Garment exports tumble for first time in years

By Bhaskar Sharma

KATHMANDU, May 10 - Plagued by a multiplicity of causes, the garment industry, which had been achieving double digit export growth in the past, has for the first time registered a negative growth rate.

Statistics released by the Garment Association - Nepal (GAN) today show that garment export to the United States (US), which absorbs 85 per cent of the total Nepali garment exports, slumped more than 5 per cent in the first four months of 2001 as compared to the corresponding period last year. The figures also show that in the month of April alone, exports tumbled by 33 per cent in comparison to the same corresponding period last year.

The export figures to the US for the first four months of 2000 and 2001 respectively stands at US $ 74.6 million and US $ 70.8 million respectively. The total exports to the American market in 1998, 1999 and 2000 stood at US $ 106, 126 and 178 million respectively.

Though the aggregate slump may not appear big, it is significant since the garment exports in the past grew annually by almost 30 per cent. "For a sector that has enjoyed good growth throughout, the present decline is depressing. A drop by 5 per cent in four months is worrisome," says Uday Raj Pandey, General Secretary of GAN.

Entrepreneurs are not just worried over the current slump. Even more worrisome is the expected performance of the industry in the next few months. Says Pandey, "The industry’s performance in the next few months can be easily determined by the number and volume of orders that we get now. And since the orders have literally slump presently, the future seems bleak."

With the latest signs of strain in the garments sector that has been the mainstay of the Nepali foreign exchange earner, it is not just the entrepreneurs who are worried. Says Ram Yadav, a worker in a local garment factory, "There are a lot of workers in this industry. If this sector faces problem, then what will we do bhai(brother)."

The cause of the latest export dwindle, entrepreneurs say, is many, including the recent series of violence and bandhs, and the slowdown of the American economy. However, the major cause is the shift in the preference of American importers to import garments from the Sub-Saharan African countries over Nepali garments.

The US government last November had revoked the quota system and tariff barriers for the Sub-Saharan African countries completely opening up its markets. In addition, it had also widened the market access for most Caribbean garment manufacturers.

"Most of the orders that come to Nepal have now been pulled by the African countries to which the US government recently opened its markets," says Kiran Sakha, a garment entrepreneur.

Though the businessmen have been pressuring the government to ask the US for granting the same facility, nothing has so far been done. Without duty free access to the American markets, Nepal’s garments would be at a disadvantaged position. Presently US importers pay upto 21 per cent in duties while importing garments from Nepal. Furthermore, the cost factor of Nepali garments, primarily due to its landlockedness is also proving detrimental.

The cost of production of Nepali garments is 15 to 20 per cent higher than other South Asian and African countries. Since the government is not providing any facility to enhance the industry’s competitiveness in the international arena, it would be hard to achieve a sustained growth in the long run, says Jay Prakash, another entrepreneur and Secretary of GAN.

Govt, radical students meet proves futile

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KATHMANDU, May 10 - The second day’s meeting between the Ministry of Education and Sports and All Nepal National Free Students Union - Revolutionary (ANNFSU-R)ended inconclusively Thursday.

The meeting was held to find a solution to the demands put forth by the radical students who are aligned with the Maoist rebels. However, critics say, the meeting has granted some sort of legitimacy to the rebel students who on Tuesday vandalized two private schools and nearly set one of the school principals on fire. They also burnt a vehicle.

Speaking to the reporters immediately after the meeting, Ram Sarvar Dubey, Under Secretary at the Ministry said, "This is a national concern, which requires the involvement of all students organisations, guardians and PABSON in the dialogue." PABSON is a grouping of private schools.

The Ministry informed after the meeting that it will call another joint meeting with the ANNFSU (R) and PABSON on Saturday. However, the government sources said it would go for dialogue with various parties before reaching an agreement with the radical students’ group.

The ANNFSU (R), meanwhile, is angry at having to deal with mid-level government officials rather than top officials.

During today’s meeting, the government had also invited officials of the Nepal National Teachers Association (NNTA).

Ramakanta Sapkota, NNTA General Secretary, said the meeting was fruitless.

"The government wanted to know what NNTA has to say on ANNFSU (R)’s 15-point demand. This is what I deduced from the meeting today...nothing more," he said.

Asked if the students’ demand were just and reasonable, Dubey said most of them are genuine but their demands like uniform status for all the schools and the government increasing investment in public schools cannot be accomplished in a day.

Meanwhile, around 100 members of All Nepal National Free Students’ Union, ANNFSU, a student wing of CPN-ML sat for a 24-hour hunger strike at 12 noon at the gate of Ministry of Education today demanding the end to commercialisation of education and increasing public investment in the public schools.

Elite’s Co-Ed closes shop

By Rajeeb Tamrakar

KATHMANDU, May 10 - Elite’s Co-Ed, one of the schools vandalized Tuesday by radical students aligned with the Maoist rebels, has decided to evacuate all students and staff from the school at Lamatar because of the lack of security.

Principal of the school Nina Morada, who was manhandled by the ANNFSU (Revolutionary) students on Tuesday, told The Kathmandu Post that she was closing down the school until the security situation improves.

"I have to evacuate all the staff because of the fact that I have been getting threatening calls," Morada said Thursday. "Although I have requested the government for the security of my life and property, it seems like nobody is showing any concern over it." She added that she had been receiving "dozens of calls in my cell phone everyday. It’s really difficult for me to stand the verbal abuses I have been getting these days."

All staff serving at the Lamatar premises of the school have been summoned at the Naxal branch of the school for security reasons.

The acts of vandalism by the ANNFSU (R) students have struck deep fears into the hearts of other school officials too. Most of them are confused whether to keep operating or close down from May 14, as demanded by the radical student group. The ANNFSU (R) has posted a list of demands, the chief of which is a drastic reduction of "expensive" school fees, abolishing the teaching of Sanskrit and stopping the singing of the national anthem.

Most of the schools say they want the government to talk with the revolutionary students and Private and Boarding School’s Organisation, Nepal (PABSON) to find a solution.

Noble Academy called for a meeting on Saturday with the guardians of their students to discuss the matter with them. Chairman of the school Surendra Shrestha said, "Since the government is not showing much concern towards resolving the matter, we are compelled to discuss it with the parents so that we can come to some conclusion.

"We are looking for the development of the event and we will be closing our school if other schools decide to do the same," says a school staff of Mary Land School.

As for other student unions, they are critical of the tactic employed by the radical students. Subodh Raj Acharya, vice president of Tri-Chandra Campus Free Students Union says, " As a representative of a student union, I do not support the steps taken by the ANNFSU (R). "

Nepal, India deny TOI report

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KATHMANDU, May 10 - Nepali authorities and the Indian Embassy here dismissed as incorrect reports that Indian policemen have left for Nepal to track down an alleged ISI agent who masterminded the recent foiled attempt to assassinate the editors of Tehelka.com, and Indian investigative news internet site.

Secretary at the Ministry of Home Affairs, Sri Kanta Regmi, told The Kathmandu Post on Thursday that "the reports are purported and misleading". He, however, said that the New Delhi Police had requested Nepal Police to hold inquiries on whether or not the Pakistani national named "Jain" was in the Nepali territory. He did not elaborate further.

When asked to comment, Indian Embassy spokesman Manoj Bharati said that the embassy had "no information about the matter".

However, a news report posted Wednesday on the website of The Times of India (www.timesofindia.com) reported that "a high profile Delhi police team left for Nepal Tuesday evening to try and track the ISI agent codenamed ‘Jain’ and the remaining members of the Bhupinder Tyagi gang, who are believed to be holed up near the Indo-Nepal border."

The Times of India website report alleged that Jain was an ISI agent and he had set up several camps along Indo-Nepal border. The border town of Birgunj, the report added, was the "logistical headquarters" for the foiled murder attempt.

SEBO orders Hotel Radisson enlistment

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KATHMANDU, May 10 - Securities Board (SEBO), the regulatory body overseeing the stock market, has asked the Nepal Stock Exchange (Nepse) to list the shares of Oriental Hotels Pvt Ltd. (Hotel Radisson Kathmandu)

The Board directed the Nepse in a letter sent to the stock market Wednesday. The Board in its letter has said that the Hotel must make its audited accounts for the last fiscal year public after it is listed. It has clearly mentioned that if the Hotel fails to comply with this condition, its shares would not be allowed to be traded.

The Nepse initially had refused to list the Hotel’s shares alleging it of giving false information to potential investors during share issue last August. While the Hotel had shown positive profits projection during the share issue, it showed different figures to the Nepse while applying for share listing. The two figures differed by over 37 per cent, following which the Nepse stopped the listing process.

The Hotel last July had floated shares worth Rs 125 million, which was later increased to 150 million.

The convoluted road to Lauda Air

By Damakant Jayshi

KATHMANDU, May 10 – In mid-April last year, the government of Prime Minister G P Koirala made a fateful decision: it appointed Hari Bhakta Shrestha as the new executive chairman of RNAC, the national flag-carrier. Nearly a year later, that decision would come back to hound the government, specifically the Prime Minister.

In concluding a jet leasing agreement with Lauda Air, Shrestha set the ball rolling for one of the most divisive issues to dog Nepali politics, not to speak of the questions of morality it would raise.

In the end, Shrestha and his colleague in the RNAC board, Tirtha Lal Shrestha, were both imprisoned by the constitutional anti-corruption body CIAA for their role in the deal. The CIAA also recently ordered Koirala to furnish replies about his role in the jet leasing deal, kicking up a furore that would shake the Koirala government to its core.

Today, Koirala finds himself surrounded from all sides. His party rivals are calling for the Prime Minister’s ouster. The opposition out on the streets demanding his head. He is at loggerheads with the constitutionally empowered CIAA. Above all, the chance to establish a decent legacy he so wanted appears to have crumbled in the wake of what has come to be known as the Lauda Air scandal.

But the Prime Minister has no one to blame but himself. In the five-month gestation period of the Lauda Air deal in the summer of 2000, there were many instances when he could have ordered his trusted lieutenant, then Civil Aviation Minister T D Chataut, to scuttle the deal. But the red flags that were raised along the way were ignored as the RNAC-government-business nexus rumbled on, egged on by a strong desire to lease a wide-body jet no matter what the cost.

The question in everyone’s mind is: how much money passed under the table to facilitate the deal? Or even, was such a clandestine transaction ever made?

The answer is not easy to come by. It is difficult to prove corruption in such transactions. There are no paper trails, most of the work is done on the basis of trust among the involved parties. But what has come out is that the local agent who represented Lauda Air and who pushed for the deal, ICTC, got five per cent of the total amount in commissions, about Rs 65 million. How much of that money went to grease the palms, if at all, of officials and politicians is a matter of conjecture.

"It is impossible to win a contract such as this purely on merit," says a businessman who has vied for such deals in the past. "You will have to grease the palms along the way, and often all the way."

At the time, Shrestha’s appointment at RNAC, though routine, raised quite a few eyebrows. He was already under investigation by the CIAA for a navigation equipment deal he concluded while chief of the Civil Aviation Authority of Nepal, his last posting before being appointed the RNAC boss.

Soon after his appointment, Shrestha got to work on leasing a wide-body jet. Ever since 1994, when the airline sold its two B-727s for scrap, it was on the lookout for a wide-body jet to lease. In the early years, an Airbus A-310 was leased for two years, but when that lease expired in 1996, the airline failed to lease another wide-body jet. It however kept on the search while at the same time leasing narrow-body jets as stop gap measure over the years.

Once Shrestha came in, things began to move fast. "It almost appeared that he had made up his mind to lease the jet no matter what," says a top RNAC official on condition of anonymity. Within months of assuming the top job at RNAC, Shrestha came close to concluding just such an agreement twice, only to see the deal fall through both the times.

The first one was with a supplier called Babcock and Brown. This company was represented here by the same local agent who would eventually bag the Lauda Air jet lease deal later on. But this deal fell apart after B&B failed to supply the aircraft. Shrestha then nearly concluded the deal with Ansett of Australia but this too fell apart under dramatic circumstances.

At about the same time, RNAC concluded the lucrative aviation fuel supplying contract with parties which were again represented by ICTC, indicating the strong business ties Shrestha enjoyed with this particular group. Indeed, a careful study of all the business deals conducted by Shrestha while at the Civil Aviation Authority and later at RNAC shows his clear affinity for this particular business house.

Government officials could well have asked then, why this preference for one business party over others? But the questions were never asked. If they were, things could have been very different.

Nevertheless, after his two earlier attempts to lease a jet through the tender process fell through, RNAC boss Shrestha began direct negotiations with various parties, chief of them Ansett. But ICTC strongly protested for being left out of the negotiations. A letter from ICTC dated 19th September, 2000, asking the RNAC management to call them for negotiations for the jet deal was swiftly acted upon. Just eight days after the letter was written, RNAC and Lauda Air signed the leasing agreement.

Even as the Lauda Air deal was being negotiated, media reports had already questioned why the national airline was concluding a lease without calling tenders, as mandated by a directive of the CIAA. Also, why was the age bar of the aircraft being raised from initial five years to 10 years, and then that too surpassed to accommodate the Lauda Air jet, which was more than 12 years old? No answers were forthcoming from RNAC.

Prime Minister Koirala and his minister Chataut never asked such questions. Instead, by Shrestha’s own account (which he gave to The Kathmandu Post from his cell at Hanumandhoka police station) Minister Chataut backed him all the way.

In any case, both Koirala and Chataut failed to stop RNAC from circumventing the CIAA directive as well by providing Cabinet approval for the deal. If there was one last chance to stop the deal, it was at this point, but even that opportunity was lost.

This "unusual haste," as remarked by the parliament’s Public Accounts Committee (PAC) Chairman Subhash Nemwang during one of the hearings, of the national carrier raised the eyebrows of the constitutional bodies - the Public Accounts Committee and the CIAA. The PAC, for instance, wanted to know why the RNAC sent 1,005,000 US dollars each as bank guarantee and as advance monthly rent. These are not mentioned in the RNAC-Lauda Air agreement.

In retrospect, this move of RNAC in doing something that was not specifically mentioned in the agreement was, in the days to come, to become a big issue, almost of unmanageable proportions. The PAC members were not convinced about the expediency for sending the Letter of Credit (LC) amounting to 2,010,000 US dollars to Lauda Air, however hard the RNAC management tried.

RNAC sought the clearance of foreign exchange for the amount from the Cabinet through the Ministry of Culture, Tourism and Civil Aviation (MoCTCA). Tirthalal Shrestha, a board member of the airline, admitted, just days before his detention, that they sought the clearance from the Cabinet "because the CIAA had instructed to lease a plane only through tender process".

Some ministers and party leaders are now questioning the RNAC Board’s move to take the matter to the Cabinet. They are questioning the motive. Could it be that the Shrestha duo, along with the then minister Chataut wanted to pass on the buck to the Cabinet?

A three-member PAC sub-committee, in the meantime, labelled the deal "full of irregularities, corrupt and against the interest of the Corporation." But it too could not stop the deal from being carried out, despite several directives to RNAC and the government.

By this time, the matter was being probed by the CIAA. It first recommended the suspension of Hari Bhakta Shrestha. Then it summoned the then minister Chataut, who resigned after his first hearing to facilitate unhindered investigation. The opposition asked the PM to follow suit but Koirala refused. This led to the unprecedented parliamentary disruption without a single second of legislative business. The heat, on the Prime Minister is still on.

Academicians concerned over dalit oppression

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KATHMANDU, May 10 - Academicians today on the concluding day of the 3-day workshop expressed concern over the dalits being discriminated and oppressed in Nepali society.

Addressing the workshop on liberation of the dalits in Nepali society, Dr. Vidyanath Koirala who has worked extensively on dalit community said that oppression by the people belonging to so-called upper castes to the people belonging to so-called lower caste should be taken as a social problem." oppression of dalits in Nepali society is really against the Constitution framed in 1990, which clearly says that no so-called lower class people should be oppressed," said Koirala.

Koirala also said that it is high time to formulate the new education policy incorporating the social change required in present Nepali society. "There is a need of social change which will aid in dispelling away the orthodox belief of the castes," said Koirala.

Noted academician and editor of Himal magazine, Kanak Mani Dixit said that the social oppression to the dalits by the so-called higher caste people should be exposed by the media."The media can play an effective role in uplifting the dalits," said Dixit.

Likewise, a noted human rights activists Sashi Rijal accused the powerholders for patronizing the oppressors." Until and unless the so-called upper caste people who oppress the so-called lower caste people are penalized, this trend is not going to cease," said Rijal.

The dalit community has been claiming that eventhough the constitution prohibits discrimination against them, oppression is prevalent in the society. Dalits have been demanding for equal treatment in every significant sector of the country. They have also been accusing the government of ignoring their demands.

Speaking on the concluding day, chairman of Dalit Sewa Sangh highlighted the misery that dalit women have to face in day to day life.

Nepal to host meet on mountain women

KATHMANDU, May 10 (PR)-Nepal will host a "Global Meeting of Mountain Women" in 2002, bringing more than 300 delegates from around the world.

The meeting, under the aegis of the International Center for Integrated Mountain Development (ICIMOD) and Mountain Forum (MF), will focus on the strength and commitment of mountain women in making a positive contribution to local and national economics.

According a press release issued after the completion of three-day long meeting of women from different part of the globe, participant from about 70 countries representing the world’s major mountain ranges, especially the marginalised communities are expected to attend the meeting.

The three-day long meeting of twenty women from Africa, Asia, Europe and North America, held in Lalitpur from May 8-10, has finalized a plan of action for a mountain women’s agenda, adds the release.

The proposed meeting will cover the entire gamut of issues related to mountain women.

"Discussion, activities and events of the meeting will highlight and showcase practical aspects of mountain life including their songs, stories, dances, foods, crafts, textiles, traditional knowledge and efforts to make constructive changes." Adds the release.

Likewise the meeting will also address the issues of concern such as legal and political rights, health and well being, conservation of traditional wisdom and natural resources, women’s labor and opportunities for enterprenuership.

The proposed meeting of mountain women including NGOs, mountain entrepreneurs, researchers, parliamentarians, senior government officials, funding agencies and media representative is a part of UN declared International Year of Mountains 2002.

Mountains were placed on the international agenda at the 1992 United Nations conference on Environment and Development (UNCTAD) in Rio de Janeiro, and the 1995 UN World conference on women in Beijing called for special attention to mountain women.

Stronger ties with China stressed

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KATHMANDU, May 10 - Foreign policy experts and a prominent businessman today called for strong economic ties and partnership with China even as they suggested the government to find ways to promote Nepal as holiday destination for Chinese tourists, ahead of the landmark visit of Chinese Prime Minister Zhu Rongji.

At an interaction program organized here Thursday by the Reporters’ Club of Nepal, they also spelled out the need to go beyond "age-old ties dating back to the times of Bhrikuti and Araniko, and envision a new foreign policy regarding the Sino-Nepal relations in the changing context.

The new policy with special emphasis to economic diplomacy, they stressed, should take into account such factors like globalization, information technology, and the massive infrastructure development projects that China is undertaking in the Tibetan autonomous region. China is constructing a broad gauge railway linking the Tibetan capital of Lhasa with Beijing. The multi-billion dollar project is scheduled to complete in 2010.

Upper House Parliamentarian and foreign policy expert Ramesh Nath Pandey said Nepal should be able to put in place a 21-century-friendly foreign policy with China, and pursue dialogues and other necessary measures to exploit economic benefits or spillover from the megaproject.

But Nepal has not yet taken high-level initiatives with China to increase Chinese investment in Nepal’s such lucrative sectors as hydropower, tourism and infrastructure, if former SAARC (South Asian Association for Regional Cooperation) General Secretary Yadav Kant Silwal’s statement is any thing to go by.

He pointed at the need of such high-level initiatives for Nepal’s economic development, while calling for separate initiatives between Nepal and China and Nepal and India to curb such emerging challenges as cross-border terrorism, drug trafficking and so on.

"China wants to bring prosperity in Tibet through this railway project, and Nepal should be able to tap that for her," said Govinda Bhatta, and intellectual and China expert. "So it is time for us to formulate programs and policies to promote business and trade partnerships with China. This is something which is very important for Nepal’s economic development."

Former Nepalese Ambassador to China Yubaraj Singh Pradhan said that Chinese give more emphasis to economic trade and partnership and areas of joint venture, and suggested the government to look into those areas. He added that there is also a vast potential for the growth of Chinese tourists in Nepal.

Chairman of Federation of Nepalese Chamber of Commerce and Industry, Pradip Kumar Shrestha called for strong bilateral initiatives to channel China’s agriculture and other technologies, and investment into Nepal. For the promotion of Chinese tourism, he said, besides taking other measures, the existing flights between Kathmandu and Lhasa and Sanghai should be made "more regular".

The Chinese Prime Minister is arriving here on Monday from Pakistan, on the second leg of his 11-day visit of South Asian nations and Thailand. Besides Pakistan, he is visiting Sri Lanka and Maldives in the region. Rongji’s three-day official visit to the Himalayan Kingdom follows Chinese President Jiang Zemin’s landmark visit in 1996.

The issues high on agenda for Rongji’s visit include, opening of the second raodlink between Nepal and China—Syabrubensi-Kerung roadlink project, establishment of a hospital for civil servants and a polytechnic school and agreements on trade intercourse between the two countries and other related matters.