Global meet on poverty opens

By Bhaskar Sharma

New Delhi, India, March 12: A three-day international partnership conclave on the theme ‘Governance and its Relationship with Poverty Reduction’ kicked off here today. Delegates from around the globe, mostly from Asia and Africa, are attending the meet.

The meet during the course of three-day will feature concurrent discussions and seminars that will try and correlate poverty reduction with governance, especially in the context of globalisation and the Millennium Development Goals - 2015.

The debate will focus not just on the efficiency of markets and linkages between democratisation and economic development but also on the creation of feasible, workable and accessible opportunities for the millions of poor people worldwide, among others.

The thrust of the programme, will be on how long-term and broad-based policy reforms can be pursued that can really help in reducing the frequency of the occurrence of poverty related problems. The programme, will also aim at strengthening the resources that are made available to grapple with the poverty-related problems.

Some of the major themes to be covered during the course of the concurrent programmes include integrating the ‘issue of sustainability’ in development planning, providing the poor an easy access to education and health, and ensuring greater market access for the developing and the underdeveloped economies.

Likewise, the deliberations will also focus on the disputed ‘trade and labour linkages’ and the protection of rights of farmers, which has been one of the strongest areas of thrust of activists in the context of globalisation and liberalisation. Another important aspect of the programmes relate to food security.

The conclave has been organised to mark 20 years of existence of Consumer Unity & Trust Society (CUTS), an international non-governmental organisation based in Jaipur, India, that has been advocating strongly to correcting the flaws in the World Trade Organisation (WTO) in favour of developing economies.

Some of the internationally acclaimed figures are also attending meet, including Pascal Lamy, Trade Commissioner for the European Commission, and Eveline Herfkens, United Nations Secretary General’s Executive Coordinator for the Millennium Development Goals Campaign.

Inaugurating the meet earlier in the day, Indian Minister for Commerce and Industry Arun Jaitley highlighted the reasons for the existence of rampant poverty. He added that poverty reduction in developing and underdeveloped economies is a tremendous challenge.

Jaitley added that only good policies backed by strong governance system could help reduce poverty. "While policy reforms is needed in developing and underdeveloped economies, good governance is of paramount importance to ensure that the policies adopted are carried out," he said.

Likewise, Inder Kumar Gujaral, former Prime Minister of India, said that rampant corruption is one of the core factors of poor governance. He said that weeding out corruption could considerably help in ensuring good governance. "Corruption flourishes when the State is involved in the market", he added.

However, Gujaral said that though withdrawal of the State from the market can lead to reduced corruption, hence better governance, to ensure the implementation of pro-poor policies that would be needed to achieve the goals of poverty reduction, the underdeveloped nature of the market demands government interventions.

‘Mobile team exercising to operate trolley bus’

Post Report

KATHMANDU, March 12: Coordinator of Civil Service Inspection and Monitoring Team (CSIMT), the mobile team for Bagmati and Narayani zones, Bharat Jangam, today said that the team is undertaking necessary exercises to re-operate the trolley bus services.

He claimed that the team, during its visit to various industries and offices, has found that most of the public enterprises (PEs), which the government decided to privatise, could be operated successfully. "PEs like Birgunj Sugar factory, Sajha Yatayat have good potential for revival."

He argued that the civil servants have been choosing the easy way out in the form of privatisation while dealing with the problem-gripped PEs. "The privatisation has become an easy escape for the officials to veil their inefficiency," he said, requesting the government officials not to take decisions to privatise potential industries in haste.

Speaking at an interaction programme with senior officials of Ministry of Industry, Commerce and Supplies (MoICS), its departments and agencies, Jangam asked the ministry to undertake the study on all of the PEs with good intentions, in order to find ways for their revival. "Let us join hands in reviving the downtrodden PEs," he said.

He further noted that lack of inter-departmental and ministerial co-ordination was another problem, which has rendered the effective service delivery difficult.

Directing the officials to do justice to their duty, he said, "Every civil servants must dedicate 40 hours a week for official works, for which he is paid."

Jangam also directed the senior officials to follow the rules and regulations strongly. "It is the rules and regulations that help develop any system. In democracy it the rule that govern people, not the personal discretion," he stressed.

In a strong note, he also directed the chief of the PEs, boards and committees not to allow their employees involve in any kind of political activity during working hours. "Chiefs of PEs are directed to throw away boards of employee unions, and lock their rooms during the duty hours," he said.

"We have been much criticised in this regard. But we are up to the task of motivating the employees to show devotion to the office that pays salary, and not to the political parties," he said. Rights to unite should be practiced out of the duty hours, he argued.

In the same vein, Kumar Bahadur Karki, member of CSIMT landed heavy on the civil servants for their inefficiency, poor decision-making and failure in maintaining good working culture.

According to him, a bunch of politically-appointed government employees have fouled the image of the entire bureaucracy.

"Bureaucrats are permanent government. They should not wear lenses of the temporary (political) government. That is totally unnecessary," he said.

Karki also stressed that the team would strongly enforce the reward and punishment system to motivate civil servants. Currently, the absence of punishment for corrupt officials has played heavy on the confidence of genuine employees, he remarked. "Long-run insurgency and other conflicts too have eroded their confidence," he added.

Meanwhile, Lab Kumar Devkota, Secretary of the MoICS, said that the directives issued by the mobile team were not different from the Employees’ Code of Conduct and they should follow it whole-heartedly. "Such rule-based behaviour and operations are foundations of good governance," he stated.

Khukuri entrepreneurs seek export policy

Post Report

DHARAN, March 12: Khukuri industry of the country has restarted breathing normal of late, especially in the wake of cease-fire announced between the government and Maoists. Citing the security reasons, the industry was controlled and kept under heavy surveillance following the imposition of state of emergency in the country.

The security agency has withdrawn its concern and control from the industry as the chances of the misuse of the typical Nepali knife has declined of late, according to local khukuri manufacturers. There are over 35 khukuri manufacturers in Dharan alone.

Dharan is one of the major production centres of Khukuri and most of the local production is exported to the third country. According to local producers, over 80 per cent of the knives produced in Dharan are exported

The industry, regarded as one of the good and potential handicraft industries, suffered a lot since the start of the Maoists insurgency. Over 500 people absorbed in the industry too were displaced since the imposition of emergency.

"Now that the control on production has been revoked, the cease-fire has regenerated hope in us," said Til Bahadur Suncheuri, President of Nepal Khukuri Entrepreneurs Association (NKEA).

Still there is an indirect surveillance on the sales and distribution of the product, which the local producers are aware. But that would not be the problem for the industry to pick up, opined the entrepreneurs. "The government should come up with some specific policy regarding its production and distribution."

"The policy should be simple and favour the development of the industry," stated the producers. They further argued that such a policy was mainly necessary to ensure consistency in the export of khukuris.

"The khukuris which are exported abroad and generate a good national revenue calls for a clear policy from the security authorities," said Suncheuri. Earlier, over 15,000 pieces of khukuris used to be exported in the international market every month.

The USA, Japan, Germany, South Africa and the UK, among others are the major markets of the Nepali knife. The tourist market is the largest consumer of Khukuri and is popular in the international market as a famous Nepali weapon.

The demand of the product is no less in the country. People in the production of the typical Nepali knife claim that the product has potential to establish itself as the major handicraft export. "However, the government needs to come up with suitable policy to reinvigorate the industry," added Suncheuri.

Locally produced Khukuris are currently used by Royal Nepal Army and armed police force as well. Bhojpur, Dhankuta, Damak (Jhapa) and Morang are among the major producers of khukuris in the east.

Japan grants Rs 75 million for debt relief

RSS

KATHMANDU, March 12: The government of Japan has agreed to provide a grant assistance of about Rs. 75,915,000 (976,000 US Dollars) to His Majesty’s Government of Nepal for debt relief in Japan’s fiscal year 2002, according to a press release issued by the Japanese Embassy here today.

The Government of Japan has been extending grant aid for debt relief to the Kingdom of Nepal with the basic objectives of providing commodities such as construction materials, fertiliser, petroleum products, medicines, transportation -related equipment and other materials which are essential for carrying out development activities in the Kingdom of Nepal.

The government of Japan has been extending such grant aid to Nepal for debt relief since 1978.

The Japanese Government has already extended about 1.78 billion Japanese Yen to Nepal in three separate instalments for debt relief in Japan’s fiscal year 2002, the Embassy stated.

Including the grant extended today, the total grant under debt relief in Japanese fiscal year 2002 which has been extended to Nepal Government for assistance in the ongoing development efforts and to uplift peoples lives has risen to about 1.89 billion Japanese Yen, the Embassy said.

An agreement to this effect was signed by Bhanu Prasad Acharya, Secretary at the Ministry of Finance and Zenji Kaminaga, Ambassador of Japan to Nepal on behalf of their respective governments.

On the occasion, Ambassador Kaminaga expressed his sincere belief that the continued support of the government of Japan to His Majesty’s Government of Nepal in its development efforts would certainly play a significant role in strengthening the existing friendship, co-operation and cordial relationship between the two countries.

Inflation, forex reserves up, trade gap widens

Post Report

KATHMANDU, March 12: During the first six months of the current fiscal year 2002/03 compared with the corresponding period of the fiscal year 2001/02, both broad money and narrow money supply witnessed sharp decelerating growth rates, states a press comminique of Nepal Rastra Bank issued here today.

The interest rates on treasury bills declined. So did the stock exchange transactions. Government budgetary operation on cash basis showed a sharp decline in the development expenditure.

According to the comminique, the growth rates of government expenditure and non-debt resources decelerated to 4.8 percent and 5.0 percent respectively, resulting in the widened budged deficit. Price situation saw moderate rise.

On the external front, increase in import and decline in export resulted in the sharp increase in the trade deficit which, coupled with the large decline in net services, widened the current account deficit, ultimately resulting in an unfavourable balance of payments (BOP) of Rs. 2.0 billion during the first four months of the fiscal year. The monetary statistics for the first six months, however, recorded a reduced BOP deficit at Rs. 529.5 million.

Gross foreign exchange reserve of the banking system amounted to Rs. 108.6 billion in mid-January 2003, large enough to finance merchandise imports of 11 months and merchandise and services imports of 10 months.

Compared to the growth of 3.0 percent last year, broad money supply grew only by 1.1 percent to Rs. 230.1 billion on account of the decline in the net foreign assets (NFA) of the banking system. Of the two components of the broad money, narrow money went up marginally by 0.5 percent to Rs. 78.6 billion compared to a rise of 6.4 percent last year. The second component, the time depostits, recorded a growth of 1.4 percent, equal to that of last year, to Rs. 151.5 billion.

The NFA of the baking system declined by 0.6 percent to Rs. 89.5 billion as against the 3.0 percent rise last year. Domestic credit of the banking system registered a growth of 4.3 percent to Rs. 217.3 billion compared to a rise of 3.3 percent last year. Credit to the private sector grew by 4.9 percent to Rs. 143.1 billion compared to a growth of 4.6 percent last year, states the comminique.

The rise in the claims on the private sector and that on the government contributed to the higher growth in the domestic credit. The weighted average treasury bills rate stood at 4.10 percent in mid-January 2003 compared to 4.85 percent in mid-January 2002.

Budgetary Operation:

Based on the cash flow data, the government expenditure increased by 4.8 percent to Rs. 30.4 billion as against a rise of 5.1 percent last year.

Of this, regular expenditure increased by 14.0 percent to Rs. 24.6 billion compared to the growth of 11.1 percent last year. The development expenditure, however, declined sharply by 24.4 percent to Rs. 4.5 billion compared to the decline of 17.2 percent last year.

The freeze expenditure declined by 12.7 percent to Rs. 1.3 billion in contrast to rise of 50.4 percent last year. The difficulties in carrying out development activities due basically to adverse law and order situation and weak performance in resource mobilization led to a decline in the development expenditure.

Total non-debt creating resources (revenue, non-budgetary and other receipts, and foreign grants) increased by 5.0 percent to Rs. 26.2 billion as compared to the growth of 7.4 percent last year. Of this, revenue collection, the major source of the government resources, went up by 6.0 percent to Rs. 23.4 billion compared to the growth of 4.4 percent last year.

According to the comminique, the revenue mobilization improved slightly due mainly to the rise in imports. Foreign grants slumped by 66.6 percent to Rs. 748 million in contrast to the rise of 52.0 percent last year. However, non-budgetary receipts, net, increased by 64.4 percent to Rs. 1.5 billion.

The government expenditure and non-debt resources decelerated to 4.8 percent and 5.0 percent respectively, resulting in the widening of the budget deficit by 3.6 percent to Rs. 4.2 billion in contrast to a decline of 7.1 percent last year.

In order to meet this deficit, HMG mobilized foreign loans amounting to Rs. 1.6 billion, issued development bonds equivalent to Rs. 2 billion, raised Rs. 303 million through the citizen saving certificates, and used surplus of Rs. 29 million in its other accounts. The remaining gap of Rs. 288 million was met through an overdraft from the Nepal Rastra Bank.

Price Situation:

The National Urban Consumer Price Index, on point-to-point basis, increased by 3.0 percent compared to a rise of 2.9 percent last year. The price index of food and beverages group increased by 3.2 percent compared to an increase of 4.6 percent last year.

Despite an increase in the prices of oil and ghee, grains and cereals products, beverages, meat, fish and eggs and restaurant meals, the sharp decline in the prices of spices, vegetables and fruits, pulses as well as sugar and related products resulted in a lower rate of price rise in the food and beverages group.

The price index of non-food and services group also went up by 2.6 percent compared to a growth of 1.2 percent last year. In the non-food and services group, the price of cloths declined by 1.3 percent.

Regionwise, the price indices of Terai, Kathmandu Valley and Hills increased by 3.9 percent, 1.8 percent and 2.2 percent respectively. Low aggregate demand, better supply situation and low inflation rate prevalent in the international market contributed to a lower price rise. The wholesale price index decreased marginally by 1.0 percent compared to a rise of 5.8 percent last year.

Foreign Trade:

On the external front, total export further shrank by 10.8 percent to Rs. 23.5 billion compared to a decline of 6.1 percent last year. Export to India witnessed a reversal this year as it declined by 21.5 percent to Rs. 13.0 billion compared to the marked rise of 33.1 percent last year, states the comminique.

Export to the third countries, which had declined by 37.1 percent last year, increased by 7.1 percent to Rs. 10.6 billion this year. Exports of readymade garments and jewellery to the third countries surged up by 46.2 percent and 28.0 percent respectively whereas that of the woollen carpets, Pashmina and tanned skin declined sharply by 29.2 percent, 12.9 percent and 50.7 percent respectively. Export to the third countries turned positive on account of the improved exports of readymade garments and jewellery.

Export to India declined following the introduction of the quantitative restrictions in the renewed Nepal-India trade treaty.

Import witnessed a positive reversal during the year. Total import increased by 10.1 percent to Rs. 57.7 billion in contrast to the decline of 8.0 percent last year. Import from India increased by 15.6 percent compared to a decline of 0.5 percent last year, while import from the third countries increased by 6.1 percent in contrast to the decline of 12.7 percent last year.

Imports of thread, rice, agricultural equipments and parts, cement, electrical equipments, petroleum products, M.S. wire, rod, tire, tube, M.S. billet, steel sheet, medicine, industrial chemicals, cold and hot rolled sheet as well as other machinery and parts from India and petroleum products, cloths, video, T.V., computer parts, transport equipments and parts, medical equipment, raw wool, plastic granules, cotton as well as telecommunications equipments and parts from the third countries went up this year.

Due to the decline in export and increase in import, the trade widened by 31.1 percent to Rs. 34.2 billion as against the decline of 9.9 percent last year. The export/import ratio, which was 50.3 percnet last year, went down to 40.8 percent this year. This ratio with India fell sharply to 50.4 percent from 75.8 percent last year, while the ratio with the third counties grew marginally to 32.5 percent from 32.2 percent last year.

Balance of Payments:

Based on the available BOP statistics for the first four months of the fiscal year, the service, net, deteriorated further as it declined by 48.8 percent to Rs. 1.8 billion following the decline of 51.6 percent last year. The transfer, net, which had risen by 19.1 percent last year, went up modestly by 2.8 percent to Rs. 9.5 billion this year. Consequently, the current account deficit widened sharply by 170.5 percent to Rs. 11.3 billion compared to the rise of 49.6 percent last year.

In spite of the sharp rise in miscellaneous capitals items, net, the capital account could not bridge the current account deficit, resulting in the overall BOP deficit at Rs 2.0 billion compared to a deficit of the same amount last year. The monetary statistics for the first six months, however, showed a reduced BOP dificit at Rs. 529.5 million.

The total foreign exchange reserve in mid-January 2003 amounted to Rs. 108.6 billion. The convertible reserve rose by 7.5 percent whereas the inconvertible reserve declined by 23.6 percent in mid-January 2003 compared to that in mid-January 2002. These percentage changes last year were-3.0 percent and 41.5 percent respectively.

The share of convertible currency in the total reserve rose to 80.4 percent from 74.4 percent last year, resulting in a decline by 6.0 percentage points in the share of inconvertible reserve to 19.6 percent. The rise in the share of the convertible reserve is attributable to an increased inflow of the workers’ remittances from third countries. A rise of 131.6 percent in trade deficit with India during the first six months resulted in the decline in the inconvertible reserve, states the comminique.

Major indicators of the stock market showed a decline during the year. Both the amount and the number of share transactions witnessed declines. Market capitalization of the listed companies went down by 16.7 percent to Rs. 32.1 billion. The NEPSE index slumped by 55.12 points (21.5 percent) to 200.80 in mid-January 2003.