Potential of agriculture neglected in South Asia: HD Report

Post Report

LALITPUR, Feb 6 : Agriculture, the major source of livelihood for South Asia’s population, as well as the backbone of the industrial and trading systems, has not been receiving as much policy attention as the sector deserves, states the South Asia Human Development Report 2002.

The Report further says that investments in agriculture, by both public and private sectors is inadequate and is not helping agriculture play an important role in overall growth of the economy. The case is more apparent in the context of Nepal whose more than 80 percent of the population live on agriculture.

Agricultural prices, indirect and implicit taxation, and subsidy policies have led to inefficient resource allocations. Small farmers and the land-less poor have suffered because of either inappropriate policies or the inequitable application of good policies. In particular, the emphasis on macro-economic stabilisation has left the agriculture sector at the mercy of fiscal deficits, the state the Report prepared by Mahbub ul Haq Human Development Centre, Pakistan and launched by the United Nations Development Programme (UNDP), here today.

Since the green revolution, South Asia has achieved substantial progress in agricultural growth, but this progress has been neither adequate nor equitable to reduce the region’s huge backlog of poverty, says the Report.

The report, which especially focuses on agriculture and rural development, says that recently many South Asian countries have started undertaking institutional and policy reform, which ensures long-term development of South Asia.

The excessive use of Green Revolution technologies has led to substantial loss of arable land and environmental degradation, including soil erosion, water logging and salinity, the report says, adding that the irrigation systems and practices are very old and lack efficient use and maintenance.

"The Macro-economic framework in many countries of South Asia is not favourable to agriculture and has not, therefore, led to more rapid socio-economic development", the report states.

Agriculture continued to be one of the major sources of employment in South Asia although the percentage of labour employed in agriculture has witnessed a decline across the region. However, in Nepal the proportion of labour employed in agriculture actually increased during 1980-1999, reckons the report.

The report presents the sad aspect of women involved in the agricultural sector. Although women form the vast majority, over 70 per cent of South Asia’s population, that live in the rural areas, the number of rural women living in absolute poverty has risen during the 1990s. It is understood that women are responsible for producing food, they have the least access to means of production and receive the lowest wages. The case is more apparent in the Nepali context, the report adds.

In order to enhance better human development in the region, the Report says that development priorities should focus on the occupation of the people. "Human development cannot be achieved if development priorities do not focus on the occupation of the majority of people, which is farm and non-farm employment in rural areas," says the report.

Similarly, policies for food security must focus on empowerment of people so that poor people are able to purchase food. The larger South Asian countries have food stocks well above their requirements, yet over half a billion people in the region live below the poverty line. Moreover, small farmers should be focused for the revival of agriculture. The incentives that are being provided to corporate farming should not be at the expense of the vast majority of the rural populace, recommends the report.

Earlier, launching the Report, Dr Shankar Sharma, Vice President of National Planning Commission said that though Nepal is lagging in some aspects, its growth of human development is 18 per cent, while the average growth rate in the region is 11 per cent. He said that the performance of agriculture is the prerequisite for human development as Nepal is an agrarian country.

Dr Henning Karcher, Resident Representative of UNDP, speaking on the occasion proposed decentralisation, social mobilisation, agrarian reforms, and financial services and women empowerment for achieving better human development in Nepal.

Farid Rahman, member, Governing Board of Mahbub ul Haq Human Development Centre, Pakistan and Dr Hari Krishna Upadhyaya, Executive chairperson of centre for Environment and Agricultural Policy Research, Extension and Development (CEAPRED) also expressed their views on the occasion. al Policy Research, Extension and Development (CEAPRED) also expressed their views on the occasion.

NB Bank selected as PDF administrator

Post Report

KATHMANDU, Feb 6 : Nepal Bangladesh Bank Ltd. has been selected as the ‘administrator’ for the Power Development Fund (PDF), an alternative that the World Bank had proposed following its sudden retraction from the 301-MW Arun III Hydroelectric Project.

"Nepal Bangladesh Bank has been selected on the basis of the technical and financial proposal it made. It had the lowest financial bid," said a source to The Kathmandu Post on conditions of anonymity.

A joint team of experts, comprising representatives of International Resource Group (consultants to the World Bank) and Department of Electricity under the Ministry of Water Resources, had selected NB Bank on the basis of its financial and technical proposal.

The selection of the administrator comes nearly four years after the World Bank had floated calls for proposals to which NB Bank, Bank of Kathmandu (BoK), Nabil Bank Ltd. and Himalayan Bank Ltd had responded. BoK was disqualified in the second round when it failed to submit its bidding documents.

A selection committee had evaluated the technical and financial proposal of the three vying banks. NB Bank, the only bank with investment in Nepal’s power sector, has Asia Brown Boveri, an international syndicating, under-writing and consulting firm, as its foreign partner.

As the administrator of the proposed plan, NB Bank with its foreign partner would provide the necessary consulting services for implementing various hydro-projects. The major responsibilities include environment impact assessment, project monitoring and accounts maintenance, among others.

Sources close to The Kathmandu Post informed that the NB Bank with its foreign partner would enter into discussion with the World Bank most probably within the next two months. "Consultations with the World Bank are likely in March," said a source with NB Bank.

The proposed PDF, which will facilitate in the development of small and medium-sized hydropower plants in Nepal, however, is yet to be approved by the World Bank. Nonetheless, the selection of NB Bank as the administrator ends the doubts that reigned over the establishment of the PDF.

The World Bank is expected to pump in US$ 60-80 million for the purpose of developing Nepal’s power sector. With a grace period of 10 years, the World Bank, under the PDF, would provide loans with repayment periods of up to 50 years, free of interest.

Cabinet approves 10th Plan, MTEF

Post Report

KATHMANDU, Feb 6 : The cabinet meeting held on Tuesday approved the much-awaited Tenth Five-year Plan and Medium Term Expenditure Framework (MTEF). With the expected strong and broad-based economic growth, the newly approved plan, which is the main development manifesto of the country for the period of fiscal year 2002/03 to 2006/07, has reiterated poverty reduction as the sole goal.

The Tenth Plan, which has adopted various anti-poverty strategies, based on the lessons learnt from the Ninth Plan, in fighting poverty, has vowed to bring down the existing incidence of poverty to 30 per cent by the end of the plan period.

However, for the first time in the four-decade long periodic plan history of the country, the Tenth Plan has set two different economic growth rate targets, particularly with an objective of making the plan targets more realistic and attainable, especially in the wake of recently halted violence.

As per the changed targets, the original average economic growth rate of 6.2 per cent, defined as optimistic or normal growth rate, would be achieved only if the fragile security situation returns to normalcy and the economy starts reviving. The growth rate has been targeted to be achieved, by the growths of 4.1 in agriculture and 7.5 percent in non-agriculture sectors.

However, if the situation remains unchanged or further deteriorates, then the Tenth Plan expects low-case growth scenario, which has been put at 4.3 per cent. The targeted low scenario growth rates for the agriculture and non-agriculture sectors have been put at 2.8 and 5.2 percent respectively.

With an aim to address the root cause of the violence, the plan document was modified at the last moment and a separate chapter on Conflict and Development has been added with special focus on the grave problem of poverty and unemployment. The new chapter has adopted various policies and programmes, that among others, aims to prevent youth joining violent activities, by enhancing employment and income generating activities, particularly in the rural areas.

To materialise the targets set, the Tenth Plan has aimed at investing Rs 490 billion to Rs 640 billion. Of the total targeted expenditures of the plan period, government expenditures would be around Rs 205 to Rs 234 billion, while the rest is targeted to be met, from private investments.

Similarly, with the annual average growth rate of 7 to 11 per cent, the government has targeted to mobilise foreign assistance to finance 57 to 58 per cent of the total government investments. The plan has also aimed to achieve 10 to 15 per cent of annual growth rate in the development expenditure.

With a view to making the Tenth Plan document more concrete and result-oriented, the NPC has incorporated other complimentary documents, such as Medium Term Expenditure Framework (MTEF), Poverty Reduction Strategy Paper (PRSP), Immediate Action Plan (IAP) and Performance Indicators (PIs).

Similarly, sustainable and broad-based economic growth, development of social sector and rural infrastructures, targeted programmes, and good-governance are the four main strategies incorporated in the Tenth Plan.

Along with the Tenth Plan, the cabinet meeting also approved the MTEF, which for the first time, prioritises the development programmes to ensure maximum utilisation of scare resources in fighting against the worsening poverty situation of the country.

The MTEF, which is a three-year, planned resource allocation to aid the national goal achievable, has divided all the development programmes scheduled for the next three years in three categories and government has adopted necessary mechanism to ensure the flow of funds to the projects categorised in priority one. The MTEF, which has been praised by the donor communities, has set specific goals that are to be achieved in the next three years, particularly in the rural areas, to generate employment and incomes.

Index spirals down after bull rally

Post Report

KATHMANDU, Feb 6 : The latest spate of bullish trading in the Nepal Stock Exchange (Nepse), abruptly gave way today with the stock index plummeting by almost 7 points. Today’s fall in the index, a barometer to investor confidence, comes after three days of better outlook that pushed up the stock index by around 25 points.

With today’s fall, Nepse index again dropped to settle at 220.59 points. Investors’ confidence on the stock market had rebounded following last Friday’s declaration for cease-fire from both the government and the Maoists. The index had increased from last week’s closing of 203.54 points to 225.66 points on Thursday.

Experts are baffled over today’s steep slump stating that there is ‘no plausible explanation’ for such a fall. However, at the same time they pointed that it is due to the naivete of the market that the stock index movement has been so unusual. "A fall after a few days of gain is quite unusual," said Bishnu Chapagain, President of Nepal Brokers Association.

Stock experts were anticipating strong buying pressure in the wake of the latest initiation for peace from the warring sides, namely the government and the Maoists, which they hoped would push up stock prices for some more days to come, if not for long. Instead, there was a strong selling pressure in the stock exchange today, said Chapagain.

Nonetheless, he opined that pressure to sell might have been due to investors’ perception that the latest increments in the index and market capitalization of stock were only temporary. And that the investors might have wanted to make whatever money they could in the shortest possible period.

However, common investors do not rule out the possibility of manipulation and insider trading. "Such a fall in share prices and hence the index under the present circumstances when the future outlook is good, suggests that some insider trading might have taken place," says an investor, Gopal Sharma. "A stronger Securities Board is the need of the hour."

The fall in the index today comes due to a fall in the share prices of almost all companies, notably commercial banks. Stock prices of most banks today receded, pulling down the index. Among the major losers of the day were Nabil Bank Ltd., Nepal Bangladesh Bank Ltd., Himalayan Bank Ltd. and Nepal Investment Bank Ltd.

Fluctuations in the prices of stocks of commercial banks has a direct impact on the overall stock index and market capitalization since the commercial bank group commands the lion’s share in the total Nepse trading. The only gainer of the day was Lalitpur Finance Company Ltd.

The drop in the stock prices and index brought down the market capitalization. Capitalization, which measures the cumulative market value of outstanding stock, that stood at Rs 37.26 on Wednesday fell down to settle at Rs 36.14 at the end of trading at Nepse today.

Skeptics are of view that the stock market is not yet ready to come back on track. Nepal’s stock market performance had been on a continuous downhill since a single-day market crash that saw the index spiral down by over 22 points in February 2001. The stringent banking directives issued by the central bank and the imposition of a state of emergency in the nation were some causes of weak stock performance.

Gold price eases despite US-Iraq tensions

Post Report

KATHMANDU, Feb 6 : Despite the volatility in the international bullion prices due to global speculations being made over the timing of the United States led military action against Baghdad, gold prices in the domestic market, which lately has been rallying at the highest level in around seven years, eased today.

The price of the yellow metal that stood at Rs 9,400 per ten grams at the close of market on Wednesday receded by Rs 55 to touch Rs 9,345 today. The domestic price of gold was dragged down by an overnight fall in international gold prices, which touched the highest mark in seven years yesterday, following United States’ reiteration to strike Iraq.

International gold prices had touched US$ 388 per ounce during trading on Wednesday. However, the price opened at US$ 368 per ounce on Thursday morning, and then increased to US$ 372 by mid-day. The fluctuations are a result of the division in the international community over the Iraq issue.

The gold price upheavals seen in the domestic market in recent months is much higher than that seen over seven years back. The highest price of gold recorded in the country then was Rs 9,045 per ten grams, which was registered in September 1995.

Gold dealers in Kathmandu said that the international gold price fluctuations are likely to continue until a clear international mandate is drawn on Iraq. While gold prices would rise in the event of war, the bullion market would ease back if the United States’ action were delayed.

Domestic traders are unsure how the price movement would take place. "The international gold trading community as well as the domestic gold dealers have adopted a ‘wait-and-see’ attitude. Gold prices will depend on how the developments take place on Iraq," said Tej Ratna Shakya, President of Nepal Gold Silver Dealers Association.

A direct consequence of the heightened US-Iraq tension has been on the dollar that has been rallying at lower end against most currencies. That is because a lot of money has swerved in from the currency market into the bullion trade, which again is a reason for inflating gold prices through the economics of demand and supply.

In addition, gold is usually regarded as a safe haven for investors at the time of uncertainty, while dollar starts to rally down. A decline in the value of dollar against other currencies makes gold more attractive to international investors because the metal is priced in dollars in the world market.

Given the increment in the domestic bullion prices lately, gold traders said that the flux of consumers wanting to sell ornaments has been increasing. "The number of people who want to sell gold is certainly increasing," said Shakya. However, he added that Thursday being a public holiday, a clearer picture would be seen on the next few days.

Nonetheless, the capital based gold-silver dealers anticipate further rise in the resale business if the US-Iraq case takes a turn for war. Accompanying a boom in resale business, which provides opportunity to make quick profits to consumers, the retail demand of gold is expected to fall down.

New information technology project in the offing

Post Report

KATHMANDU, Feb 6 : Japanese Ambassador to Nepal Zenji Kaminaga today said that the Japanese government, in collaboration with United Nations Development Programme (UNDP), is mulling to implement an Information Technology (IT) project in Nepal.

He said that the main objective of the project would be to help develop the IT sector in Nepal. "Japan is seriously considering to help Nepal in the field of Information Technology," the Ambassador said.

Ambassador Kaminaga was speaking at the inauguration of a Nepal-Japan training programme on the application of IT in infrastructure planning and management in the capital here today.

The seven-day training programme on ‘Design and Management of Infrastructure using Information Technology’ is being organised by Association for Overseas Technical Scholarship (AOTS), Japan.

Meiken Consultants Co. Ltd., Japan, is implementing the training programme in cooperation with Meiken Digital Technology System Pvt. Ltd. (Nepal), Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and Nepal AOTS Alumni Society (NAAS).

Highlighting the benefits of the training programme, Ambassador Kaminaga said that 40 Nepali professionals would be given training in the applications of IT. Another batch of 30 Nepali youths has been selected for training in March in Japan, he added.

The objective of the programme is to assist Nepal in the development of human resources in the field of IT for application mainly in planning and development. Such training were initiated after the visit of Former Japanese Prime Minister Yoshiro Mori to Nepal over two years back.

On the occasion, Minister for Information and Communications Ramesh Nath Pandey said that a new world has now emerged based on knowledge. "Countries that are lagging behind in the development process now have the chance," he said.

"Through proper IT-related training for ensuring practical utilization of knowledge, a time will come when Nepal would have made its mark in the new knowledge-based world," the minister said.

Likewise, Binod Bahadur Shrestha, officiating President of FNCCI, claimed that Nepal has the latest infrastructure designs with the necessary tools and technologies. However, he conceded, "The only lacking is effective training in practical usage."

Stressing on the importance of human resources in a country’s development process, he said that ample supply of technical human resources in the present context is a must to induce efficiency and effectiveness in all settings.

Bijendra Shrestha, Managing Director of Meiken Digital Technology System Pvt. Ltd., said that proper management of data and assets demands technical manpower. "Nepal has sufficient IT experts, but lacks training," he said.

He added that with a good knowledge base as demanded by the present world, Nepal’s disadvantages could be converted into advantage. "Nepal has the capability to develop and produce IT products of exportable quality," he said.

Shuji Ogawa, President of OATS, Japan and Amira Dali, President of NAAS also spoke during the inauguration of the seven-day training programme.

Dugar‘s new showroom

KATHMANDU, Feb 6 (PR) - Dugar Iron and Steel Trading Company (DISTC) opened its modern showroom of sanitary equipment amid a function here today.

The showroom, which was formally inaugurated by Ashok Kumar, Charge d’affaires of the Indian Embassy, offers a wide range of sanitary products to customers.

Besides, the newly launched three storied showroom has also designed a number of model bathrooms, which according to the associates of the company, aims to inspire the middle class people for designing such bathrooms.

The showroom offers a wide range of reputed brands of sanitary products including that of Essco, Jaquar, Jaal, Kajaria Tiles, Hindustan Sanitary and Lorette among others. The company has also planned to provide free counselling.

Everest Bank’s operating profit up by 24 pc in first half

Post Report

KATHMANDU, Feb 6 : Everest Bank Limited has made a significant progress in the first six months of the current fiscal year as the bank’s operating profit increased by 24 per cent during the period.

According to a press release issued by the bank today, the figure of the operating profit has touched Rs 95.22 million despite the current downturn of the national economy. Such an encouraging growth in operating profit is achieved largely due to strict control over its Non-Performing Assets (NPA), which it claims to be the lowest in the entire banking sector.

The press release further states that the bank approved 20 per cent bonus shares in its eighth annual general meeting held today. The bank has also claimed to have registered a healthy growth of 22.38 per cent in its net profit during the fiscal year 2001/02.

While the deposits of the bank, at the end of the fiscal year 2001/02, went up to Rs 5466.60 million resulting in 19.5 per cent growth, the loan disbursement also followed the similar trend with the growth of 34.5 per cent during the period, the release further states.