XIth SAARC Summit
SAFTA benefits only if competitive edge is enhanced

BY A STAFF REPORTER

Kathmandu, Dec. 25: At a time when the SAARC Preferential Trading Arrangement (SAPTA) is already in operation and countries in the region are bracing for some sort of framework for free trade during the upcoming XIth SAARC summit, some prominent economists and business leaders voiced their concern as to how a land-locked country like Nepal could benefit from the new free trade regime.

Though it sounds challenging and an uphill task for the least developed countries (LDCs) in the region, they can accelerate their economy by selling their products and services in which they have more comparative advantages. "But the areas with comparative and competitive advantages should be identified first," they said.

The South Asian Free Trade Agreement (SAFTA), if it materialises, will give a boost to the economy of South Asia, the experts agreed. They added that LDCs like Nepal and Bhutan stand to benefit more.

But operationalization and success of the free trade concept largely depend upon various factors such as political relations, people-to-people approach and security issues in the region, they opined. "It is not only an economic exercise, various factors are associated with it."

Ratifying SAFTA during the XIth SAARC summit alone is not enough, the nations will have to strive to achieve their economic goals.

"For Nepal, it should work towards augmenting its competitive edge to benefit from SAFTA in real terms," said Padma Jyoti, vice chairman of the SAARC Chambers of Commerce (SCC).

Speaking at an interaction on "Relevance of SAFTA in the Present Context," organized by Mulyankan monthly magazine today, Padma Jyoti asserted that an effective operationalization of SAFTA could uplift the economy of the entire region making it at par with other developed nations. "But the countries in the region should identify and then develop the areas in which they can reap more benefits," he added.

Presenting his paper on the topic of discussion, Deependra Bahadur Kchhetry, a senior officer of Nepal Rastra Bank (NRB) said that Nepal has a number of reasons why it would benefit from SAFTA, but it has to develop its competitive strength in certain areas such as hydro-power, agricultural products and tourism. Gradually it should go into new areas like Information Technology (IT) and medical education, he added.

Regarding the prospects of SAFTA Prof. (Dr.) Guna Nidhi Sharma noted that it is essential to promote the economy of the LDCs in the region. The bilateral issues can be changed into multilaterlism, he said.

He said, " Apart from opportunities there are some complications - firstly it could trigger inequality among the people and the rate of unemployment could go up."

Prof. Sharma, who is also the member of Economic Advisory Committee of the XIth SAARC summit, reaffirmed that technical assistance for LDCs in the region is desirable. Given Nepal's present tariff rate at 12 per cent, other members should also review their tariffs as per the SAFTA rule, he added.

According to him the Advisory Committee has recommended more focus on Research and Development and Technical Assistance to the LDCs.

Former General Secretary of the SAARC Yadav Kant Silwal pointed out the need to generate mass awareness about the essence of SAFTA. The forthcoming SAARC summit will just prepare a Road Map for SAFTA, according to which each member nations will work how the idea should be put into force.

Pradip Kumar Shrestha, former President of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) stressed the need to develop Nepal's competitive advantage.

Keshav Acharya, a senior official at Nepal Rastra Bank (NRB) pointed out the need for giving stress on green revolution to prop up economy. He also noted that LDCs would be provided with certain concessions for a certain period of time.

Prof. Chaitanya Mishra said that SAFTA should be linked with other areas as well. "It is not just an economic exercise, various things like political relations and security issues should be taken into considerations."

Sneha Sayami, Director of Industrial Information Center (IIC) said that private sectors like FNCCI and Nepal Chamber of Commerce should make efforts to generate mass awareness about SAFTA and SAPTA.

Shyam Shrestha, editor and publisher of Mulyankan, also spoke on the occasion.

The SAPTA came into force from December 7, 1995, with a view to prop up trade by providing preferential treatment on certain goods. But, according to experts, it has not been as effective as was expected.

Be sensitive to consumers' rights: Khadka

BY A STAFF REPORTER

Kathmandu, Dec. 25: Minister for Industry Commerce and Supplies Purna Bahadur Khadka has urged all industrialists and businessmen to follow the spirit of the Consumer Protection Act with honesty. As the industrialists and businessmen show concern about their rights, they should be equally concerned about the rights of consumers as well, Minister Khadka noted.

Referring to the decision of the sixth meeting of the Consumer Protection Council Minister Khadka, who is also the chairman of the council, said that every business should abide by the Act.

Minister Khadka also noted that a business firm, before getting registered with the concerned government office, should get the consent of a consumer association. There has to be a regular review of whether the rules have been followed or not, he added.

On the occasion Commerce Secretary Bhanu Prasad Acharya stressed that industrialists and businessmen should accord priority to consumers' welfare.

Binod Bahadur Shrestha, first vice president of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), pointed out the need to be cautious about consumers' interest.

Secretary of Home Ministry Keshavraj Rajbhandari and joint secretary at the Finance Ministry Bhoj Raj Ghimire were also present on the occasion.

On-the-spot inspection
Banepa-Bardibas road work applauded

BY Ballav Mani DAHAL

Syauli Bazaar (Kavre), Dec. 25: Zenji Kaminaga, Japanese Ambassador to Nepal, today expressed his satisfaction over the on-going work to build the Banepa-Sindhuli-Bardibas highway. "It is appreciable that proper attention has been given to the safety and environmental concerns," Kaminaga said during an on-the-spot tour of the Dhulikhel-Syauli Bazaar sector.

The 34-kilometre Dhulikhel-Syauli Bazaar section, which is mostly blacktopped, has already come into operation. This part of the road comes under Section IV: Nepalthok-Dhulikhel (50km), out of the 158-km highway.

The Bhakunde Bensi-Dhilikhel segment (22km) of the Nepalthok-Dhulikhel sector of the highway was opened to public vehicles in March, 2001. And the Roshikhola-Bhakunde Bensi (12km) segment was opened in July this year.

The opening of the road has immensely helped the locals as they are seen selling fruits, crops and dairy products along the road and in markets like Dhulikhel and Kathmandu.

The Bardibas-Sindhuli Bazaar (37km), the Sindhuli Bazaar-Khurkot (39km) and the Khurkot-Nepalthok (32km) come under Section I, Section II and Section III respectively. Section I was completed in 1998.

During the observation tour, Bindu Shumshere Rana, Project Manager of the Banepa-Sindhuli-Bardibas Road Project, Hideo Katagiri of Nippon Koel Co., Ltd. and Nimiyama of Hazama Taisei Joint Venture, apprised Kaminaga of the construction works. He was accompanied by Madame Kamaniga, high level officials at the Embassy of Japan and officials of Japan International Cooperation Agency (JICA).

The construction work for Section IV is slated to be completed by March 2003. Rana, however, said the work could finish faster. "This may be completed by August 2002."

After completion of this section, the road will provide easier access to some of the northern remote areas of Sindhuli district and most of the remote areas of Kavrepalanchowk district.

Rana further informed that the project has received very good cooperation and support from the local people. According to him, more than 4,000 local people have been given employment in the construction works of the road in Section II and Section IV now.

He also said that His Majesty's Government has already distributed around Rs. 160 million to the locals in compensation for the land and the damage caused to their houses and crops. "The government has shown its full commitment and extended necessary support for the project," he said.

He said that the concept of bio-engineering has been adopted while constructing the road in keeping with the safety and environmental aspects of the road.

The highway construction is the largest Japanese government project undertaken in the underdeveloped countries in the area of infrastructure development. The road project is expected to be completed by 2007.

When completed, the highway will be 150 kilometres shorter as alternative to the existing road that connects the eastern Terai districts of the country with Kathmandu--i.e compared Mahendra Highway through Naubise-Mungling.

The project is expected to raise the living standards of the people living in the outlying hilly districts of Sindhuli, Ramechhap and Kavrepalanchowk. The authorities believe that the completed road will be instrumental in bringing about social and cultural development in the nearby areas.

Moreover, awareness programmes have also been launched to make sure that the local people feel they own the road. School teachers and students in the areas have been mobilised for the purpose. Besides, the road project has also plans to conduct income generating activities for the economically backward people living in the adjoining areas of the road.

As of today (December 25, 2001), the government of Japan, which has been the largest donor for Nepal over the years, has provided Japanese Yen 12,797,000,000 for the construction of the Banepa-Sindhuli-Bardibas Road. Apart from this, it has also extended support to Nepal in the social, economic and environmental fields along with heritage conservation.

In 1996, the government of Japan and His Majesty's Government/Nepal had signed a bilateral agreement to construct the highway.

NEFFA protests decision on bank guarantee

BY A STAFF REPORTER

Kathmandu, Dec. 25: Nepal Freight Forwarders’ Association (NEFFA) has protested the recent decision of Qatar Airways and the Gulf Air to hike the bank guarantee its members would need to show as their stock agents.

"NEFFA disapproves the decision of the airlines," president of the Association Rabindra M. Singh said today. "Increase the amount of bank guarantee violates the provisions of the agreement between the two parties."

NEFFA and the two internationally reputed airlines had signed an agreement in July 2000 under which some two dozen NEFFA members would be their stock agents. For this, each agent needed to show a bank guarantee of one million rupees to the airlines.

The airlines have now demanded double that amount in bank guarantee citing ‘increased risk factors’.

"We were compelled to increase the bank guarantee amount owing to a heightened risk on us," said Gulf Air’s general sales agent Bhola Bikram Thapa. "The risk comes because NEFFA has failed to keep its promise to assist us in collecting our blocked money. We can’t give them a privilege keeping ourselves at risk."

NEFFA in a press statement said that the move of the airlines was not justified. "The decision is untimely – it should not have come when the Nepalese export has nose-dived. This will hit the declining export trade further."

Singh, responding to a query on what the Association’s reaction would be if the airlines didn’t review their decision, said, "We won’t work with them."

Move to save forests
Teams to be dispatched to study forest situation

BY A STAFF REPORTER

Kathmandu, Dec 25: Working on tips the Ministry of Forests and Soil Conservation received lately that the forests were coming under assault, the government today decided to send three teams across the country to study the actual situation in the field.

The teams will study as to how the forests are being denuded and the wood smuggled and submit a report to the government in 15 days.

"This move is a caution to save forests," said Udaya Raj Sharma, spokesman of the Ministry. "We have received some information that there are irregularities."

He said there were possibilities that deforestation could have increased. "But we don’t have any specific data as yet," Sharma explained the rationale behind dispatching the surveillance teams and said he was not sure if deforestation increased during the state of emergency.

Some 29 per cent of Nepal’s total area, which comes to about 5 million hectares, is covered by forests. Of this, 700,000 hectares of forests are managed by the communities, benefiting 1.1 million households involving 10,000 users’ groups.

"The rate of denudation is 1.7 per cent per annum," said Sharma. "The hills have a faster rate of deforestation at 2.3 per cent against 1.3 per cent in the terai."

According to Ministry sources, the teams will consult with local units and lead the initiative to protect and promote forest resources by making the work more effective.

Shesh Hari Bhattarai, deputy director general of the Forest Department, will lead his team from Jhapa to Chitwan; Sri Gopal Jha, research officer at the Ministry, from Chitwan to Kapilvastu and Balaram Adhikari, forest conservation officer, from Banke to Kanchanpur.

Three terrorists killed in clashes Arms and ammunitions recovered

BY A SAFF REPORTER

Kathmandu, Dec. 25: Three terrorists were killed in separate encounters with the security forces and eight suspects were arrested in different parts of the country, the Defense Ministry said today.

One terrorist, Dip Bahadur Wan, was killed on the spot in army action at Jugu Ilaka of Okhaldhunga district on Sunday when the man tried to break the security cordon, the Defense Ministry statement said.

The dead terrorist is learnt to be the secretary of the so-called people’s government and ex-commander of the terrorists’ armed group.

Another terrorist was shot dead in the military offensive at Kholkhole of Gorkha district today. Security forces gunned down Deepak Adhikari alias Binay on the spot when he defied the army’s order to surrender himself.

Likewise, one terrorist was killed in an encounter with the security forces at Narayanpur area of Kailali.

Security personnel, meanwhile, arrested three suspects in Barmja of Baglung, one in Salyan of Solukhumbu, one in Ghartigaun of Rolpa, one in Palung of Makawanpur, and one each in Sandhikharka and Dharapani of Arghakhanchi.

In another major development today, soldiers recovered 10,000 bullets, a large amount of explosives, guns used by terrorists and government documents from Korchang of Rolpa, most of these items the terrorists had looted from the army barrack of Dang about a month ago.

The security forces also seized 7 muskets, materials used in making bombs, combat dresses and terrorist literatures from the same place. The security personnel are continuing to search for terrorists in the area.

The security personnel have also seized 18 muskets, ammunitions and documents from Gadhi Ilaka of Makawanpur and eight muskets, spare parts for guns, pressure cooker bomb and documents from Motidhunga of Dhankuta districts.

Meanwhile, a total of 41 terrorists have surrendered to the security forces in Hetauda.

Interaction on civil aviation
RNAC needs restructuring: KC

BY A STAFF REPORTER

Kathmandu, Dec. 25: The country does need a national flag carrier and efforts should be geared towards making the Royal Nepal Airlines Corporation (RNAC) operate more efficiently, Minister for Culture, Tourism and Civil Aviation Bal Bahadur K.C. said here today.

Speaking at an interaction "National Civil Aviation Policy and RNAC’s future," the minister said that the government is there to support the flag carrier. "Is there any help coming from other quarters, including the private sector, to revitalise RNAC?" he asked.

RNAC’s internal management needs restructuring, he said. "If RNAC is criticised for the downturn in tourist arrivals, then how can the critics help the airlines?"

However, most other participants in the interaction programme, organised by Hotel Association Nepal (HAN), called for the privatization of RNAC. "The national policy on civil aviation has clearly stated that the international operation of the national flag carrier would be gradually privatized," said Narendra Bajracharya, President of Hotel Association of Nepal (HAN). "But nothing of that sort has happened so far. And if we let RNAC go the way it is going now, its future is pretty uncertain."

Bajracharya mentioned that the national flag carrier’s fleet has today come down to nine – two Boeing 757s and seven Twin Otters – from 18 in 1987. "That was the golden age when the corporation operated 18 aircraft including two Boeing 727s and two Boeing 757s."

Elaborating on the factors that cause losses to the national flag carrier, he said that RNAC spends 4.6 million Rupees a year for parking its grounded Avros. "What’s more, it pays Nepal Oil Corporation US$ 360 per kilo litre of fuel while it pays US$ 100 for the same fuel in Bangkok and 170 US$ in New Delhi."

Unnecessary expenses like that apart, RNAC, overstaffed with 1800 people on the payroll, accrues a monthly loss of Rupees 10.5 million in its domestic sector, he said. "Above all, the airlines has not been able to bring out its balance sheet for the last four years."

RNAC Executive Chairman Ramagya Chaturvedi admitted the annual loss in the domestic sector. "That is because RNAC also has the responsibility of operating in the remote areas and clearly these sectors are not for making profit."

He also said that the national airlines was earning less than what it should from its international routes. After cutting out the European, Singapore and Dubai routes beginning last September, RNAC has been flying to seven sectors in five countries as it is left with only two Boeing 757s to press in its international sector. Until the middle of this year, the airlines used to operate its two Boeings 757s and two other leased aircraft – one Boeing 757 of China Southwest Airlines and the other Boeing 767 of Lauda Air.

Due to its dwindling fleet, RNAC’s share in bringing in tourists is swooping down rapidly. Till the mid-90’s the national flag carrier accounted for 40 per cent of inbound tourists by air. Last year, the figure went down to less than 30. Around 90 per cent of the total inbound tourists reach here using one or the other 15 international airlines operating to and from here.

Furnishing financial statistics of the national airlines, he said RNAC now has already an overdraft of Rupees one billion while it has the liability of Rupees 1.5 billion. "The good news is the corporation still has an asset of seven billion Rupees and it can even grow if there is proper restructuring."

Chaturvedi also agreed that privatisation can be a way out for the troubled national flag carrier. "But, even for the privatization, we need to first strengthen RNAC’s financial status so that it fetches more value."

Pradeep Raj Pandey, Chief Executive Officer of Nepal Tourism Board, said that the idea of strengthening RNAC before privatising it would only be a wastage of time. "It is like spending money on something to recover the same money spent."

He also blamed the tourism industry for giving different confusing directions to the national flag carrier.

He said there are many ways of privatization including giving away the management on contract, or breaking up the corporation into several parts to be handled separately. "Or there could also be the idea of dissolving the corporation to come out with a new national airlines."

Secretary at the Ministry of Culture, Tourism and Civil Aviation Birendra Bahadur Deuja said that RNAC needs an efficient management that could make the right analysis and decisions to run the airlines in a profitable manner.

"If RNAC is privatised, it is better if the government retains some shares for itself," said Prithvi Raj Ligal, Vice Chairman of the National Planning Commission. "Privatisation does help in maintaining transparency and in eradicating government intervention."

SAARC outlook
SAARC needs clear vision: Dr. Silwal

Kathmandu, Dec. 25 (RSS): Former secretary-general of the South Asian Association for Regional Cooperation (SAARC) Yadav Kant Silwal has applauded the role played by the government as the host nation in the preliminary preparations for the forthcoming SAARC Summit which is tied to the dignity and capability of Nepal and the Nepalese.

Silwal made this remark in an interview given to RSS reporter Uttam Silwal in connection with the forthcoming 11th SAARC Summit going to be held in Kathmandu from Jan. 4 to 6, 2002.

Silwal , who successfully completed his role as SAARC secretary general during his two year term from 1994 to 1995, expressed the hope that the forthcoming SAARC Summit which is equally being seen with keen interest and enthusiasm by civil society, political parties as well as the diplomatic missions, will help improve the economic status of the people of the region by promoting goodwill and brotherhood among them on the basis of mutual interest and confidence.

He expressed the view that the immense means and resources of the region should be properly harnessed and managed on the principles of natural justice in the present context when countries from the rich ones to the poor are adopting the concept of regional cooperation associations for their progress and development.

There is a need for clear vision, confidence and commitment at the highest level for this, he added.

Since the main objective of establishing any regional cooperation association is focused on improving the economy of the region, special priority should be given to economic aspects in the forthcoming SAARC Summit, he pointed out, stressing the need for mobilising national, regional and international financial institutions for the development and construction of the region for materialisation of the poverty alleviation programme.

Although SAARC has been established with the main goal of improving the economic status of the people of member countries and the region as a whole, the expected economic progress has not taken place as the proposal for constituting inter-governmental groups on a SAARC Preferential Trading Arrangement (SAPTA), which would have direct bearing on the economy of the region, and the South Asian Development Fund, came up late only during the seventh SAARC Summit in Dhaka in 1993, he elaborated, stating that every SAARC Summit thereafter has laid stress on the economic aspects.

He opined that the process for joint and speedy work towards this direction has been somewhat delayed due to the compulsion on the part of the member countries for internal adjustments on sensitive issues like the concept of free trade, customs duty concession, establishment of industries and businesses and entry of foreign capital owing to the stark differences in the economic, social and geographical aspects of the various member countries.

Rejecting public comments such as that the SAARC activities are not effective and SAARC has failed to attain its professed objectives, the former SAARC secretary-general said that the work and results of any regional organisation cannot be evaluated in 15 to 16 years.

SAARC has been able to play a more effective and productive role than other such regional bodies like ASEAN, OAU, etc, he added.

Stating that some general uncomfortable situations that arise between member countries from time to time are limited to those countries alone, he said at present there is no alternative to SAARC for the people and the countries of the region.

Recalling that such regional tension had arisen from time to time during his two year term as SAARC secretary-general when the then international community had started putting a question mark on the existence of SAARC itself, Silwal said there are always and everywhere such general differences and conflicts among member countries as geographically, socially, culturally, economically and politically varied states as SAARC member countries.

The eleventh SAARC Summit which is taking place here within a short span of 16 years of its establishment and formulation of various policies and programmes by holding consultations on matters of common interest and concern and the presence of the heads of the state or governments at such summits in the capitals of all the member states except Bhutan are an achievement in itself, former SAARC secretary-general Silwal stated, pointing out the need for SAARC to orient itself towards practical, contemporary and result-oriented activities in the present new environment by evaluating its past performance.

SAARC has been able to give continuity to various activities no matter what the situation and the issues thanks to the provision that bars raising of any bilateral issue at the summits, he said and expressed the view that SAARC would move in a positive direction if bilateral issues are also taken up at the summit meetings in a cordial and healthy manner.

He suggested it would be better if the member states gave attention to this aspect as well.

Important achievements are made on bilateral and multilateral topics and cordial relations are established among the member states during the informal meetings that take place on the sidelines of the SAARC Summit meetings, he said adding, but it depends on the concerned states to make most out of the opportunity.

Stressing joint efforts at both the national and regional level to combat terrorism which has become a topic of global concern and interest, he pointed out the need for carrying out an evaluation of past SAARC declarations and effective implementation of various conventions and agreements in that regard.

He said since it is a part of our tradition that it is a pious deed to honour our guests and hold them in high esteem, it is our duty as citizens of the host nation to cooperate whatever way we can from our respective places in making the eleventh SAARC Summit, the first such summit of the 21st Century, which is taking place in Kathmandu, a grand success.

HR situation during emergency discussed

Kathmandu, Dec. 25 (RSS): The Forum for Protection of Human Rights (FOPHUR) organised an interaction programme on "State of Emergency and Human Rights" here today.

At the programme, ex-speaker Daman Nath Dhungana said politics based on popular opinion is much more powerful than the politics of violence which only obstructs healthy political change.

It has become clear that people never rally behind those who take up arms, he observed.

MP Subas Nemwang of the CPN-UML was of the view that constitutional amendment and socio-economic reform programmes are a necessity for resolving the problems facing the country today.

MP Navaraj Subedi of Rastriya Janamorcha held Maoist activity mainly responsible for imposition of the emergency and stressed the need for the Maoists to mend the flaws in their political thinking.

Member of the National Human Rights Commission Prof. Kapil Shrestha accused the Maoists of undermining people's individual freedoms through violence and terror for the past six years and stressed the need for human rights activists to play a watch dog role so as to safeguard those rights.

President of Human Rights Organisation of Nepal Sudip Pathak stressed the need for the political parties, the government and the Maoists to pave the way for dialogue and said that laying down of arms should, however, be a precondition for dialogue.

CPN-UML politburo member C.P. Mainali spoke of the need to bring about economic and social change so as to strengthen the democratic system.

Hariyali Party president Kuber Sharma, president of All Nepal National Free Students Union Rabindra Shrestha, Ghanashyam Sharma of Samyukta Janamorcha, Nepal Bar Association president Sindhu Nath Pyakurel and journalist Malla K. Sunder also expressed their views.

FOPHUR general secretary Krishna Prasad Shiwakoti presided.