Monitor stock market

Stock Index is a barometer of investors’ confidence. The recent series of tumbles in share prices, which has vertically pulled the Nepse Index down, is a matter of utmost concern to investors. The investors, for the first time, reacted strongly at the stock exchange when the Index plummeted by over 22 points. The other day, Nepse Index, which had crossed 545 points in the third week of November, fell to as low as 375 points. Given the erosion of investors’ hope in such a short time owing to tumbling share prices, ending the past few months’ rollercoaster ride, the demand of panicked investors for explanation from concerned officials for the recent slides is well justified.

Consequently, investors and officials are at loggerheads over the cause of stock market slack, blaming each other for the volatility of stock prices. In addition to the absence of institutional investors and lack of research and analysis to bring stock stability in the shallow Nepalese stock market, officials have accused investors of acting on whim and causing stock prices to fluctuate widely. Investors, on their part, retorted by charging officials and big market players with price manipulation, which officials deny. However, despite arguments and counter arguments, what comes as a surprise is the timing of the latest stock market downturn. The market depression comes at a time when commercial banks are set to increase their capital base to 500 million rupees, for which it would need to make the right issue, and about which investors were optimistic initially. The Nepal Rastra Bank had issued a directive to commercial banks last year asking them to increase their capital base to Rs 500 million rupees within the current financial year. And now, with hardly a few months remaining for banks to make their announcements, the latest apprehension and turmoil at the stock market builds grounds to believe that a few big investors are steering the stock market, and of course, with dubious intentions. But sadly, despite the suspicion of foul play, the Securities Board, a regulatory body that oversees the stock market, has so far remained silent. The Board has not attached much significance to the stock market turmoil, taking the recent plunge in the index casually, claiming that the price swings are due to the demand and supply game. What it needs to do is to investigate whether the price oscillations were real or artificial. And if the latter proves to be the case, due punishments must be meted out to those indulging in the unholy act.

And it is of utmost importance that such unprecedented swings in the stock market do not take place. Not only does it reflect a shaky money market but will also erode the confidence of investors, ultimately affecting capital flows. The effort to improve the domestic stock market should be from all quarters. Firstly, the investors should not act on their whims and invest blindly like a gambler. Secondly, the stock exchange, which has been criticised a number of times in the past, must maintain transparency. And thirdly, the Securities Board must regularly monitor the market and must immediately investigate any unusual price fluctuations. The thrust should be to strengthen the regulatory authority and to ensure that a few big stock dealers, with intentions of influencing stock prices, do not get indulged in unethical trading. If timely steps are not taken to ensure that share prices stabilise at their real value, the possibility of yet another market crash like that of 1993 cannot be ruled out.

Deadlocked between extremes

By Ram Bahadur KC

The 19th Session of the Parliament, that began from Feb 8, 2001, has been stalled, time and often, rocked by trading charges and countercharges, muscle flexing and fisticuffs, virtually turning the respected apex-forum into a fighting arena. The Winter Session, also known as the bill session, would have no time to waste if it had fully engaged in policy deliberation, passing bills and a large number of motions and resolutions, relating to the urgent issues of the country. The first Winter Session of the Parliament in 1992 had passed 20 bills within the period of 23 days. This time around more than two weeks, have been wasted, not to mention, the time, money and other resources.

The opposition parties have risen to revolt, demanding the resignation of Prime Minister Girija Prasad Koirala for his alleged involvement in the Lauda Air scandal, and have not shown any flexibility for negotiation. The ruling party, with the majority command in the House, is not ready to succumb to such pressure for the unproven charge. Rather, they would be ready to go in for the mid-term poll (as per the news report) if the opposition failed to come to negotiation. The other extreme cannot be overruled. The speaker and the chairman of the two Houses, getting weary of their sincere and tireless efforts to make a compromise between the ruling and the opposition, may one day opt for the prorogation of the Winter Session as their last resort. This step, though incompatible and contrary to the general parliamentary practice, could be an extreme measure. It is very unlikely but not an impossible proposition. If the third extreme materialises, the Parliament would be locked, the exit would be very hard and costly, though not impossible.

Politics of reasoning is failing. The opposition cannot wait for the verdict of the CIAA about the Lauda scandal, while the ruling party takes it as a grand conspiracy to purely oust the Prime Minister. Both have not been able to work with the sense of ethics and morality. The Prime Minister may have gracefully resigned for impartial investigation and as a proof of non-involvement in the so-called scandal. The opposition could test the CIAA for its integrity and independent working, because it is a constitutional body and an all-party creation. When both parties lose patience, put aside dialogue and reasoning and judge things only with suspicion, no system, no matter how sound and ideal works. Logic and reasoning fail, myth and hypocrisy prevail giving rise to a paradoxical and contradictory situation.

In fact, democracy is a polity that works better on the basis of discourse, dialogue and reasoning. It is not a system by force, might and violence. Transparency is another essential tool that helps dialogue, leading to the politics of reasoning. Democracy has its own ethics, culture and value that should be observed by politicians and leaders. The leaders and politicians, bereft of required integrity and democratic values cannot lead people. The frequent changes of government (ten times), premature elections, the nature of governance by force, domination and whip, and the opposition by bandhs, hartals, gheraoes, etc have already incurred heavy loss both in terms of time and resources. Political stability has always been an illusion, development activities have been hampered and people’s economic status has not improved. The intellectuals and the people in general have been disenchanted with politics. The ruling party and its government should have tolerance and patience to listen to and be fair, analytical and rational to the constructive criticisms and logical demands of the opposition. The advantage of majority government should in no way be displayed in a way the Nepali Congress has done, rather it should be used for understanding and compromise. The responsibility of the opposition is still very crucial. They should honour people’s mandate of being responsible opposition, and should be convincing and constructive, present practical and people-oriented policies and programmes. What is lacking today is mutual understanding and confidence. No system of the government functions and succeeds if the attitude of the government is always suspicious over the opposition’s moves.

With the House stalled for more than two weeks, the role of the speaker and the chairman seems to be very crucial and critical. It is crucial because since the ruling and the opposition have taken inflexible and unshakable stand, all are looking to them to resolve the deadlock. Their role is crucial because they can intervene, make compromise and conduct the House business. It is critical because of the rigid and uncompromising stand of the two sides. Moreover, the speaker, as a leader of the House (hence also a guardian) and as the chief spokesman of the parliament, can be a good coordinator, but not an accomplice to any party. It is also the Parliament’s norm that the speaker should also be neutral but not indifferent to such deadlock. After seeking right counselling, he can even exercise a little coercion between the ruling and the opposition, in the meantime not staking his respectable position of non-partisan and neutrality.

Holiphobia

By Pragya Karki

I was on my way to home, tired and exhausted from a somewhat hectic college day, when all of a sudden, a devil in disguise Lola (water balloon) landed by my side. I looked around but there was no one to confirm my suspicion. Then I walked more briskly because I knew I might not be lucky enough to miss another shot which would come like a stray bullet. However, I felt a small measure of triumph as I missed it. After entering inside my house I gazed at the calendar hanging on the wall, which told me that there were still many more days left for Holi.

Holi is a colourful festival that we celebrate as a day to mark the victory of good over evil. According to our legend, many years ago, on the Falgun Purnima, devil Holika who possessed a supernatural power to resist fire, was burnt down to ashes after she had misused her power to kill an innocent child. She sat inside a blazing fire with the child on her laps, hoping that the damn fire could do no harm to her. But to her dismay, she died and the child survived by the grace of god. Well ! Such a classic story reminds us about the downfall of the evil and bad deeds but is now ignored by a few wrong people. They spoil the charm of this florid festival and, as a result, it turns out to be the abominable festival. Whenever Holi approaches, we have to twist and turn our eyes to every possible angles and walk cautiously, or else the filthy Lola splashes on our body. Actually, I am a bit perplexed from where these people get water to fill the balloons? As we all know people of Kathmandu do not get much water even to quench their thirst, let alone playing with it. The water, after all, has become the rarest liquid for us.

The tap installed in our house is just a show piece. It is a proof that once upon a time, water used to flow out vigorously and gracefully.

It will be a scene to witness (how pathetic). In such a deadly situation when Kathmandu is almost dry as a desert we see filled-up balloons coming from here and there. One can obviously imagine what kind of water is filled inside the balloons. Last year, a friend of mine was enjoying her ride on her moped with her sister. She and sister saw a bunch of guys and easily sensed that she and her sister had to withstand Lolas as it was the Holi break and to them, the crowd seemed like Lola maniac. Yes, her intuition was right, no sooner had she crossed them than she found herself struggling against the thundering Lolas. My poor friend lost her balance, she along with her sister met an accident. This is just a fraction of numerous such accidents and incidents which occur prior to Holi.

I simply can’t figure out what kind of joy they (Lola throwers) get by throwing water balloons at the passersby, to be more precise at girls? The worst part is, when you see the road empty. No one is at the roof or windows of the house and you consider yourself fortunate but then out of a blue a Lola comes hurting and hits you hard. You are ready to explode, but to whom? Because you see no sign of human beings. They throw Lolas and conceal themselves in their hideway. Frankly speaking, these people, who love throwing Lolas, are the sick ones. They are idle fellows with sick mentality. I would rather call this Holi festival a festival of hooliganism, when girls suffer from Lola phobia.

Seeds in improving agricultural production

By Dr Ajambar Rai

In the seventies, developing countries like India and Pakistan experienced a phenomenal increase in agricultural production. It was termed "The Green Revolution". This was brought about mainly by the massive use of newly developed high yielding seeds of cereals primarily wheat and rice. Other factors for intensive cultivation, like irrigation and use of chemical fertilizers, were required side by side. However, it was the contribution of seed that was determinant. Needless to say improved seed is considered as the cheapest and most important input for increasing production and productivity of agricultural commodity. In Nepal, to effect significant agricultural production with the transformation of our agricultural system from it subsistence level to the surplus one, there cannot be no better option than to conduct programmes for supplying improved seeds for their supply in plenty and adequately.

Present situation: Nepal started improved seed supply in the formal sector in the seventies. Initially, such seeds were imported from India and distributed among the farmers. Seed production and processing based on modern technology started with the establishment of the country’s first Seed Processing Plant at Hetauda in 1973 with the cooperation of Food and Agriculture Organization of the United Nations (FAO). Since then, there has been significant bilateral contributions for upgrading the quality seed available in the country.

From consumption point of view, cereal crops are the most important staple food crops of Nepal. Based on the area under cultivation, the latest available data show that rice occupies just over one and half million hectares. Of the total, 75 percent of area is concentrated in the Terai region, nonetheless it is also an important crop grown in the valleys and along the terraces in the hills. Maize is the most important crop in the hills; 80 percent of just over three-quarter of million hectare of total area is in this geophysical region. Wheat is grown both in Terai and hills with almost equal areas under cultivation in both of these agro-ecological zones. Its total area of cultivation is just over three-fifth of a million hectare.

About three-fourth of the total area in rice is under improved varieties, whereas the rest is under indigenous local varieties. In case of maize, the local varieties occupy as much area under the improved ones. Only in case of wheat, modern varieties occupy almost cent percent areas. Additionally, it is worthwhile to note that in a developing country like Nepal, where hybrid seed use is limited, for open-pollinated cereal seeds, a replacement cycle of four years by farmers could be considered. That means the farmers could use their own produced seeds for up to three years, once they have procured high quality seeds of an improved variety from a reliable source. With this replacement cycle in effect, theoretically, the annual improved seed requirement for rice, maize and wheat would be about 14,000 ton, 2,000 ton and 19,000 ton, respectively. So, at present the public sector supply in terms of improved seed requirement comes only at 2-4 percent in rice, 5-10 percent in maize and about 15 percent in wheat. With the huge potential seed demand unmet at the present there is urgent need for a body to fill this gap.

Task ahead: We must aim to make available high quality seeds to farmers on time as much at affordable cost as possible. For this, formulation of time-bound seed programme is necessary. At the government level, a new body with the responsibility of seed supply has been proposed. This new entity should take lead in facilitating transformation of seed supply from mere public sector service to entrepreneurship and promote its growth into a viable seed industry. It should be able to increase transaction of improved seed so as to cover significant percentage of the actual modern seed needs. It should have improved marketing channel and possess flexibility in price fixation as the supply and demand determines. The past experience has shown that dealers are important link between the producers and users of seeds and with provision of incentives, dealership system should be further strengthened. We always expect such an organization to be provided more autonomy so long as it works as expected. It is important that seed regulation and directives be implemented strictly.

Furthermore, more coordination among the actors involved in national seed supply system has been wanting. A major hitch in increasing the certified seed production has been due to lack of popular varieties preferred by farmers for further multiplication. There is a need to strike balance between seeds of what varieties are in demand and what National Agricultural Research Council (NARC) should produce.

The task ahead is to ensure the provision of proper environment for the growth and development of seed sector as a workable system suited and needed for the agriculture. Up to now, the seed supply mechanism in the public sector, Agriculture Inputs Corporation (AIC) has been tied with the transaction of the chemical fertilizers. Naturally, it has been observed that proper attention required for technical aspects of seeds has not been extended. In clear terms, it is high time for the formation and functioning of a separate body with the responsibility of production and supply of seeds on the national level. In fact the committee formed by the government to recommend for the establishment of the Nepal Seed Company (NSC) has already submitted its report. It is anticipated that without further delay, the proposed NSC should take birth and its management team buckles down for work. Significant involvement of the private sector for the improvement of management and productivity should be welcome.

We have to make new plans and programmes in the seed sector that help not only farmers but also alleviate poverty. The farmers have faith in the role of improved seeds that raises agricultural production and productivity will ultimately help improve their own quality of life. This provides us much opportunity to work further in this particular field. The long-term Agriculture Perspective Plan has shown some flaws by not paying adequate attention to develop hybrid seeds, however that should not deter us from contributing in this sector.

(The author is senior agriculture officer)