MPI growth rate slows

By Prem Khanal

KATHMANDU, Nov 29 - As an indication of slowing industrial activities of the country, the overall Manufacturing Production Index (MPI) in the first quarter of the current fiscal year registered a sluggish growth of 2.29 per cent as compared to 5.29 per cent recorded during the same period last year.

Manufacture of food products, which holds the largest weightage in the index, declined by 0.02 percent where as such growth in the last year was 7.54 per cent, according to the quarterly production statistics compiled by the Central Bureau of Statistics (CBS).

Of food products, like last year, manufacture of dairy products, particularly processed milk, dipped by around 7 per cent followed by manufacture of beverages mainly due to the burgeoning anti-liquor campaigns. Despite double-digit growth in the production of beer and soft drink, the whopping tumble of over 50 per cent in the production of liquor rectified dragged down beverage production index.

Similarly, the production of rice, wheat flour, and biscuits also slipped during the period. The manufacture of biscuits registered a huge decline of over 26 per cent while the production of rice and wheat flour slid down by almost 4 per cent. The huge flow of cheap Indian rice into the country is the main cause of low production of domestic cereals.

However, the production of vegetable ghee, oil, and fats showed an encouraging surge of over 27 per cent whereas such growth last year was 7.54 per cent. In the like manner, the production of animal feed also went up by over 13 per cent against a decline of almost 7 per cent last year.

Along with the soaring exports of vegetable ghee, its production during the first quarter of the current fiscal year, showed a growth of over 30 per cent while mustard oil and soybean oil also increased by over 24 and 23 per cent respectively.

Similarly, the production index of processed tea also registered a healthy growth of 29 per cent while the production of noodles slowed down to 4 per cent. However, the production of sugar stuck to the same level of last year.

The production of tobacco products, which holds 13.78 per cent weight in the MPI, registered a surge of almost 15 per cent while such growth during the same period last year was 7.70 per cent.

During the period, the manufacture of woolen carpets, a major weight holder in the index of manufacture of textiles, slipped by 16 per cent, clearly reflecting that the major foreign currency earning industry is still in the doldrums.

Similarly, more intense decline of 20 per cent was also observed in production of ready-made garments during the period, whereas it had enjoyed a surge of 5.36 per cent last year. The decline in the production of carpet and garment, which comprise 80 percent of total overseas export, indicate the deepening gloom over the major exportable industries.

During the period, plastic industries showed the biggest surge of almost 50 per cent against almost 33 per cent witnessed during the same period last year. Similarly, the production of tire and tubes also increased by almost 16 per cent whereas change in its production last year was nil.

As a sign of improving performance of the construction sector, the production of cement, during the period, surged by around 22 per cent. The production index for iron rods also increased by 3 per cent while the production of corrugated sheet registered a marginal increase. However, the production of bricks remained at the same level of last year while the production of wood and wood products slumped by around 9 per cent.

PM assures of security

Post Report

KATHMANDU, Nov 29 - Prime Minister Sher Bahadur Deuba has expressed his commitment to provide a peaceful environment conducive to business stressing that the present concerns regarding security is only a temporary phenomenon.

"The government is committed to ensure the security of industrial locations and peaceful operation of industrial entities. We will ensure peaceful environment conducive to do business in any part of the country," said Premier Deuba.

Deuba was speaking at the inauguration of the fifth meeting of Nepal-China Non-governmental Co-operation Forum and an exhibition in the capital here today. The Forum was formed in 1996 at the joint initiatives of the two governments.

Stressing upon the need for foreign investment in Nepal, Deuba said that the government has been pursuing policy reform programme related to industry, trade and financial sector to give momentum to the industrial and commercial activities.

Furthermore, he said, "We are also working for the improvement of regulatory framework and environment with an objective to provide speedy and efficient services to foreign investors."

Highlighting that a high level of goodwill exists between the Nepalese and the Chinese, he said, "This forum has been formed to translate the good relationship into economic benefits to the people of both countries." The forum should explore new avenues of economic co-operation for mutual benefit.

Deuba said that the Chinese have the technology, resources, and the knowledge base, which could be utilised in the interest of both countries. "The government is eager to promote business by developing the necessary infrastructure and operational rules."

The Prime Minister, however, expressed concern over the increasing trade gap between the two countries. Though the trade volume between the two countries has increased tremendously over the years, exports from Nepal has lagged behind widening the deficit, he stressed.

On the same occasion, Nepal’s Ambassador to China, Rajeshwar Acharya said that healthy and sustainable growth in Nepal-China trade must be the thrust of the Forum.

He urged upon the need for the Chinese government to allow Nepal with the same facilities that it provided to Association of South East Asian Nations (ASEAN) countries recently. "China must look upon Nepal, a least developed country (LDC) and allow preferential entry to its products in the Chinese markets," he said.

Chinese Ambassador to Nepal, Wu Congyong expressed his commitment to further strengthen Sino-Nepal relations. "China is supportive to Nepal’s endeavours and encourages Chinese investments in Nepal," he said.

Rabi Bhakta Shrestha, President of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), said that the Nepali business sector is keen to learn from the experiences of China in areas such as infrastructure including hydropower, agriculture, electric and electronics and attracting foreign investment in export oriented industries.

Shrestha also lauded the positive happenings in the past few years, including the recent signing of the tourism agreement between the two nations. He also invited the Chinese entrepreneurs to make capital investment in Nepal on a BOT (Built-Operate-Transfer) basis.

Similarly, Zhang Xuwu, Executive Vice-Chairman of All China Federation of Industry and Commerce, who is also the leader of the 73-member delegation to Kathmandu, said that the Chinese side is eager to invest in Nepal.

Nepal-China trade volume stands at around Rs 15 billion presently and is on the rise. Exports from Nepal to China in the fiscal year 1999/2000 stood at Rs 514 million while imports stood at Rs 12.5 billion.

‘Develop infrastructure for ICT’

Post Report

KATHMANDU, Nov 29 - Experts in the field of Information and Communication Technology (ICT) have urged the governments of respective countries of developing infrastructure in order to keep pace with the fast changing technology.

Kunda Dixit, a renowned journalist and editor of Nepali Times weekly, stressed that the government should develop infrastructure. Only 0.5 per cent of the Nepali own computer and the telephone ownership is not above two per cent and a mere 13 per cent of the population has access to electricity. How can such a country take a part in a race of ICT? he questioned.

He also pointed out the need to provide competent teachers and textbooks to children in the school of remote villages before distributing computers to them. Dixit was delivering a keynote speech at an international conference on Information Technology, Communications and Development (ITCD-2001) in the capital today.

Dr Alfred Diebold, Resident Representative of Friedrich-Ebert-Stiftung (FES), Nepal, said that FES had organized the international conference with a view to showcasing Nepal’s ICT potential and sharing experiences and knowledge among the experts of ICT.

He also said that the two-day conference would dwell on various issues and aspects of ICT including the policies and laws, communications, role of Internet in social development, democratization of Internet among others.

The participants also warned that the digital divide is soon becoming the most visible component of the development divide. If not tackled in time, the divide will cause severe consequences for the developing countries.

Ajaya Kumar, Secretary to the Government of Kerala, India, said that digital divide could enlarge marginalization as access to opportunities to wealth creation is reduced or polarized and potential losses of considerable development opportunities as productivity and efficiency gains are not transmitted from the rich to the poor countries.

Presenting a paper on Telecentres in Rural Asia: Towards a Success, Roger Harris of Hong Kong , said that telecentres play an important role in minimizing the digital divide as they provide an alternative to the model of one-to-one individual access to a computer that predominates the developed world.

Earlier, Mahesh Man Shrestha, Secretary at the Ministry of Science and Technology, said that His Majesty’s Government of Nepal is making every possible efforts to promote the development of ICT in the country.

In order to facilitate the use of Internet and make it more accessible to a larger chunk of population, the government has deregulated the international gateway of telecommunications and an IT park is being constructed in Banepa, some 20 kilometers east of Kathmandu, he said.

The government has initiated the process of providing training in ICT with a view to produce desired manpower for the country. Within three years, 50,000 people will be trained in ICT and the government has also established a venture capital fund to boost the confidence of IT entrepreneurs, the secretary added.

Lochan Lal Amatya, President of Computer Association of Nepal (CAN) expressed the views that for a resource-poor country like Nepal ICT can play a vital role in expediting the pace of development.

The two-day conference organized by FES in association with CAN is being participated in by more than 100 experts from 25 countries, according to the organizer.