Can SWC Guide, Manage the NGOs?

-By B. M. Dahal

Social Welfare Council (SWC) observed its 20 years of establishment on Thursday by organising special function. The Council was formed as Social Service National Coordination Council in 2036 to coordinate the whole social service sector under an apex body. The Council officials claim that they have come a long way in the field of social service in the past two decades.

The Social Welfare Act ensures that it is the only umbrella body under which all non-governmental organisations (NGOs) and international non-governmental organisations (INGOs) have to carry out their activities in the field of social sector.

SWC is supposed not only to facilitate the NGOs and INGOs, but also monitor and guide them regularly. With a view to making the activities of social organisations more transparent and effective, the government has adopted a policy which makes it imperative for the social organisations to take permission from the SWC before entering into any agreement to receive funds from the foreign donor agencies or individuals.

After the political change of 1990, the government lifted the mandatory affiliation with the Council and many NGOs, formerly affiliated with the Council, snapped their ties. Now, almost half of the NGOs operating in the country do not come under the Council.

Again, different government bodies such as Foreign Ministry, Finance Ministry, Local Development Ministry, Forest Ministry, Health Ministry and others are said to be more than enthusiastic to make deals with the INGOs. They want such INGOs to work with them without being involved with the SWC.

Govind Prasad Adhikari, Chairman of Underprivileged Children’s Educational Programme (UCEP-Nepal), an NGO, says the Ministries themselves seem to be violating the SWC Act.

ÒThe Ministries make deals with the INGOs and launch projects. They do not even inform SWC about their agreement with the INGOs. This might have created difficulties for SWC to monitor the activities of INGOs and NGOs working in the country,Ó Adhikari says.

Besides, a large number of NGOs and INGOs have not been transparent in their activities and resources. Some of them are said to have been involved in promoting particular religions in the name of social service in the villages of Nepal. Many are believed to be working without registering with SWC and other bodies.

Sharad Sharma, chairman of Child NGO Federation and general secretary of Child Development Society (CDS), says that the intervention of the various Ministries has also weakened SWC to carry out its responsibilities effectively.

But Sharma also accuses SWC of being unable to take effective measures to monitor the activities and annual reports of income and expenditure of NGOs and INGOs.

ÒSWC should renew the registration of social organisations on the basis of their annual reports. Many of such organisations have not conducted general conferences for years.Ó

In order to check the misappropriation of funds by NGOs and INGOs, there should be a provision of the government’s auditor to audit the reports of those organisations that use more than Rs. one million annually, Sharma demands.

Sharma also says that SWC has, the funds to be distributed to NGOs under the NGO support programme, been distributing on the basis of political ideology. He says that SWC must make start distributing funds on the basis of the performance of NGOs.

He, however, appreciates the policy adopted by SWC to support children of the people, police and Maoists killed in the Maoist insurgency.

Jagadish Ghimire, an NGO activist, says that the government does not have a clear and effective type of policy on NGOs, which has hampered in their mobilisation.

Ghimire accepts that NGOs have also not been excellent in their performance.

ÒAs the people in the government and bureaucracy are not excellent, the same thing reflects in NGOs. In order to mobilise NGOs properly, the government must adopt appropriate policies,Ó he says.

A person being involved in a social organisation, requesting unanimity, informs that SWC has completed monitoring more than 74 INGOs out of the total 87 registered ones. The person says that an agriculture expert had evaluated a child-related NGO supported by an INGO in Kathmandu. He says that the persons entrusted with the responsibility of evaluating the performance of the INGOS and NGOs do not spend more than two hours to monitor their activities.

Dr. Tika Prasad Pokhrel, Member-Secretary of Social Welfare Council, refutes such things outright.

Dr. Pokhrel says that SWC has been making necessary efforts to systematize and manage the social sector.

ÒI am very much optimistic that we will be successful in the mission. We are bringing all the NGOs and INGOs under a certain framework to guide them. It is not so difficult task to manage them,Ó he says.

Dr. Pokhrel says that the SWC Act and the policies adopted by the government in the Ninth Plan are compatible to bring all the social organisations under the umbrella of SWC.

ÒOur Minister is convinced to bring them under SWC. But we are not getting necessary support from the administrative level. After we practically become an umbrella body of all social organisations, it will be easier for us to monitor them strongly,Ó he says.

Regarding some charges against SWC, Dr. Pokhrel says that SWC is always ready to make corrections in the activities if anybody comes up with evidences.

Ò We always welcome criticism. But criticism needs necessary evidences. The false charges will not be beneficial for anyone.

SAF Games And MICE Tourism

-By Rudra Prasad Sharma

Tourism in the 21st century will not be attributed as it was and ought to be as a mundane logistics supposes it to be done. In Nepal, there was a time when the travel trade sector was subsisting only by selling the image of Mt. Everest and the Himalayas. Tourism, in Nepal, still conjures trekking, rafting and little more. But, tourism is to be capitalized as a priority sector in the 21st century, it should be the time where MICE tourism will be flourishing. At this threshold, the 8th South Asian Federation Games (SAF) has come as an avenue to it.

Literally, MICE means Meeting, Incentive, Convention and Exhibition. As such, distinguished delegates and other guests visit for a special task and launch commentaries with the place and people of the destination. In spite of its sporadic nature, MICE tourism is very crucial for the promotion of global marketing. Like it is said ‘seeing is believing’ or the motto of journalism, ‘a photo is worth a thousand wordsÓ if a person happens to visit Nepal and sets eyes and ears, the effect will automatically be carried to his/her country.

To see the application of MICE tourism in Nepal, the King Birendra International Convention Centre, the formulation of Nepal Incentive and Convention Centre (NICA) three years ago and the relevant geographical and cultural ambiance come as fruition. During the 8th SAF Games, from 25th September to 4th October, thousands of delegates, players, journalists and spectators will be assembled in Kathmandu. If we could impart them a gay, pleasant and idyllic image of Nepal, our plea of ÒVisit NepalÓ will be thoroughly beheld in South Asia. That will be real marketing in the true sense.

At this, travel trade and sport enthusiasts have begun to come up and share views under the aegis of media. These running of the like-minded souls is laudable, but it still lacks substantiality.

In an interaction programme organized by the Everest Press Club, Nepal Narendra Bajracharya, the first vice president of Hotel Association of Nepal (HAN) viewed that the expenditure on MICE tourism which has been beneficial to the people patently or latently should be taken as investment.

Bajracharya added that regional basis is the only basis for viable promotion of tourism in Nepal. That’s why regional conventions like the SAF Games have paramount importance in the promotion of tourism in Nepal.

Similarly, Keshab Sthapit, Mayor of host city Kathmandu, recalling his experience as a former general secretary of the National Sports Council, remarked that politicos in Nepal still do not understand the importance of sports. He further evoked that Nepal could be fructified as a destination for MICE tourism. Regarding the problems of garbage and the mounds of trash on the eve of the SAF games Sthapit invoked that there should be no hurdles at political level to ease his mission to keep the city clean. Tek Bahadur Dangi, marketing manager of Nepal Tourism Board (NTB), noticed that even if the those coming by land is deducted, 32% of the total number of tourists come from India. It proves that regional perspective should be maintained in the promotion of tourism in Nepal.

In the same tune, Devendra Gautam, Acting president of Federation of Nepal Journalist Association, informed that the Federation had passed a resolution to make the 8th SAF game a success notwithstanding the lapses and shortcomings.

Addressing the same interaction Programme Minister for Sports Sarat Singh Bhandari opined that the politicos must have understood the importance of sports after the last election as they had to distribute balls and sports materials in the election campaign. Minister Bhandari added that HMG won’t lag behind to make SAF a grand success.

In fact, MICE market has become competitive in Asia, We have challenges especially from South East Asian countries like Indonesia and Thailand which may cater better facilities and infrastructures. However, for the fact that Nepal, the organiser of the First SAF Games in 1984, will galvanize the history of Nepalese sports by making the 8th SAF a grand success, and the SAF itself is MICE. We have not only tried and tested miscellaneous conventions like SAF but also have a successful history of hospitality business. Let’s hope that the 8th SAF Games, the last SAF games of this millennium, will be a milestone to promote MICE tourism in Nepal.

Action Plan To Protect Investors' Interests

-By Krishna Shrestha

Securities Board, Nepal has disclosed the Action Plan for the year 1999/2000 to implement the strategic plan already unveiled by the Board, said Dambar Prasad Dhungel, Chairman of the Board.

Securities Board, Nepal was established to promote and protect the interest of investors by regulating the securities market, and develop securities market in the country.

The Nepalese securities market has seen the mobilisation of an additional Rs. 1.5 billion of public money in the last five years. So, the investors’ interest needs to be protected, says Chairman Dhungel.

Though, the history of Nepalese stock market is more than six decades old with the flotation of the shares by Biratnagar Jute Mills Ltd. and Nepal Bank Ltd way back in 1937, the ‘open cry system’ in the stock market was started recently. The country had that system of stock market since only January 13, 1994, through the newly appointed brokers and market makers.

Since then, from the fiscal year 1993/94 to 1998/99, the number of listed companies in the stock market has increased from 66 to 108. The paid-up value of the listed companies has increased from Rs. 2.36 billion to Rs. 6.49 billion. Similarly, market capitalisation has increased from Rs. 14.97 billion to Rs. 23.51 billion. However, there is fluctuation in annual turn over.

To regulate the securities market, Securities Board has drafted a bill to amendment the Securities Exchange Act. It was expected that the bill would be presented in the current session of the parliament. But that did not happen. Securities Board officials hope that the bill would be presented in coming winter session of the parliament.

Dhungel is optimistic that the strategic plan followed by the action plan will help to improve the country’s securities market, which has performed below par as was expected by the planners as well as investors. Bank, finance and insurance companies occupy about 90 per cent of the total transaction.

The performance of the manufacturing and processing industries is so poor that majority of the listed companies are not in a position to any provide dividend to the investors.

Share prices of most of the manufacturing and processing industries have slide down. Some industries have even closed down. As the companies, with the exception of a few, have been unable giving dividend to investors, investors have loosed their confidence on security market.

According to Securities Board, there is a distinct lack of continuity in demand and supply of the securities because of the small size of the corporate sector.

Despite amendments in the Securities Exchange Act twice in the past, it still lacks some provisions that makes moving of the securities market smoothly and timely.

Some discrepancies seen in the existing act are: it does not fulfill the demand of foreign investors; the role and the right of the board are not clear in making entry and exit of additional entrepreneurs; it does not make investors’ access to the market easy among others. Another problem is the lack of rating of the institution, which can authoritatively shed some light on investment. Disclosure of information of the listed companies is the worst part in the securities market. Lacking of central depository system has delayed the process of security transaction.

According to the Securities Board, considering these and other issues, it has prepared strategic plan for the period of 1998 to 2002 and an action plan to execute the strategic plan.

Basically, we have focussed on institutional building of the board, market regulatory system, disclosure and financial reporting of the listed companies, and education, says Dhungel.

Accordingly, the Board is also working towards giving final shape to the draft bill for the new act on Securities and Exchange Act, draft new Security Exchange Regulation, draft Securities Investment Trust Regulation, recommend to the government to improve other legal provisions.

The Board will also initiate a study on corporate governance to review the present corporate governance practice in the Nepalese capital market and promote corporate governance scenario, develope uniform accounting standard for listed companies, develop efficient market information system, standardisation of continuous listing requirements and upgrading settlement issues.

Similarly, the Board plans to work in co-ordination with the Nepal Rastra Bank and Nepal Stock Exchange Ltd on the possibility of establishing a Securities Investor Protection Fund, study the possibility of introducing an Over-the- counter-exchange-system, develope SEBO/Ns competency as regulator and market developer, develope effective monitoring and surveillance system, developing effective compliance system amongh others.

The objectives of the Strategic Plan of Securities Board are as follows:

- Gain confidence of the participants through the development of proper laws and regulation and their effective enforcement and encouraging self-compliance.

- Promote competition among market practitioners on a level playing field and minimise undue restrictions in the entry and exit.

- Ensure asset prices reflect market information and market operations run smoothly.

- Transparent regulation and timely dissemination of market information.

- Ensure high professional standards from market participants.

- Characterised by active participants and higher liquidity.

- To effectively effectively with the non-securities segment and gradually develop to compete for global capital.

For this, policies of improvement in the statutory and regulatory framework of the capital market, development of market standard and information system, development of widely participated capital market and improvement in the Securities Board’s institutional capacity will be followed.

Meanwhile, the government has announced certain measures for improvement of the capital market of the country.

The budget for the fiscal year 1999/2000, has stated: The legal and institutional framework will be developed to enforce the code of conduct for the management and smooth functioning of the entities involved in raising funds from the capital markets. The accounting systems currently adopted by the organised sector will be designed to meet international standards and the security markets will be made more transparent and trustworthy. The necessary legal arrangements will be made in the securities deposit systems for immediate liquidity in the security transactions of the operation and management of transfer of the securities dealings. The preparatory works will be carried out to allow international accounting and auditing firms to operate their activities in Nepal by opening their offices locally.

The Ninth Plan (1997-2002) has also stated: Nepalese capital market will be comparable to other emerging capital markets of the world by the end of the Ninth Plan with the development and expansion of mutual fund, venture capital fund, individual portfolio management, securitisation capital market support services, etc.