review period. The growth of narrow money also decelerated to 13.6 percent (Rs 8321.8 million) during the review period compared to a growth of 15.1 percent (Rs 7716.3 million) during the same period last year, adds the release.

As a result of a decline in the credit flow to the government enterprises and a slower growth of credit to both the government and the private sector, total domestic credit of the banking system decelerated from 14.5 percent (Rs 19612.1 million) last year to 12.9 percent (Rs 20361.1 million) this year. Consequent to a sharp deceleration in imports accompanied by a sluggish demand for import credit, growth of bank credit to the private sector decelerated to 14.5 percent (Rs 15871.3 million) this year compared to a growth of 15.6 percent (Rs 14124.1 million) last year.

Fiscal Front:

On the fiscal front, total government expenditure registered a growth of 35.5 percent to Rs 50457.8 million during the review period as against a growth of 10.2 percent during the same period last year. Of the total government expenditure, regular expenditure and development expenditure increased by 24.8 percent and 22.2 percent respectively whereas freeze expenditure moved up by 5.3 percent only. Revenue collection, the major resources to finance the budget increased by 21.2 percent to Rs. 37324.7 million during the review period compared to an increase of 11.5 percent during the same period last year.

A significant growth in revenue collection, coupled with an impressive growth in foreign cash grant, have contributed to the growth of resources mobilization by 21.4 percent compared to a growth of 8.3 percent last year, However, such a resources mobilization remaining lower than the government expenditure, a budget deficit of Rs 10385.4 million was incurred during the review period.

To meet the resources gap, the government issued national saving bonds worth Rs 2100.0 million, development bonds worth Rs 1000.0 million, treasury bills worth Rs. 1149.7 million and mobilized foreign cash loan amounting to Rs 3412.2 million. The remaining amount of Rs 2723.5 million was overdrawn from Nepal Rastra Bank, it further says.

Price Index

The National Urban Consumer Price Index, on point to point basis, recorded a rise of 3.0 percent during the review period compared to a growth of 1.9 percent last year. A fall in the prices of food and beverages group helped the rate of inflation to remain at such a low level. Of the overall price index, price index of food and beverages group declined by 0.2 percent during the review period in addition to a decline of 3.1 percent during same period last year. Price index of non-food and services group went up by 6.5 percent during the review period compared to a higher growth of 8.1 percent last year.

Regionwise, price index of Hills moved up by 7.0 percent while price indexes of Kathmandu valley and Terai have respectively increased by 2.6 percent and 1.7 percent only. A decline in the price index of food and beverages group both in Terai and Kathmandu Valley helped the overall price index to remain at such a low level. Because of the depreciation of Nepalese currency and a rise in the prices of petroleum products, the price index of imported goods increased by 7.7 percent during review period as against an increase of 4.6 percent last year. As a consequence of the upward revision in the price of petroleum products, the price index of government controlled goods increased to 10.3 percent during the review year compared to 8.4 percent last year.

Balance of Payment

On the external front, exports registered a decelerated growth of 18.6 percent to Rs 47878.7 million during the review period compared to a growth of 37.7 percent during the same period last year. Exports to India and to third countries have respectively decelerated to 33.4 percent and 8.1 percent. Export of ready-made garments, woolen carpets and jewellery to third countries declined whereas that of pashmina, tanned skin and pulses increased significantly. During the review period, Rs 6.41 billion worth of pashmina was exported.

During the review period, the growth rate of imports declined to 6.9 percent amounting to Rs 94893.1 million as against a growth of 26.3 percent during the same period last year. During the review period, import of vehicles and parts, textiles, thread, chemicals, agricultural tools and parts from India and raw wool, petroleum products, betelnut, plastic granules, copper wire and sheet, thread, textiles, computer parts, aeroplanes parts, medicine, camera and palm oil from third countries increased compared to that of last year, mentions the communiqué.

During the review period, the growth rate of exports was higher than that of imports. Consequently, trade deficit, during the review period, declined by 2.8 percent and amounted to Rs 47014.4 million compared to the growth of 18.1 percent in the previous year. The export-import ratio, which was 45.5 percent in the previous year, improved to 50.5 percent during the review period.

Based on the available balance of payments statistics for the first eight months of the current fiscal year, the balance of payments (BOP) remained favourable by Rs 8872.1 million. During this period, decline in net services income has resulted in the current account deficit of Rs 3219.4 million in spite of a decrease in trade balance compared to the same period last year.

However, a substantial inflow of miscellaneous capital items helped the balance of payments to remain positive. Foreign exchange holdings of the banking system increased by 10.9 percent to Rs 102685.2 million as at mid-May 2001. Of the total reserve, convertible currency accounted for 78.2 percent.

In the share market, market capitalization of the companies listed in the Stock Exchange decreased to Rs 46.7 billion at mid-May 2001 from Rs 48.4 billion in the previous month. Likewise, NEPSE index decreased from 369.1 in the previous month to 355.6 at mid-May 2001.