-By BMD

As suggested and recommended by the Pacific Asia Travel Association (PATA) Marketing Task Force and various associations of tourism entrepreneurs in  Nepal, Nepal Tourism Board (NTB) has formulated its marketing plan for1999-2000 to sell Nepal’s tourism destination and products in the world tourism market.  The PATA Marketing Task Force had visited Nepal (when?) to help NTB to formulate the marketing plan. It had also met with different persons involved in the tourism industry and national and international agencies showing interest in the development of tourism in Nepal.

Pradeep Raj Pandey, Chief Executive Officer (CEO) of NTB, says that NTB has prepared the marketing plan after holding discussions with different tourism entrepreneurs and agencies. He claimed that NTB has included the feedback and suggestions of the tourism entrepreneurs in the marketing plan.

 “We will launch promotional, marketing and product development activities on the basis of experiences and feedback being received from tourism entrepreneurs and intellectuals in the future,” he says.

Pandey says that NTB has made efforts to make the best use of the limited resources it has at its disposal. He also assured that NTB is committed to revitalize Nepal’s tourism industry.

NTB has decided to concentrate its activities on a few specific countries with major potential for Nepal. On the basis of

-By Our Correspondent

With a view to promoting Nepal as a tourist destination in India, Nepal participated in four-day 15th Travel Trade Fair (TTF) organised in Calcutta  recently.

 About two dozen participants under the leadership of NTB took part in the fair.

According to NTB sources, the TTF’99 Calcutta was participated by more than 150 organisations from Australia, Bangladesh, Dubai, Mauritius, Singapore, Sri Lanka, Thailand and Nepal.

Several newspapers in Calcutta such as The telegraph, The Economic Times and Anand Bazaar Patrika  had published articles and advertisements  regarding Nepal’s tourism attraction and about Nepalese stalls in the TTF. Nepal pavilion was decorated with picturesque photographs on Nepal’s rich natural and cultural heritage.

Similarly, a video document  entitled “Nepal-Mountains & More”, which was prepared by NTB for international promotion, was shown at the NTB stall. NTB also distributed publicity materials like brochures, posters and CDROMs to the participants and visitors.

 Private sector participants from Nepal also had business promotion and sales during the fair. Moreover, NTB in association with the Royal Nepalese Consulate General, Calcutta, organised a workshop on Destination Nepal at Hotel Grand Oberoi. A press kit comprising of all the detailed brochures and a multimedia CDROM specially made for Indian market were distributed to the invitees.

 TTF, the pioneering travel mart in India started a decade ago in Calcutta.

The participating companies from Nepal in TTF’99 included NTB, Potala Travels, Grand Hotel, Casino Nepal, Manakamana Darshan (P), Image Nepal, Nepal Sagarmatha Travels, Heritage group, Nepal Touristic Journal, The Everest Hotel,  Ashish Travels, Karnali Inter Tours, Hotel Paradise, Shangrila Hotel & Resorts, Yak& Yeti Travels, Zenith Experience Travels, Nepal Travel Agency, Hotel Radission, Jomsom Mountaineering Resorts, Hotel Fulbari, Hotel Plaza International, Riverside Springs Resort, RNAC, Necon Air, Fish Tail Tours and Travels and Hotel Holiday Taj.

-By Krishna Shrestha

 “Nepal has a long way to go in establishing a well-functioning financial sector,” said Hans M. Rothenbuhler, Country Director, Nepal, World Bank.

 “Financial Sector reform will have the biggest impact on the rural economy, including the rural poor,” said Dr. Richard Vokes, Asian Development Bank’s Resident Representative to Nepal.

 “The appropriate reforms in our financial system is long overdue,” said Pradeep K. Shrestha, President of Federation of Nepalese Chamber of Commerce and Industry (FNCCI).

 “Financial sector reform is indispensable for sustainable development and economic growth,” said Mahesh Acharya, Minister for Finance.

For two whole days of the last week, experts from and abroad gathered here in Kathmandu and discussed on various aspects of financial sector reform in two separate programmes.  Experiences gained in India, Malaysia, Korea and Thailand were shared.                 

On Monday, Nepal-USA Chamber of Commerce and Industry (USACCI) had organised a workshop on “Financial Sector Reform in Nepal: Role of the Central Bank and Other Key Players” in Kathmandu. Similarly, Asian Development Bank, Nepal had organised a workshop on “Financial Sector Reform and the Corporate Sector in Nepal: Achieving Market-Augmenting Governance for Growth and Equity” in Kathmandu on last Tuesday.

 Though there is a debate on term “second phase”, many say that second phase reform programme in financial sector is a must if the country is to achieve the goals of development.

 “The importance of financial sector in economic transformation process is so important that small tremors in the financial sector can create large earthquakes in the real sector. It is a sector whose services are used by all other sectors of the economy and so, a healthy and well functioning financial sector is a necessary precondition for achieving the goals of the national progress,” said Pradeep K. Shrestha in the workshop organised by Nepal USA Chamber of Commerce and Industry (NUSACCI).

 The FNCCI president did not hesitate to say that in Nepal, even though reform process was started almost a decade ago (in finance sector, it was even earlier in the 80s), the results so far have not been satisfying.

  “The need of financial sector reform has been realised as a very important dimension for the over all economic growth of the country. All the players such as the Government, the Central Bank, and the banking sectors have key roles to play in the process, particularly in a liberalised economic environment,” said Narendra K. Basnyat, President of Nepal-USA Chamber of Commerce and Industry (NUSACCI).

 “When we talk of ‘financial sector’ in Nepal it means primarily the banks, that is, if you keep the traditional moneylenders out,” said Padma Jyoti, Chairman of Jyoti Group and former president of FNCCI.

 He said the banking transactions in Nepal are dominated by collateral of property and personal guarantee.  Does competition exists in banking sector as in other sectors? Asks Jyoti.

“In regard to financial sector reform, we need a new vision, a changed mindset and new role to be played by all the players,” said Shovan Dev Pant, General Manager of NABIL Bank Ltd.

            However, in a workshop on “Do We Need Economic Reforms Phase II” organised by Institute for Integrated Development Studies on June 1999, Dr. Yuba Raj Khatiwada, Economic Advisor in the Nepal Rastra Bank, the central bank of Nepal, recommended that in view of experience of the financial crisis in South East Asia, the speed of financial sector liberalisation (with regard to capital convertibility) in Nepal should be cautious and gradual.

 Other recommendations given by him were:

  a) monitoring and transparency in the context of several prudential norms such as capital adequacy ratio, loan classification, loan loss provisioning, interest income recognition etc. are highly essential in order to ensure a health future for the financial institution.

 b) In view of large shares of non performing assets of Rastriya Banijya Bank and Nepal Bank Ltd., necessary legal reforms should be introduced particularly on the aspect of debt recovery.

  c) There is an urgent need to reorient the financial institutions for rural financing.

  Meanwhile, His Majesty’s Government has announced that it will take measures for financial reform. Amendment of the Nepal Rastra Bank Act is one of them. In the budget speech for the fiscal year 1999/2000, various measures have been announced.

  “The monitoring, supervisory and regulatory functions that were developed and entrusted to this bank (Rastra Bank) have proved rather inadequate and, at times, even ineffectual in the present context.

 “The growth of commercial banks and finance companies reinforces the urgent need of improved prudential regulation and supervision of commercial banks and other financial intermediaries,” said Minister Acharya.

According to Minister Acharya, the government has been considering amending other acts that would help promoting the healthy development and functioning of the banking and non banking sectors, promoting private participation in Rastriya Banijya Bank, creating congenial environment for establishing of an international financial centre, reforming the weaknesses in the commercial bank sector, reviewing the present provision limiting foreign ownership of the shares of joint venture banks to fifty percent with a view to revise it upward among others.

 “Experience throughout the world confirms that countries with well developed financial system grow faster and more consistently,” said Minister Acharya.

 At the time when there is a growing concern considering the financial sector reform, the government also seems committed to speed up the financial reform process.

 But there are some economists who are suspicious of reform process.

“The objective of the reform should be clear. What kind of financial sector reform we are undertaking?,” asks Mohan Man Sainju, Executive Director of Institute for Integrated Development Studies.

He says that such reform should deliver benefit to the rural poor.

-By Our Correspondent

Experts and senior executives of the Nepal Rastra Bank (NRB) say the central bank should be given full autonomy.

Nepal Rastra Bank, the central bank of Nepal, was established in 1956. Since then, many say, it has only been playing a subsidiary role of the government rather than an independent body.

 According to the Act, the central bank is an autonomous body. But there are governmental interference in administrative and even other small matters of bank.

 To discuss on issues related to this and others, Nepal-USA Chamber of Commerce and Industry with the support from World Bank organised a workshop on “Financial Sector Reform in Nepal : The Role of the Central Bank and Other Key Players” in Kathmandu last week.

 Experts, former governors of the Nepal Rastra Bank, economists, planners, member of parliament, bankers, journalists and private sector representatives spent a whole day discussing on the shortcomings of Nepal Rastra Bank, and key issues on financial sector reform. One of the major decisions reached by the gathering was that the central bank of the country was not exercising the autonomy and it needs to given full autonomy.

Respect to the autonomy and independence of central bank is a must, said Shovan D. Pant, General Manager of Nabil Bank Limited.

 “The first point that helps to strengthen the confidence of the central bank is to formulate effective regulations and enforce the regulations uniformly amongst all the players requires. For that the central bank should be made fully accountable and independent with proper mechanism of control and monitoring," said Pant. An environment should be developed so that central bank can function objectively with more confidence, respect and prestige,” he said.

 According to him, clarity in the role of the central bank and authority of the central bank are other major prerequisites for effective regulation and supervision of the financial system.

 “It is prerequisite to grant full internal autonomy without undue interference so that the bank could development and strengthen its ability to render appropriate and sound advice on economic matters," said former governor of the Bank and member of the Board of Directors, Ganesh Bahadur Thapa. Related  to it is the issue of appointment and dismissal of the Governor of the Bank and members of the Board of Directors, Thapa added.

 According to him, the Nepal Rastra Bank Act does not lay any specific criteria for professional competency, appropriate experience and background of the governors, deputy governors and members of the Board of Directors. They are appointed on the sole discretion of the government. Most notable is the provision for removal of these officials who can be removed any time as the Government may deem fit.

  “The quality and performance of the organisation is closely conditioned by the existing provisions of the law. A rethinking on them in the light of complexities arising out of the nature of work of the central bank seems to me the need of the hour,” said Thapa.