Concessions required to bridge trade gap

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KATHMANDU, Oct 14 – Royal Nepalese Ambassador to India Dr Bhekh Bahadur Thapa today said that existing distortions in the Nepal-India bilateral trade must be eliminated.

He said that the present problems would not have arisen had the concerned parties taken appropriate steps on time, indicating the current squabble between Nepal and India over the renewal of the Nepal-India Trade Treaty of 1996, which is set to expire this December.

India had recently proposed for the Treaty renewal citing reasons like surge and re-export of third country goods from Nepal to India without substantial value addition.

"Nepal had to be serious about the problems right from the beginning when the Indian concerns were first raised more than one and half years back, but has shown seriousness only lately," Dr Thapa said. He was speaking at an interaction on Nepal-India Trade Treaty, organised by the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) Sunday.

"There is a need to settle the current issues in a manner that would lead Nepali trade to a healthy direction", he added.

There is a lack of transparency in government functioning, intellectual thinking and in commitment, and there is delay in reaction. "The need of the hour is change. Nepal should move in the same direction the world is moving," he said.

Economist Dr Prakash Sharan Mahat said that current focus of Nepal is on trade imbalance that is heavily in India’s favour. "Nepal needs concessions to balance bilateral."

There is a need to tap the potential areas that can contribute to increase exports to India, which will help in reducing the trade gap. "The thrust should be on exploiting the areas of comparative advantages," he said.

Economist Dr Bishowmbher Pyakurel said that time has come to settle the existing trade-related differences between Nepal and India at the political level. "Political leaders should show the same seriousness as they showed in the case of Maoists," he said.

"Seven textile industries in Nepal have closed down and nine others are on the verge of collapse due to imports from India. The government must be able to strongly raise such issues with the Indian side", he demanded.

Stressing on fair trade practices, Dr Mohan Man Sainju said that the Treaty must be renewed in a way that would prove beneficial to both Nepal and India in the long run.

First vice president of FNCCI Binod Bahadur Shrestha said that the Treaty should be revised keeping in view not just the next five years, but an additional vision of five more years. He also urged the two governments to agree to induce changes in the Treaty as per the recommendations made by the Joint Economic Council of the FNCCI and the Confederation of Indian Industries (CII).

Pradeep Kumar Shrestha, immediate past president of FNCCI, accused the government of giving less importance to trade. "The government is engrossed with political agendas and ignoring economic issues."

If the new Treaty curtails export of some Nepali items, industries manufacturing the items will close down, jeopardising huge investment. "The repercussion of curtailing exports may even be on the banking sector that has huge amount of investment in some industries, whose exports to India have lately become the topic of contention," he said.

Industrialist Diwakar Golchha said that some of the issues raised by the Indian side is genuine, but not all. Many complaints made by India are exaggerated, but the Treaty should be renewed in a manner that would ensure a win-win situation, he said.

Economist, industrialists and representatives of different organisations also participated in the interaction.

Containing food adulteration emphasized

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KATHMANDU, Oct 14 – Experts and concerned government officials say that due to limited resources and manpower and complex laws it has been difficult to contain food adulteration.

"With limited resources and manpower, it is being difficult to curb the rising cases of food adulteration in Nepal," said Urmila Joshi, Food Research Specialist at Food Technology and Quality Control Department.

There are individual food inspectors for every 50,000 people in other South Asian countries whereas a single food inspector has to look after every 1.2 million of people in Nepal.

The complexity of legal action against wrongdoers is the main defect in activating the Food Act, 2023. Government’s attorneys, police and chief district officers have greater role in taking action against food adulterers than the department, she added.

She was speaking at an interaction on "Food Adulteration and Consumer Welfare Law" today organised by Sewa Nepal, a non-governmental organization (NGO) working for consumers’ welfare.

The cases of food adulteration in the country are increasing. Last year around 15 per cent food items were adulterated of which 14 per cent was in the capital alone.

Various Acts and laws such as Food Act 2023, Feed Act 2033, Medicine Act 2035 and Consumers Protection Act 2054 have been formulated and enacted for the safeguard of consumers’ welfare in Nepal, but the cases of food adulteration are on the rise, said advocate Yagya Prasad Adhikari.

Though the food and consumer laws are made for maintaining health, facility and economic advantage of the consumers, laws have not been so far successful to meet their objectives, he added.

Farmers use pesticides to protect green vegetables like spinach, pointed-gourds whose remains affect public health. Likewise, mixing non-edible colour in pulses and food items especially sweetmeats are also detrimental to public health.

The cases of food adulteration rise during festivals like Dashain and Tihar, as consumption of food goes up during the periods, said Adhikari.Participants in the program pointed out the need to generate awareness by the media and the civil society to minimize the health hazard resulting from food adulteration.

United Nations on April 9, 1985 declared various consumers’ rights and welfare and also issued a model law for its member nations to enact such laws for consumers’ welfare. Participants suggested to keep price list in shops, to check the import of low quality food items and taking strong action against food adulterers. Kalyani Shah, President of Sewa Nepal also spoke on the occasion.

Broader partnership in health stressed

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KATHMANDU, Oct 14 - Representatives from various organizations including the World Health Organization (WHO) and the US Embassy on Sunday outlined the need to develop partnership strategies between the government and the private sector to ensure transparency and accountability of health services.

At a two-day national seminar on "Private Investment in Health Sector: Opportunity and Challenges" organized by Industrial Information Center (IIC), the representatives outlined a significant role of private sector in improving the health goals.

Given the lack of capability of the government and the dearth of resources at its disposal to reach out to villages, the experts outlined the need of coordinating both private and public sector enterprises for combating diseases and uplifting public health standards.

In the last ten years, estimated 4000 village development committees have been equipped with health services but the trickle down effect has been suffering largely due to poor investment and mismanagement. Not all these facilities are reaching out to the poor and diarrhoea and other epidemic-related disease continue claiming many lives every year, experts said.

Private sector spending on health services is reported significant. According to a report commissioned by Dr Tirtha Rana, Senior Health Specialist of the World Bank, Nepal Country Office, of the 10.9 billion rupees spent on health in the fiscal year 1995-1996, more than 70 percent was spent by private sector. This amounted to per capita private expenditure of Rs 370 inclusive of the government per capita expenditure, which is around Rs 525.

The government had prioritized poverty alleviation in the ninth plan and in the tenth plan, it is considering to give primary health care a top priority. It has prioritized the communicable disease and other public health issues and is seriously concerned how to contain them, said Dr Nirmal Pandey, member of National Planning Commission.

The draft on the tenth five-year plan states that the basic health care services will be privatized subjects to its cost viability. In all countries it has been recognized that governments alone will not be in a position to mobilise sufficient financial and other resources for coping with the challenging tasks ahead. "That’s particularly true in developing countries where far-reaching transition process are taking place and where resources are very scarce," Dr Klaus Wagner, WHO representative to Nepal asked.

"Partnerships for achieving health-creating goals must be based on ethical principles and values and a mutually agreed and explicitly defined division of responsibilities and labour," said Dr Wagner.

Referring to a dramatic decline of over 24 percent in the child mortality rate in the last 15 years, Larry Dingel, Charge’d Affairs at the US Embassy however, said that no countries in Asia has seen such a dramatic development in private investment in health sector than Nepal.

The two-day seminar is expected to come up with findings on opportunities and challenges of private sector investment in health sector, said Sneh Sayami, Executive Director of IIC. Experts also presented their papers at the programme Over 50 participants from various organizations related to health participated in the inaugural session of the seminar.

Economy, finance and market

By Supa Upadhyay

Domestic money market:

The banking sector remained tight for domestic currency after the massive withdrawals for great festival Dashain. The Average Weighted Discount Rate (AWDR) of 91-day Treasury Bills (TBs) remains almost unchanged at 4.77 percent of previous week. The rupee was traded higher at NPR 98.83 and lower at NPR 98.82 for 91-day TBs. The NRB had received 26 bids worth NPR 1652.50 million against the notified amount NPR 750 million. The Repo rates for member banks and institutions have been quoted at 5.7646 for the trading days 09 to 15 October 2001. The outright purchase facility for bank, institutions and other on TBs is also availabe. In the regular weekly auction, the NRB is going to issue 91-day TBs worth NPR 760 million on October 16, 2001.

Domestic capital market:

This week, the stock market lost marginally largely on selling pressure on the eve of Dashain. The NEPSE Index-100 opened higher at 282.88 traded vulnerably at the range of 282-283 in remaining trading days but it closed lower at 282.34 for the week, netting a marginal loss of 29 basis points over the week. This week, trading was estimated at 53288 shared valued NPR 22.3 million compared to 35750 shares valued NPR 15.0 million of previous week. Commercial Bank and Finance companies shared 78.43 percent and 19.80 percent respectively of total traded amount. Commercial banks and Production Sector improved, while Hotel Sector, Business Sector Finance/Insurance Sector lost. Other Sector remained unchanged. Out of thirty-seven traded companies, ten companies improved, fifteen companies lost and twelve traded companies remain unchanged at their previous prices. Bank of Kathmandu, Lumbini Finance and Everest Bank registered the first, the second and the third most traded companies trading 21972, 9920 and 2140 shares respectively. Share of Nabil Bank, Standard Chartered Bank, Nepal SBI Bank, Everest Bank, Nepal B’desh Bank, NIC Bank, Bank of Kathmandu, Lumbini Finance, Siddhartha Finance, and Nepal Merchant Bank & Finance were able to trade in all five working days. Likewise, Nepal Bank Ltd, Himalayan Bank, Everest Insurance, NEFINSCO, and Ace Finance were able to trade in four working days.

Forex round-up:

The USD strengthened against all its major trading partners over the week. The greenback improved sharply by over two percentage points and one point quarter percentage against the GBP and the EUR respectively over the week.

The INR lost marginally against the green back. Despite the Indian currency market being relatively sheltered, analysts said the US attack has raised risks for the currency. The RBI added $ 10 billion to its currency reserves, which are in excess of $ 45 billion, in the 12 months to August but analysts say even those flows are now at risk. In fact, it is willy-nilly going to bear the brunt of mounting tension in the immediate neighborhood. Economists said investors scaling back exposures to the United States may choose eastern countries like Singapore and Indonesia over India, both for their open markets and location. The trade account could be hit on both sides. Any rise in oil price will be a big blow for the country, which imports a large part of its crude oil needs. Further, another risk comes from deceleration in consumer spending in the United States, which besides being the market for a fifth of India’s exports is also the biggest buyer of the country’s consumer goods. As such, analysts from some foreign banks suspect that the INR may slip up to 49-50 by the end of the year.