BUSINESS & ECONOMY

Nepal seeks cooperation in energy sector

Dr. Bhekh B. Thapa

Predominantly Hindu, India’s relationship with Hindu Nepal cannot be anything but friendly. Steeped in mythology, India’s relationship with the world’s only Hindu Kingdom predates history. Even so, some imponderables arise on the horizon to mar the scenic Himalayan landscape. The hijacking of the Indian Airlines plane from Kathmandu airport by Pakistan-sponsored terrorists is a recent case in point. In a knee-jerk reaction, the Indian authorities have suspended Indian Airlines flights to Kathmandu, depriving land-locked Nepal a critical channel of communication to the outside world. While security is definitely a reason for worry to Indian authorities, public opinion in India and Nepal is overwhelmingly in favour of resumption of Indian Airlines flights. “We must not lose sight of the fact that relations between Nepal and India are deep, extensive and people centric. One must not confuse unintended lapse and negligence on an occasion to question our resolve and fundamental commitment to fight the menace of terrorism”- Dr. Bhekh B. Thapa, Ambassador of Nepal to New Delhi, told The Financial Express, New Delhi. Despite the nasty hang-over of what Thapa describes as an occasional hiccup, economic cooperation with Nepal is apace and is being broadened. Three months ago, Jaswant Singh, India’s minister of external affairs, flew to Nepal for a handing over ceremony of a medical university built with Indian grant assistance of Rs.100 crore. Indian companies like Dabur have made Nepal a production base. Many others are in the process of committing investments. It is a steady relationship on all fronts, inching towards a free Common Market. Will an intransigent Pakistan allow SAARC to progress?

The following are excerpts of the interview:

Q. Do you think Indo-Nepalese economic relations have been progressing satisfactorily?
A. The history of Nepal-India economic cooperation dates back to the early fifties and have remained extensive. Starting in the fifties with the first road project, and economic cooperation has expanded to infrastructure, including airport construction, hydroelectric power, education and training and a host of other sectors and industries. Over the past two decades, the focus has shifted from education as Nepal has built its institutions and training centres. Infrastructure continues to be important. Currently , 23 major and medium bridges along the East-West Highway of Nepal are being built with Indian assistance. We expect handing over of these projects in the near future. Three months ago, Jaswant Singh visited Nepal and handed over the project of medical university in eastern Nepal, comprising a very large hospital and training facility, completed with Indian grant assistance of Rs.100 crore. The tempo of cooperation in various fields continues unabated.

Q. Are there any differences or disagreements between the two countries that could hold back enhancement of the level of economic cooperation? In this context, are you satisfied with the progress made to contain the menace of terrorism in the wake of Islamic fundamentalism?
A. The high level of cooperation has remained and expectation, based on a solid foundation, is that it would continue to remain so. I do not think the slightly disturbing developments of the past few months would adversely impact on the pace and level of economic cooperation. We have seen a slight setback due to suspension of Indian Airlines flights. I expect this to be corrected sooner rather than later because public and business community of both India and Nepal have registered their voices for resumption of air services. Our civil aviation authorities have initiated a dialogue. Above all, we must not lose sight of the fact that relations between Nepal and India are deep, extensive and people centric. The governments in New Delhi and Kathmandu must give priority to people’s needs and voices. Nepal’s commitment to fight terrorism and extend cooperation to root it out is deep and firm.  One must not confuse unintended lapse on one occasion to question our resolve and fundamental commitment to fight the menace of terrorism.

Q. What are Nepal’s objectives for the Indian market as well as the short, medium and long-term strategies?
A. For all practical purposes, the steps taken in the past five decades through various phases of trade treaties and transit arrangements is aimed towards eventual Common Market between Nepal and India. When the first trade treaty was signed five decades ago, it projected what is now commonly accepted as regional objective of free and preferential trade. In a sense, the vision established at that time, if anything, has become more appropriate in today’s context. Today, it is virtually an open border between Nepal and India under the umbrella of a very accommodating trade treaty of 1996. We are moving steadily towards more open and liberal trade arrangements. The only problem in terms of trade arrangement between Nepal and India is the huge trade deficit against Nepal, amounting to Indian Rupees nine billion. Owing to some increase in Indian investment in Nepal in the manufacturing sector and the consequent export of products to the Indian market, this deficit is now declining. Our expectation is that over time as Nepal develops its manufacturing base and the comparative advantage to Nepalese entrepreneurs gets strengthened, the extent of interdependence that is both desirable and healthy would be achieved, thereby making trade a mutually rewarding activity.

Q. Smuggling of Chinese goods into India through an extremely porous Nepalese border is a major headache for Indian authorities? What initiatives have been taken and planned to curb the menace of smuggling by the Nepalese government?
A. Smuggling is somewhat exaggerated and is definitely diminishing in scale. Three decades ago, given the fact that Nepal trade policy was liberal and India’s approach more restrictive, whatever we imported, given the open border, might have found its way into the Indian market. But from the mid-nineties, when India adopted an equally liberal trade policy, and now with the march towards the WTO regime, this issue will lose its relevance. I must add that encouraging smuggling has not and will never be a part of Nepal’s official policy. We have cooperated with Indian authorities and will always continue to do so.

Q. How do you assess the Nepalese investment climate in the context of the on-going process of globalisation? What had been Nepal’s track record in   attracting Indian capital?
A. From the mid-nineties after the conclusion of trade treaties and efforts of organised business community in India and Nepal-Confederation of Indian Industry, Federation of Indian Chamber of Industry- a major effort leading to investment from India to Nepal took place. Companies like Dabur, which used to import herbs from Nepal, have started manufacture in Nepal for export to India. Nepal Lever Limited has started a production unit for toiletries and cosmetics again for export to India. There are a few more examples in trade and travel industry. The climate for investment is not only good but we feel that there is a strong possibility of a boom in not only investment but also joint ventures. Nepal’s policy in the last few decades, has been to facilitate trade and investment from all countries. One area where we need to plan carefully and promote investment is utilisation of water resources. India has energy shortage especially in the other region. Major rivers that originate from the lap of the Himalayas offer environment-friendly and cheap source of energy that India needs acutely. This is where Nepal and India must join hands and do whatever can be done. Wherever there is a gap in capital and technology the two should reach out to procure it from overseas. I consider this to be the most vital sector that will elevate economic development to new heights.

Q. When you think of Nepal-India cooperation, what is it that worries you - socially, politically and economically?
A. We must operate within the limits of possibility and constraints we are facing both in Nepal and India. Nepal is a young democracy and the teething troubles that we see today must be looked upon as a passing phase. Socially, links between Nepal and India have been and will remain extensive. Politically our governments have displayed understanding to enter into major treaties on trade, transit and water resources that allows for long term, healthy cooperation.

Economically, we share a market within South Asia that will be increasingly inter-linked. The occasional hiccups arising out of concern of security or other related unpleasant developments must not be allowed to cast a reflection on long term objectives established through mutual understanding. Good relations between India and Nepal predate history and will continue indefinitely.

Kilroy's goes for the kill by opening a Steakhouse

By A Staff Reporter

Inspired by the great success of Kilroy’s of Kathmandu, a Thamel Restaurant, it’s promoters have established yet another restaurant near Kathmandu Guest House, Thamel.

The newly opened restaurant K-Too! Beer & Steakhouse, with the serving capacity of about 160 clients at a time, targets to sell over eighty-five thousand steaks in its first year.

“Even before its formal opening we have received a good response from our customers,” said Basu D. Ghimire, managing director of the Restaurant. “This is our second restaurant in Thamel in just a 16 months time,” beaming Ghimire informed.

With its world renowned master Chef Thamos Kilroy, who claims to have served world’s prominent figures like U.S. President Bill Clinton and British Prime Minister Tony Blair, Kilroy’s of Kathmandu became instant hit among tourists and restaurant-goer Kathmanduites. The new restaurant was inaugurated amidst a function on Thursday.