June 17
Govt proposes revised rebidding to ADB (eKantipur.com)
Manakamana Cable car: country's pride (eKantipur.com)
Nepal bags Destination Travel Award from ITE HK (Nepalbiznews.com)
June 18
Pashmina suffers identity crisis after years of trade (eKantipur.com)
NAC cancels bid for Boeing lease (eKantipur.com)
Farmers demand 11 tea refineries in Ilam (eKantipur.com)
Private dairies flay DDC over milk price (eKantipur.com)
Declare tourism industry as a national industry: NATO (Nepalbiznews.com)
Entrepreneurs urge for Nepali products’ logo (Nepalbiznews.com)
Minister Yami intent on appeasing ADB, says govt. would fulfill all its conditions
June 19
Nepal Samachar- patra suspends publication (eKantipur.com)
Depreciating dollar hits remittance, exports (eKantipur.com)
Private airlines to build hangars at TIA (eKantipur.com)
NPC prepares interim plan (Nepalnews.com)
June 20
Yami's ambitious infrastructure plan (eKantipur.com)
Govt to ask ADB to extend Melamchi loan (eKantipur.com)
Additional state support for Nepali workers soon (eKantipur.com)
Govt approves SEZ Act (eKantipur.com)
Is the stock market awaiting meltdown? (eKantipur.com)
Parliament asked to investigate loan defaulters (eKantipur.com)
‘Involve private sector in infrastructure’ (eKantipur.com)
June 21
Nepali firms to go multinational (eKantipur.com)
ADB extending Melamchi loan (eKantipur.com)
$169,000 aid for micro hydro project (eKantipur.com)
Nepal to sign labor pact with Malaysia, UAE (eKantipur.com)
Biratnagar customs take improves (eKantipur.com)
Germany to provide €22m grant for health and energy sectors (Nepalbiznews.com)
June 22
Interim Plan to invest Rs 587 billion (ekantipur.com)
Deposit collection soars by 10 pc (ekantipur.com)
Cabinet endorses NT's 15 pc divestment plan (ekantipur.com)
June 23
DDC asked to raise prices, Govt for single price of milk (ekantipur.com)
Govt agrees to hike salary of employees (Nepalbiznews.com)
(Nepalnews.com)
Sunday, June 24, 2007
Deposit collection soars by 10 percent
Deposit collection soars by 10 percent
eKantipur.com, 22-Jun-2007
Total deposits at the banking sector grew by over 10 percent during the first nine months of the current fiscal year as remittance inflow continued to flood the banks.
The data of Nepal Rastra Bank shows that the total deposits stood at Rs 321 billion by mid-April, up from Rs 291 billion in last mid-July.
Flushed with money caused by healthy inflow of remittance, more people are saving money in banks, bankers said. Besides, tough competition among banks to lure depositors by reducing the cost for opening accounts also helped to expand people's access to financial services, they said.
Terming the growth as normal, Sashin Joshi, chief executive officer of NIC Bank, said banks are setting up new branches even outside the Kathmandu Valley. “In addition, more people have put their money in financial institutions due to perceived security problem at home,” he said.
Of the total deposits, Rs 39.8 billion was kept in current account while Rs 166.2 billion was deposited in savings account. Likewise, 30 billion rupees was saved in fixed deposit.
During the period, the banks reported an impressive growth of over 27 percent in loan extensions. They gave loans amounting to Rs 221 billion by mid-April, compared to Rs 173 billion in last mid-July.
Almost all loans went for the private sector. Banks issued loans amounting to Rs 214 billion to private parties. Loans extended against government-owned enterprises fell by around 22 percent to almost seven billion rupees, down from Rs 9.21 billion.
Bankers said despite the end of armed conflict, industrial sector has not revived. “Demand for loans for this sector has not gone up considerably. Still, banks are managing their deposits and investing on retail lending more aggressively,” said a banker.
The investment of commercial banks on government securities was almost same at around Rs 57 billion during the period.
On the account of steady rise in deposit mobilization, total liquidity at the banking sector increased by 22.93 percent. The liquidity that was Rs 38.8 billion rupees in the beginning of the current fiscal year reached Rs 47.7 billion by the mid-April.
In order to reduce liquidity, the bankers said, mega projects should come into operation.
eKantipur.com, 22-Jun-2007
Total deposits at the banking sector grew by over 10 percent during the first nine months of the current fiscal year as remittance inflow continued to flood the banks.
The data of Nepal Rastra Bank shows that the total deposits stood at Rs 321 billion by mid-April, up from Rs 291 billion in last mid-July.
Flushed with money caused by healthy inflow of remittance, more people are saving money in banks, bankers said. Besides, tough competition among banks to lure depositors by reducing the cost for opening accounts also helped to expand people's access to financial services, they said.
Terming the growth as normal, Sashin Joshi, chief executive officer of NIC Bank, said banks are setting up new branches even outside the Kathmandu Valley. “In addition, more people have put their money in financial institutions due to perceived security problem at home,” he said.
Of the total deposits, Rs 39.8 billion was kept in current account while Rs 166.2 billion was deposited in savings account. Likewise, 30 billion rupees was saved in fixed deposit.
During the period, the banks reported an impressive growth of over 27 percent in loan extensions. They gave loans amounting to Rs 221 billion by mid-April, compared to Rs 173 billion in last mid-July.
Almost all loans went for the private sector. Banks issued loans amounting to Rs 214 billion to private parties. Loans extended against government-owned enterprises fell by around 22 percent to almost seven billion rupees, down from Rs 9.21 billion.
Bankers said despite the end of armed conflict, industrial sector has not revived. “Demand for loans for this sector has not gone up considerably. Still, banks are managing their deposits and investing on retail lending more aggressively,” said a banker.
The investment of commercial banks on government securities was almost same at around Rs 57 billion during the period.
On the account of steady rise in deposit mobilization, total liquidity at the banking sector increased by 22.93 percent. The liquidity that was Rs 38.8 billion rupees in the beginning of the current fiscal year reached Rs 47.7 billion by the mid-April.
In order to reduce liquidity, the bankers said, mega projects should come into operation.
Nepali firms to go multinational
Nepali firms to go multinational
eKantipur.com, 21-Jun-2007
Now is the time for established domestic companies to think of going multinational. If things go according to plan, the over four-decade long restriction on Nepali investors to invest abroad will be lifted within a month, paving the way for Nepali entrepreneurs to go multinational.
According to an official at the Finance Ministry, the government is in the final stages of amending the Ban on Nepali Investment in Foreign Countries 2021 Act, as per the long-standing demands of some potential Nepali businessmen willing to invest abroad. The government is attempting to bring policy level changes in the upcoming budget for fiscal year 2007/08.
Industrial experts and government officials say that well-established domestic service-based industries, like the food industry, have shown strong interest to expand their bases in foreign countries.
"We believe the food industry, particularly instant noodles, established-restaurant chains and cable transporters can reap benefits by going multinational once the ban is lifted," said a high-ranking official.
Finance Minister Dr Ram Sharan Mahat acknowledged the development and said that demand for lifting the ban is high from Nepali business community. "The government is positive on allowing Nepali companies to invest in foreign countries, but it will come with conditions," Dr Mahat said.
The official said the government is thinking on three ways to allow Nepali investors to invest abroad. First is through creating a mutual fund, established by financially sound banks with its majority equity participation. Organized investors, including individuals can participate in the fund by purchasing units of the fund.
Second is by allowing investments of Nepali companies through transfer of technology while the third way is by permitting Nepal-based holding companies to establish their subsidiaries in foreign lands.
eKantipur.com, 21-Jun-2007
Now is the time for established domestic companies to think of going multinational. If things go according to plan, the over four-decade long restriction on Nepali investors to invest abroad will be lifted within a month, paving the way for Nepali entrepreneurs to go multinational.
According to an official at the Finance Ministry, the government is in the final stages of amending the Ban on Nepali Investment in Foreign Countries 2021 Act, as per the long-standing demands of some potential Nepali businessmen willing to invest abroad. The government is attempting to bring policy level changes in the upcoming budget for fiscal year 2007/08.
Industrial experts and government officials say that well-established domestic service-based industries, like the food industry, have shown strong interest to expand their bases in foreign countries.
"We believe the food industry, particularly instant noodles, established-restaurant chains and cable transporters can reap benefits by going multinational once the ban is lifted," said a high-ranking official.
Finance Minister Dr Ram Sharan Mahat acknowledged the development and said that demand for lifting the ban is high from Nepali business community. "The government is positive on allowing Nepali companies to invest in foreign countries, but it will come with conditions," Dr Mahat said.
The official said the government is thinking on three ways to allow Nepali investors to invest abroad. First is through creating a mutual fund, established by financially sound banks with its majority equity participation. Organized investors, including individuals can participate in the fund by purchasing units of the fund.
Second is by allowing investments of Nepali companies through transfer of technology while the third way is by permitting Nepal-based holding companies to establish their subsidiaries in foreign lands.
Govt approves SEZ Act
Govt approves SEZ Act
eKantipur.com, 20-Jun-2007
BY MILAN MANI SHARMA
After years of debate, the government has finally endorsed the Special Economic Zone (SEZ) Act, incorporating better tax incentives and flexible labor provisions for entrepreneurs in the zone.
The Act would soon be forwarded to the House of Representatives for enactment, said acting Industry Secretary Purushottam Ojha.
Referring to provisions of the Act, Ojha told the Post that it upholds three broader principles: incentives to industries, one-spot service and labor flexibility.
The Act treats SEZ as a land where other domestic laws related to labor and industries would not be applicable. It has mooted an autonomous SEZ Authority to oversee its operations.
The Act, however, is still weak on labor related provisions, said officials involved in the formulation of Act, adding that provisions to tighten 'labor indiscipline' proposed initially has been diluted in the approved Act.
Nevertheless, while allowing workers to unite and practice collective bargaining, it prohibits workers from undertaking activities that affect production and normal operations of industries.
The Act allows entrepreneurs to hire workers on contract basis. “Terms of recruitment, facilities and lay off would be governed by the agreement the worker and management would sign while accepting the job.”
Initially, officials had pushed for 'hire and fire' provision as demanded by entrepreneurs.
The Act says that facilities for workers in the SEZ should be better than what workers receive outside of the zone. “SEZ Authority will see that workers pay scale, medical and insurance facilities are better than others,” reads the Act.
In order to lure investors in SEZ, the government has decided to provide them with facilities such as duty-free import of raw materials, exemption of value added tax (VAT) and free them from excise duty and other local taxes.
“The industries in SEZ will be provided with income tax holiday for five years,” says the Act. After five years also, they would be provided with 50 percent discount on income tax.
In order to ensure investment guarantee, the Act says industries already into operation would continue to enjoy all the facilities, even if later amendments changed the structure and extent of facilities.
Going by the Act, only export-oriented industries can be set up in SEZ. Nevertheless the government has allowed them to make domestic sales not exceeding 15 percent of their transactions.
SEZ Authority, to be led by an independent expert, would initially lease the land in SEZ for 30 years. Also, 50 percent, 40 percent and 25 percent discounts will be provided on lease rent for the first three years of investment. After 30 years, lease agreement can be renewed in every 5 years.
The Act has asked SEZ Authority to provide one-spot services so that foreign and domestic investors would not have to take the trouble of approaching different government offices.
The vision of the Act is to provide services like visa, visa renewal, logistics and other facilities through a special office of SEZ Authority.
eKantipur.com, 20-Jun-2007
BY MILAN MANI SHARMA
After years of debate, the government has finally endorsed the Special Economic Zone (SEZ) Act, incorporating better tax incentives and flexible labor provisions for entrepreneurs in the zone.
The Act would soon be forwarded to the House of Representatives for enactment, said acting Industry Secretary Purushottam Ojha.
Referring to provisions of the Act, Ojha told the Post that it upholds three broader principles: incentives to industries, one-spot service and labor flexibility.
The Act treats SEZ as a land where other domestic laws related to labor and industries would not be applicable. It has mooted an autonomous SEZ Authority to oversee its operations.
The Act, however, is still weak on labor related provisions, said officials involved in the formulation of Act, adding that provisions to tighten 'labor indiscipline' proposed initially has been diluted in the approved Act.
Nevertheless, while allowing workers to unite and practice collective bargaining, it prohibits workers from undertaking activities that affect production and normal operations of industries.
The Act allows entrepreneurs to hire workers on contract basis. “Terms of recruitment, facilities and lay off would be governed by the agreement the worker and management would sign while accepting the job.”
Initially, officials had pushed for 'hire and fire' provision as demanded by entrepreneurs.
The Act says that facilities for workers in the SEZ should be better than what workers receive outside of the zone. “SEZ Authority will see that workers pay scale, medical and insurance facilities are better than others,” reads the Act.
In order to lure investors in SEZ, the government has decided to provide them with facilities such as duty-free import of raw materials, exemption of value added tax (VAT) and free them from excise duty and other local taxes.
“The industries in SEZ will be provided with income tax holiday for five years,” says the Act. After five years also, they would be provided with 50 percent discount on income tax.
In order to ensure investment guarantee, the Act says industries already into operation would continue to enjoy all the facilities, even if later amendments changed the structure and extent of facilities.
Going by the Act, only export-oriented industries can be set up in SEZ. Nevertheless the government has allowed them to make domestic sales not exceeding 15 percent of their transactions.
SEZ Authority, to be led by an independent expert, would initially lease the land in SEZ for 30 years. Also, 50 percent, 40 percent and 25 percent discounts will be provided on lease rent for the first three years of investment. After 30 years, lease agreement can be renewed in every 5 years.
The Act has asked SEZ Authority to provide one-spot services so that foreign and domestic investors would not have to take the trouble of approaching different government offices.
The vision of the Act is to provide services like visa, visa renewal, logistics and other facilities through a special office of SEZ Authority.
Pashmina suffers identity crisis after years of trade
Pashmina suffers identity crisis after years of trade
eKantipur.com, 18-Jun-2007
POST REPORT
In a major blow, key pashmina importing countries, after accepting the product for years, have suddenly restricted its import demanding definition of the product.
Japan has barred import of pashmina items from Nepal from last week, saying that the products lack specific definition on content, texture and usage.
“As a result, the export of the product has come to a grinding halt from the last five days,” said Durga Bikram Thapa, general secretary of Nepal Pashmina Industries Association.
Likewise, Italy and Spain -- key markets of Nepali pashmina items in Europe -- have also warned of imposing ban on its import unless the manufacturers define the product.
“Both the countries have clearly said they will ban pashmina import from 2008 if Nepal failed to define it,” Thapa said.
Given the trend, exporters said the product, on which Nepal takes pride of enjoying a special advantage in the international market, could face similar problem in other European countries as well. Japan is the sixth largest importer of Nepali pashmina. Italy is also the third largest buyer among European countries.
The problem has added woes to the industry -- the third largest export industry of the country -- already suffering from a constant drop in exports over the years.
The problem emerged mainly because exporters from China, India and even Nepal have been exporting the items with widely varying quality and texture as 'pashmina' items, said Thapa.
It has come suddenly, but it is not unexpected, manufacturers said. Even though the manufacturers ever took pride over pashmina items carving a niche market, they never took serious initiatives to define and brand the items.
The product had faced hitch in past while seeking facility of Generalized System of Preference (GSP) in the European market.
Likewise, the industry had failed to secure its markets when Indian and other manufacturers marketed similar items under the name of pashmina.
So far, India's definition of Cashmere was widely accepted for the trade of pashmina and importers take the Nepali items as variation of the same category. As a result, the manufacturers and exporters, barring a few, never worked seriously to define and label the product.
“Now time has come for us to act urgently,” said Thapa Monday, seeking government's support in defining and branding the Nepali pashmina.
At an interaction program on “Export Sector Problems and Challenges”, he even suggested the carpet exporters to brand Nepali hand knotted woolen carpet.
Addressing the business community, acting Commerce Secretary Purushottam Ojha said that Ministry of Industry, Commerce and Supplies has presently assigned Department of Cottage and Small Industries to work on branding Nepali export items.
Businesspersons earlier sought the government to formulate a separate export policy to deal with the problems facing the sector. They even asked the government to contribute in export promotion, among others.
eKantipur.com, 18-Jun-2007
POST REPORT
In a major blow, key pashmina importing countries, after accepting the product for years, have suddenly restricted its import demanding definition of the product.
Japan has barred import of pashmina items from Nepal from last week, saying that the products lack specific definition on content, texture and usage.
“As a result, the export of the product has come to a grinding halt from the last five days,” said Durga Bikram Thapa, general secretary of Nepal Pashmina Industries Association.
Likewise, Italy and Spain -- key markets of Nepali pashmina items in Europe -- have also warned of imposing ban on its import unless the manufacturers define the product.
“Both the countries have clearly said they will ban pashmina import from 2008 if Nepal failed to define it,” Thapa said.
Given the trend, exporters said the product, on which Nepal takes pride of enjoying a special advantage in the international market, could face similar problem in other European countries as well. Japan is the sixth largest importer of Nepali pashmina. Italy is also the third largest buyer among European countries.
The problem has added woes to the industry -- the third largest export industry of the country -- already suffering from a constant drop in exports over the years.
The problem emerged mainly because exporters from China, India and even Nepal have been exporting the items with widely varying quality and texture as 'pashmina' items, said Thapa.
It has come suddenly, but it is not unexpected, manufacturers said. Even though the manufacturers ever took pride over pashmina items carving a niche market, they never took serious initiatives to define and brand the items.
The product had faced hitch in past while seeking facility of Generalized System of Preference (GSP) in the European market.
Likewise, the industry had failed to secure its markets when Indian and other manufacturers marketed similar items under the name of pashmina.
So far, India's definition of Cashmere was widely accepted for the trade of pashmina and importers take the Nepali items as variation of the same category. As a result, the manufacturers and exporters, barring a few, never worked seriously to define and label the product.
“Now time has come for us to act urgently,” said Thapa Monday, seeking government's support in defining and branding the Nepali pashmina.
At an interaction program on “Export Sector Problems and Challenges”, he even suggested the carpet exporters to brand Nepali hand knotted woolen carpet.
Addressing the business community, acting Commerce Secretary Purushottam Ojha said that Ministry of Industry, Commerce and Supplies has presently assigned Department of Cottage and Small Industries to work on branding Nepali export items.
Businesspersons earlier sought the government to formulate a separate export policy to deal with the problems facing the sector. They even asked the government to contribute in export promotion, among others.
Manakamana Cable car: country's pride
Manakamana Cable car: country's pride
eKantipur.com, 17-Jun-2007
In a mountainous country like Nepal, where a large chunk of people is yet to be linked to road network, Manakamana Cable Car has demonstrated how establishment of a cable transport link can facelift economy and social wellbeing of a community.
Over the period of about eight years, the Cable Car has not only facilitated travelers and increased flow of people to Manakamana - of the most famous the pilgrimage sites, it has also created market, enhanced trade and enabled local people secure good income returns. Most importantly, it has demonstrated cable cars can be an effective transportation alternative in the country, where difficult terrain stands a major impediment to extending road transportations.
All the success stories Manakamana Cable Car boasts today, however, have emerged from a meager start, an ambitious plan and a vision of its promoter. Manakamana Darshan Private Limited (MDPL), the operator of cable car was established in 1998 with an objective to provide clean, safe and convenient means of transportation for the pilgrims and visitors wanting to go to Manakamana. The total investment of the project was Rs 500 million.
What inspired the promoters to venture into such an expensive project? Manakamana was already one of the most visited pilgrimage sites. Owing to distance and difficult trail, many others who wished to visit the place were unable to visit the hilltop holy temple due to a difficult four-hour trek. So, the scope of business was already there, says its officials.
"When people had no alternative than to walk, 50,000 visitors used to visit the place per year," said Manoj Manandhar, sales and marketing manager of Manakamana Darshan.
With the start of the service, promoters knew they could easily raise the number of visitors by at least two-fold and soon they realized they were not wrong. Today, more than 400,000 visitors travel to Manakamana on cable car every year.
The service not only shortened the journey to the religious hot spot, but also generated ample of self-employment and business opportunities for people residing around, giving a complete facelift to the local economy.
Due to influx of huge number of people, a considerable number of restaurants, souvenir shops and resorts have come into operation in the place, which in turn has provided employment to many locals and increased their income level.
According to the company, around 1,200 people visit Manakamana via the cable car every day. "Even if each of these people spends Rs 50, the business transaction in the local economy would reach Rs 600,000 per day, which is a considerable amount," said Manandhar. Besides, the local farm produces, especially oranges, which earlier used to be wasted, now are sold at better prices, generating handsome returns to farmers. And, the locals who were required to walk up or down during emergencies now have access to advanced mode of transportation. This has increased their access to urban areas.
Statistics of the company shows that the cable car ferried a total of 2.935 million people to Manakamana till the end of last fiscal year. Of that, 446,102 traveled in the year 2005/06 alone.
The company has so far generated revenue of Rs 737.4 million, of which Rs 705.4 million was generated from the operation of the cable car, one million from cargo service, Rs 6.3 million from parking facilities, Rs 4.14 million from sales of souvenir and Rs 20.5 million from restaurant business.
"With the restoration of peace, we believe more people will use the cable car," Manandhar said. The cable car company has also made numerous endeavors to establish itself as a responsible to corporate house accountable to the surrounding communities in operates in.
"To meet that end, we are giving huge discounts on cable car fares to locals of Manakamana VDC and Darhechowk VDC," Manandhar said. As per the agreement, people residing in those two VDCs do not have to pay more than Rs 65 to travel on the cable car.
The company also gives grants of Rs 500,000 to Manakamana VDC and Rs 250,000 to Darhechowk VDC every year. Moreover, it has made sure that 90 percent of the total 110 staffs are locals.
"Besides, we have also teamed up with locals and Manakamana Development Committee to promote historical sites such as Bakreshwor Mahadev and Lakhan Thapa Cave, located in the vicinity of Manakamana temple." The company feels that it would be able to give more to the local communities, if locals there take more concrete initiatives to develop Manakamana as a tourist spot.
"Currently, most of the visitors are pilgrims, who visit the place for short period of time, i.e. couple of hours. But, if we can develop it as a tourist spot, more people would come to the place to spend their vacation. If their length of stay increases, their spending would also increase. This will ultimately open new avenues for locals planning to do business and further keep the local economy robust," Manandhar said.
eKantipur.com, 17-Jun-2007
In a mountainous country like Nepal, where a large chunk of people is yet to be linked to road network, Manakamana Cable Car has demonstrated how establishment of a cable transport link can facelift economy and social wellbeing of a community.
Over the period of about eight years, the Cable Car has not only facilitated travelers and increased flow of people to Manakamana - of the most famous the pilgrimage sites, it has also created market, enhanced trade and enabled local people secure good income returns. Most importantly, it has demonstrated cable cars can be an effective transportation alternative in the country, where difficult terrain stands a major impediment to extending road transportations.
All the success stories Manakamana Cable Car boasts today, however, have emerged from a meager start, an ambitious plan and a vision of its promoter. Manakamana Darshan Private Limited (MDPL), the operator of cable car was established in 1998 with an objective to provide clean, safe and convenient means of transportation for the pilgrims and visitors wanting to go to Manakamana. The total investment of the project was Rs 500 million.
What inspired the promoters to venture into such an expensive project? Manakamana was already one of the most visited pilgrimage sites. Owing to distance and difficult trail, many others who wished to visit the place were unable to visit the hilltop holy temple due to a difficult four-hour trek. So, the scope of business was already there, says its officials.
"When people had no alternative than to walk, 50,000 visitors used to visit the place per year," said Manoj Manandhar, sales and marketing manager of Manakamana Darshan.
With the start of the service, promoters knew they could easily raise the number of visitors by at least two-fold and soon they realized they were not wrong. Today, more than 400,000 visitors travel to Manakamana on cable car every year.
The service not only shortened the journey to the religious hot spot, but also generated ample of self-employment and business opportunities for people residing around, giving a complete facelift to the local economy.
Due to influx of huge number of people, a considerable number of restaurants, souvenir shops and resorts have come into operation in the place, which in turn has provided employment to many locals and increased their income level.
According to the company, around 1,200 people visit Manakamana via the cable car every day. "Even if each of these people spends Rs 50, the business transaction in the local economy would reach Rs 600,000 per day, which is a considerable amount," said Manandhar. Besides, the local farm produces, especially oranges, which earlier used to be wasted, now are sold at better prices, generating handsome returns to farmers. And, the locals who were required to walk up or down during emergencies now have access to advanced mode of transportation. This has increased their access to urban areas.
Statistics of the company shows that the cable car ferried a total of 2.935 million people to Manakamana till the end of last fiscal year. Of that, 446,102 traveled in the year 2005/06 alone.
The company has so far generated revenue of Rs 737.4 million, of which Rs 705.4 million was generated from the operation of the cable car, one million from cargo service, Rs 6.3 million from parking facilities, Rs 4.14 million from sales of souvenir and Rs 20.5 million from restaurant business.
"With the restoration of peace, we believe more people will use the cable car," Manandhar said. The cable car company has also made numerous endeavors to establish itself as a responsible to corporate house accountable to the surrounding communities in operates in.
"To meet that end, we are giving huge discounts on cable car fares to locals of Manakamana VDC and Darhechowk VDC," Manandhar said. As per the agreement, people residing in those two VDCs do not have to pay more than Rs 65 to travel on the cable car.
The company also gives grants of Rs 500,000 to Manakamana VDC and Rs 250,000 to Darhechowk VDC every year. Moreover, it has made sure that 90 percent of the total 110 staffs are locals.
"Besides, we have also teamed up with locals and Manakamana Development Committee to promote historical sites such as Bakreshwor Mahadev and Lakhan Thapa Cave, located in the vicinity of Manakamana temple." The company feels that it would be able to give more to the local communities, if locals there take more concrete initiatives to develop Manakamana as a tourist spot.
"Currently, most of the visitors are pilgrims, who visit the place for short period of time, i.e. couple of hours. But, if we can develop it as a tourist spot, more people would come to the place to spend their vacation. If their length of stay increases, their spending would also increase. This will ultimately open new avenues for locals planning to do business and further keep the local economy robust," Manandhar said.
Sunday, June 17, 2007
Roundup of Economic & Business News (Jun 9 - Jun 16)
June 9
Nepal Federation of Indigenous Nationalities (NEFIN) calls off banda (eKantipur.com)
Stock brokers: Making hay while sun shines (eKantipur.com)
NEPSE posts impressive growth (eKantipur.com)
Hetauda Cement Factory (HCF) resumed production (eKantipur.com)
Inland Revenue Office (IRO) to miss revenue target (eKantipur.com)
June 10
Interview - Jhapat Vohra, Chairman&MD, Malika Development Bank (eKantipur.com)
NIBL opens 16th branch, DCBL opens 2nd branch, Kumari Bank opens 8th branch
Trade deficit continuous to widen: NRB (Nepalbiznews.com)
Labour MoU with UAE to be signed in July (Nepalnews.com)
June 11
Notification delay stalls camouflage cloth import (eKantipur.com)
JTMM-Goit seizes 435 bighas of land in Saptari (Nepalnews.com)
June 12
GDP per capita up 8.8pc (eKantipur.com)
NAC cancels engine overhaul tender (eKantipur.com)
Nepal pushes for trade preference in China (eKantipur.com)
Another industry packs up (eKantipur.com)
Paradise-II colony under development, IME completes 5 years (eKantipur.com)
Strike by landless people partially affects life (Nepalbiznews.com)
Remittance growth plummets (Nepalnews.com)
June 13
‘Company Act to be revised soon’ (eKantipur.com)
Airfares on Ktm-Delhi route up (eKantipur.com)
Govt appoints Poverty Alleviation Fund (PAF) board members (eKantipur.com)
June 14
ADB positive on Melamchi, Asks govt to suggest options (eKantipur.com)
15m euros EU aid for renewable energy (eKantipur.com)
Stock market plummets (eKantipur.com)
IMF to disburse US$ 16m under PRGF (eKantipur.com)
June 15
Locals encircle Marsyangdi hydro (eKantipur.com)
National park revenues dwindle (eKantipur.com)
Unregistered drugs continue to flood market (eKantipur.com)
June 16
NEA's unpaid account rises to Rs 780 million (eKantipur.com)
Nepse scales to 15.89 points (Nepalbiznews.com)
(eKantipur.com)
Nepal Federation of Indigenous Nationalities (NEFIN) calls off banda (eKantipur.com)
Stock brokers: Making hay while sun shines (eKantipur.com)
NEPSE posts impressive growth (eKantipur.com)
Hetauda Cement Factory (HCF) resumed production (eKantipur.com)
Inland Revenue Office (IRO) to miss revenue target (eKantipur.com)
June 10
Interview - Jhapat Vohra, Chairman&MD, Malika Development Bank (eKantipur.com)
NIBL opens 16th branch, DCBL opens 2nd branch, Kumari Bank opens 8th branch
Trade deficit continuous to widen: NRB (Nepalbiznews.com)
Labour MoU with UAE to be signed in July (Nepalnews.com)
June 11
Notification delay stalls camouflage cloth import (eKantipur.com)
JTMM-Goit seizes 435 bighas of land in Saptari (Nepalnews.com)
June 12
GDP per capita up 8.8pc (eKantipur.com)
NAC cancels engine overhaul tender (eKantipur.com)
Nepal pushes for trade preference in China (eKantipur.com)
Another industry packs up (eKantipur.com)
Paradise-II colony under development, IME completes 5 years (eKantipur.com)
Strike by landless people partially affects life (Nepalbiznews.com)
Remittance growth plummets (Nepalnews.com)
June 13
‘Company Act to be revised soon’ (eKantipur.com)
Airfares on Ktm-Delhi route up (eKantipur.com)
Govt appoints Poverty Alleviation Fund (PAF) board members (eKantipur.com)
June 14
ADB positive on Melamchi, Asks govt to suggest options (eKantipur.com)
15m euros EU aid for renewable energy (eKantipur.com)
Stock market plummets (eKantipur.com)
IMF to disburse US$ 16m under PRGF (eKantipur.com)
June 15
Locals encircle Marsyangdi hydro (eKantipur.com)
National park revenues dwindle (eKantipur.com)
Unregistered drugs continue to flood market (eKantipur.com)
June 16
NEA's unpaid account rises to Rs 780 million (eKantipur.com)
Nepse scales to 15.89 points (Nepalbiznews.com)
(eKantipur.com)
NEA's unpaid account rises to Rs 780 million
NEA's unpaid account rises to Rs 780 million
eKantipur.com, 16-Jun-2007
Eastern regional office of Nepal Electricity Authority (NEA) has over Rs 780 million to collect from its clients. Of the total dues, it has accounted over Rs 40 million as bad debt, as those belong to clients who have refused to pay and have been blacklisted.
Defaulters of NEA's book of accounts include municipalities of the region, village development committees, government offices, industries, trading houses and household clients.
According to Tanka Prasad Shrestha, assistant director of NEA, the bulkiest unsettled account stands for electricity consumed by streetlights in municipalities and VDCs.
“Municipalities of 13 districts of the eastern region alone have Rs 288.61 million to pay to the NEA,” Shrestha told the Post.
Officials at the NEA regional office said that arrears of local bodies have shot up mainly because they have not been clearing bills fearing it would impact their budget. In fact, they have repeatedly refused to verify the volume of electricity consumed by them.
“Municipality officials do not respond to our request to conduct verification of bills generated from street lights,” said Shrestha, adding that lack of formal ownership of those bills by the municipalities have affected NEA in its endeavor to collect the bill amount.
Under the existing system, local bodies need to settle bills of street lamps. In case they cannot do so, they have to verify the bills, certifying that those were generated by street lamps, to pave way for the NEA to approach the Ministry of Local Development for payment
In latter mode of payment, the Ministry deducts the payment amount from the budget allocated to local bodies. As that reduces the budget the local bodies would receive, municipality officials have been avoiding verification of NEA bills.
The system of verification is followed because most of the street lamps do not have meters.
Very recently, Udaypur and Ilam municipalities have agreed for the verification, said Shrestha. According to NEA records, Ilam has unsettled bills worth Rs 3.63 million and Udaypur has dues totaling to Rs 815,000. The largest defaulter of NEA bills in the region is Biratnagar sub-metropolis. It owes Rs 68.39 to NEA. Rajbiraj has unpaid due of Rs 42.12 million, Itahari - Rs 48.74 million, Lahan - Rs 50.37 million and Dharan - Rs 24.68 million.
Likewise, Siraha has to pay Rs 14.72 million, Duhabi - Rs 11.66 million, Bhadrapur - Rs 17.25 million, Damak - Rs 4.01 million and Dhankuta - Rs 2.17 million.
eKantipur.com, 16-Jun-2007
Eastern regional office of Nepal Electricity Authority (NEA) has over Rs 780 million to collect from its clients. Of the total dues, it has accounted over Rs 40 million as bad debt, as those belong to clients who have refused to pay and have been blacklisted.
Defaulters of NEA's book of accounts include municipalities of the region, village development committees, government offices, industries, trading houses and household clients.
According to Tanka Prasad Shrestha, assistant director of NEA, the bulkiest unsettled account stands for electricity consumed by streetlights in municipalities and VDCs.
“Municipalities of 13 districts of the eastern region alone have Rs 288.61 million to pay to the NEA,” Shrestha told the Post.
Officials at the NEA regional office said that arrears of local bodies have shot up mainly because they have not been clearing bills fearing it would impact their budget. In fact, they have repeatedly refused to verify the volume of electricity consumed by them.
“Municipality officials do not respond to our request to conduct verification of bills generated from street lights,” said Shrestha, adding that lack of formal ownership of those bills by the municipalities have affected NEA in its endeavor to collect the bill amount.
Under the existing system, local bodies need to settle bills of street lamps. In case they cannot do so, they have to verify the bills, certifying that those were generated by street lamps, to pave way for the NEA to approach the Ministry of Local Development for payment
In latter mode of payment, the Ministry deducts the payment amount from the budget allocated to local bodies. As that reduces the budget the local bodies would receive, municipality officials have been avoiding verification of NEA bills.
The system of verification is followed because most of the street lamps do not have meters.
Very recently, Udaypur and Ilam municipalities have agreed for the verification, said Shrestha. According to NEA records, Ilam has unsettled bills worth Rs 3.63 million and Udaypur has dues totaling to Rs 815,000. The largest defaulter of NEA bills in the region is Biratnagar sub-metropolis. It owes Rs 68.39 to NEA. Rajbiraj has unpaid due of Rs 42.12 million, Itahari - Rs 48.74 million, Lahan - Rs 50.37 million and Dharan - Rs 24.68 million.
Likewise, Siraha has to pay Rs 14.72 million, Duhabi - Rs 11.66 million, Bhadrapur - Rs 17.25 million, Damak - Rs 4.01 million and Dhankuta - Rs 2.17 million.
Saturday, June 16, 2007
National park revenues dwindle
National park revenues dwindle
eKantipur.com, 15-Jun-2007
BY PRABHAKAR GHIMIRE
Government revenue from major jungle safaris of the country declined by 18 percent in the first eight months, despite double-digit growth in the number of incoming tourists.
A data complied by Department of National Parks and Wildlife Conservation has reckoned that three major national parks collected Rs 24.72 million during the period, down from Rs 30.19 millions recorded in the same period last year.
Chitwan National Park (CNP), Bardia National Park (BNP) and Shuklaphanta Wildlife Reserve (SWR) are the three major national parks in the country.
According to the department, CNP collected Rs 22.08 million in the period and the amount was 22 percent less than last year's collection. However, BNP pocketed Rs 1.85 million, which was 26 percent more than the revenue collected in same period last year. Similar is the story for SWR, which collected Rs 0.78 million as revenue during the period and the amount was almost double the collection recorded in the corresponding period last year.
Of the total revenue collection, almost 90 percent was contributed by CNP, which hosts around 80 percent of tourists enjoying jungle safari.
The popular tourist hangouts witnessed upward in tourist arrivals with the number of tourists increasing to 48,310 as compared to 40,789 of same period last year, despite the fall in revenue collection.
Of the total tourists arriving in these areas, large chunk visited CNP, the most popular wildlife safari destination in last eight months with the numbers reaching at 45,856 while 2,298 and 166 tourists visited BNP and SWR respectively.
Concerned officials attribute mismatch between tourist arrivals and revenue to irregularity in collection of revenues from revenues heads, which are not directly related to tourist arrivals.
“Some heads of revenue have no relation with tourist arrivals," said Shiva Raj Bhatta, ex-warden of CNP and BNP, adding, “Some seasonal revenues vary from month to month and recovery of outstandings of previous years may have affected revenue amount which do not have co-relation with the tourist arrivals.”
Moreover, some of the tourists who pay entry fees to parks prefer visiting community forests to the parks.
The community forests which are emerging as alternative to the parks are also contributing to reduction of park revenue, say park officials.
Tourists with travel package or Fit Individual Travelers (FIT) visit the destinations for wildlife safari activities that include elephant ride, canoe ride, jungle driving, jungle walk, bird watching among others.
Over a decade long conflict had marred tourist arrivals and subsequent revenue collection in those areas.
eKantipur.com, 15-Jun-2007
BY PRABHAKAR GHIMIRE
Government revenue from major jungle safaris of the country declined by 18 percent in the first eight months, despite double-digit growth in the number of incoming tourists.
A data complied by Department of National Parks and Wildlife Conservation has reckoned that three major national parks collected Rs 24.72 million during the period, down from Rs 30.19 millions recorded in the same period last year.
Chitwan National Park (CNP), Bardia National Park (BNP) and Shuklaphanta Wildlife Reserve (SWR) are the three major national parks in the country.
According to the department, CNP collected Rs 22.08 million in the period and the amount was 22 percent less than last year's collection. However, BNP pocketed Rs 1.85 million, which was 26 percent more than the revenue collected in same period last year. Similar is the story for SWR, which collected Rs 0.78 million as revenue during the period and the amount was almost double the collection recorded in the corresponding period last year.
Of the total revenue collection, almost 90 percent was contributed by CNP, which hosts around 80 percent of tourists enjoying jungle safari.
The popular tourist hangouts witnessed upward in tourist arrivals with the number of tourists increasing to 48,310 as compared to 40,789 of same period last year, despite the fall in revenue collection.
Of the total tourists arriving in these areas, large chunk visited CNP, the most popular wildlife safari destination in last eight months with the numbers reaching at 45,856 while 2,298 and 166 tourists visited BNP and SWR respectively.
Concerned officials attribute mismatch between tourist arrivals and revenue to irregularity in collection of revenues from revenues heads, which are not directly related to tourist arrivals.
“Some heads of revenue have no relation with tourist arrivals," said Shiva Raj Bhatta, ex-warden of CNP and BNP, adding, “Some seasonal revenues vary from month to month and recovery of outstandings of previous years may have affected revenue amount which do not have co-relation with the tourist arrivals.”
Moreover, some of the tourists who pay entry fees to parks prefer visiting community forests to the parks.
The community forests which are emerging as alternative to the parks are also contributing to reduction of park revenue, say park officials.
Tourists with travel package or Fit Individual Travelers (FIT) visit the destinations for wildlife safari activities that include elephant ride, canoe ride, jungle driving, jungle walk, bird watching among others.
Over a decade long conflict had marred tourist arrivals and subsequent revenue collection in those areas.
Remittance growth plummets
Remittance growth plummets
Nepalnews.com, 12-Jun-2007
The rate of growth of remittance income has plummeted sharply in the first nine months of the current fiscal year.
According to a report by Nepal Rastra Bank (NRB), the remittance earning increased by 8.4 percent in the first nine months of the current fiscal year – compared with 48.9 percent growth it had witnessed during the same period previous fiscal year.
In recent years, remittance earnings have had immense impact on national economy contributing to 20 percent of GDP.
The NRB report states that the country received Rs 72.39 billion as remittance income during this period.
The central bank says that the decline in growth rate is due to absence of substantial increase in the number of workers going for overseas and stagnant wage overseas.
Furthermore, the appreciation of Nepali Rupees compared with US dollar, too, has affected the remittance earnings.
Nepalnews.com, 12-Jun-2007
The rate of growth of remittance income has plummeted sharply in the first nine months of the current fiscal year.
According to a report by Nepal Rastra Bank (NRB), the remittance earning increased by 8.4 percent in the first nine months of the current fiscal year – compared with 48.9 percent growth it had witnessed during the same period previous fiscal year.
In recent years, remittance earnings have had immense impact on national economy contributing to 20 percent of GDP.
The NRB report states that the country received Rs 72.39 billion as remittance income during this period.
The central bank says that the decline in growth rate is due to absence of substantial increase in the number of workers going for overseas and stagnant wage overseas.
Furthermore, the appreciation of Nepali Rupees compared with US dollar, too, has affected the remittance earnings.
Another industry packs up
Another industry packs up
eKantipur.com, 12-Jun-2007
Citing security problem, Crescent Industries -- one of the leading joint venture companies of the district -- has shut down its operations and has decided to shift to Nigeria.
The industry was established four years ago with investment totaling Rs 500 million, including 40 percent shares from Minakshi Group of Industries of Kolkata. It had capacity to employ 500 persons in its corrugated sheet manufacturing plant.
Madan Koirala, managing director of the industry, said that the industry was forced to take the unpleasant step as it could not withstand threats and intimidations coming from various armed groups.
Tiger, an infamous local armed group, and other groups were demanding huge amount of money from the company.
The closure of industry has affected a dozen VDCs of the district. It was generating employment and giving boost to economic activities in those VDCs.
The industry unveiled its plan to shift to Nigeria on Monday after it shipped its plants into Indian territory.
Meanwhile, business community of the eastern region has dubbed the incident as 'unfortunate' and raised serious questions over government's commitment to protect investment coming into the country. “The industry's decision to relocate outside the country is very unfortunate,” Mahesh Kumar Jaju, senior vice president of Morang Trade Association, told the Post.
Suka Dev Mehta, president of Inaruwa Chamber of Commerce and Industry lambasted the local administration and government for not being serious to improve industrial security.
“Entrepreneurs are not seeking industrial security for nothing. The government must be serious toward it,” said Mehta, urging the eight-political parties in the government to work for restoring business environment in the country.
eKantipur.com, 12-Jun-2007
Citing security problem, Crescent Industries -- one of the leading joint venture companies of the district -- has shut down its operations and has decided to shift to Nigeria.
The industry was established four years ago with investment totaling Rs 500 million, including 40 percent shares from Minakshi Group of Industries of Kolkata. It had capacity to employ 500 persons in its corrugated sheet manufacturing plant.
Madan Koirala, managing director of the industry, said that the industry was forced to take the unpleasant step as it could not withstand threats and intimidations coming from various armed groups.
Tiger, an infamous local armed group, and other groups were demanding huge amount of money from the company.
The closure of industry has affected a dozen VDCs of the district. It was generating employment and giving boost to economic activities in those VDCs.
The industry unveiled its plan to shift to Nigeria on Monday after it shipped its plants into Indian territory.
Meanwhile, business community of the eastern region has dubbed the incident as 'unfortunate' and raised serious questions over government's commitment to protect investment coming into the country. “The industry's decision to relocate outside the country is very unfortunate,” Mahesh Kumar Jaju, senior vice president of Morang Trade Association, told the Post.
Suka Dev Mehta, president of Inaruwa Chamber of Commerce and Industry lambasted the local administration and government for not being serious to improve industrial security.
“Entrepreneurs are not seeking industrial security for nothing. The government must be serious toward it,” said Mehta, urging the eight-political parties in the government to work for restoring business environment in the country.
Stock brokers: Making hay while sun shines
Stock brokers: Making hay while sun shines
eKantipur.com, 9-Jun-2007
By KRISHNA REGMI
Stock brokers in Nepal are having a great time: their commission rate is one of the highest in the world and their profits are soaring. On top of that, their profits, in a way, are being protected by regulations that bars entry of new brokers in the ring.
As a result many brokers are raking in vast sums of money in commission. For example, during the last ten months of the current fiscal year, the highest-income generating broker earned on average, Rs 960,000 per month after taxes.
The commissions compiled by the Nepal Stock Exchange (NEPSE) show that the second highest earner made Rs 910,000 per month. The third, fourth, fifth and sixth highest earning brokers made Rs 870,000, Rs 740,000, Rs 630,000, and Rs 615,000 per month respectively.
NEPSE clients complain that the commission rate offered to brokers is too high, something that the NEPSE officials also agree with in private.
The commission rates at the regional stock markets also justify these complains. For instance, the Bombay Stock Exchange, India and Chittagong Stock Exchange, Bangladesh, have imposed upper ceilings of one percent for brokerage commission. However, in Nepal the lower ceiling is one percent and it can go up to 1.5 percent.
Fixed number of brokers for the last 11 years is another issue since it concentrates the incomes from stock commissions within a small group and keeps the interest rates high.
Notwithstanding the expanding size of the market, NEPSE has not added brokers for the last 11 years. At the time of its establishment in 1994, NEPSE had appointed 25 brokers. Two years later, it was expanded to 32. But the number declined later to 23, as some left the service and some were blacklisted by NEPSE.
In the beginning, there were only 60 companies; now 133 companies are listed for trading. Likewise, the market capitalization-- the value of listed shares-- shot up by over 21 times, to 148 billon rupees.
"Due to strong lobbying from the brokers, no concrete efforts were made in the past to allow the entry of new brokers," said a NEPSE official, preferring to remain unnamed.
But Rewat Bahadur Karki, general manager of NEPSE said the stock market has dispatched a letter to the Securities Board of Nepal (SEBON), a regulatory body, asking its permission to appoint 27 more brokers.
"However, there is no response as yet," he said, adding, "As soon as we get a nod, we will increase the number of brokers."
Deepak Raj Kafle, chairman of SEBON said the board is awaiting endorsement of the Brokers and Dealers Regulations that it has forwarded to the government to clear the way for expansion of the number of brokers.
Kafle also said absence of professional brokers was one of the reasons behind the erratic movement of share prices and the high rate of commissions.
Due to absence of competition coupled by weak regulations, the brokers are not rendering quality service. The recently prepared report by NEPSE points out that there is an immense need for brokers to professionalize their services, providing investors with an efficient and quality service. They have not maintained proper offices, and most do not have email addresses or fax machines, said the report.
eKantipur.com, 9-Jun-2007
By KRISHNA REGMI
Stock brokers in Nepal are having a great time: their commission rate is one of the highest in the world and their profits are soaring. On top of that, their profits, in a way, are being protected by regulations that bars entry of new brokers in the ring.
As a result many brokers are raking in vast sums of money in commission. For example, during the last ten months of the current fiscal year, the highest-income generating broker earned on average, Rs 960,000 per month after taxes.
The commissions compiled by the Nepal Stock Exchange (NEPSE) show that the second highest earner made Rs 910,000 per month. The third, fourth, fifth and sixth highest earning brokers made Rs 870,000, Rs 740,000, Rs 630,000, and Rs 615,000 per month respectively.
NEPSE clients complain that the commission rate offered to brokers is too high, something that the NEPSE officials also agree with in private.
The commission rates at the regional stock markets also justify these complains. For instance, the Bombay Stock Exchange, India and Chittagong Stock Exchange, Bangladesh, have imposed upper ceilings of one percent for brokerage commission. However, in Nepal the lower ceiling is one percent and it can go up to 1.5 percent.
Fixed number of brokers for the last 11 years is another issue since it concentrates the incomes from stock commissions within a small group and keeps the interest rates high.
Notwithstanding the expanding size of the market, NEPSE has not added brokers for the last 11 years. At the time of its establishment in 1994, NEPSE had appointed 25 brokers. Two years later, it was expanded to 32. But the number declined later to 23, as some left the service and some were blacklisted by NEPSE.
In the beginning, there were only 60 companies; now 133 companies are listed for trading. Likewise, the market capitalization-- the value of listed shares-- shot up by over 21 times, to 148 billon rupees.
"Due to strong lobbying from the brokers, no concrete efforts were made in the past to allow the entry of new brokers," said a NEPSE official, preferring to remain unnamed.
But Rewat Bahadur Karki, general manager of NEPSE said the stock market has dispatched a letter to the Securities Board of Nepal (SEBON), a regulatory body, asking its permission to appoint 27 more brokers.
"However, there is no response as yet," he said, adding, "As soon as we get a nod, we will increase the number of brokers."
Deepak Raj Kafle, chairman of SEBON said the board is awaiting endorsement of the Brokers and Dealers Regulations that it has forwarded to the government to clear the way for expansion of the number of brokers.
Kafle also said absence of professional brokers was one of the reasons behind the erratic movement of share prices and the high rate of commissions.
Due to absence of competition coupled by weak regulations, the brokers are not rendering quality service. The recently prepared report by NEPSE points out that there is an immense need for brokers to professionalize their services, providing investors with an efficient and quality service. They have not maintained proper offices, and most do not have email addresses or fax machines, said the report.
Saturday, June 09, 2007
Should We Globalize Labor Too?
Should We Globalize Labor Too?
New York Time, June 10, 2007
By JASON DePARLE
Gure Sarki, goat keeper, of Chaurmuni, Nepal.
The Arniko Highway climbs out of Kathmandu in long wending loops that pay twin tribute to the impassability of Himalayan terrain and the implausibility of its development. Outside Africa, no country is poorer than Nepal. Its per capita income looks like a misprint: $270 a year. Sudan’s is more than twice as high. Nearly two-thirds of Nepalis lack electricity. Half the preschoolers are malnourished. To the list of recent woes add regicide — 10 royals slaughtered in 2001 by a suicidal prince — and a Maoist insurgency.
A few hours east of the city, a gravel road juts across a talc quarry, where the work would be disturbing enough even if the workers were not under five feet tall. Scores of young teenagers, barefoot and stunted, lug rocks from a lunar pit. The journey continues through a district capital flying Communist flags and ends, 12 hours after it began, above a forlorn canyon. Halfway down the cactus-lined slope, a destitute farmer named Gure Sarki recently bought four goats.
The story of Gure Sarki’s goats involves decades of thinking about foreign aid and the type of program often seen as modern practice at its best. Two years ago, an organizer appeared in the canyon to say that the Nepal government (with money from the World Bank) was making local grants for projects of poor villagers’ choosing. First villagers had to catalog their problems. With Sarki as chairman, Chaurmuni village made its list:
“Not able to eat for the whole year.”
“Not able to send children to school.”
“Lack of proper feed and fodder for the livestock.”
“Landslide and flood.”
“Not able to get the trust of the moneylender.”
“Insecurity and danger.”
A week later, they agreed to start a microcredit fund and expand their livestock herds. Twenty villagers would buy a total of 55 goats at $50 apiece. The plan specified who would serve on the goat-buying committee, the per diem the goat buyers would get and the interest rates on the loans (just over 1 percent). Those who were literate signed their names, while others inked fingerprints, and the papers went off to Kathmandu, where officials approved a $3,700 grant. Within two months of the first meeting, Sarki had his goats. They doubled the value of his livestock holdings. He prizes them so much that he sleeps beside them inside his house to protect them from leopards. He plans to sell them next year for a profit of about $25 each.
Lant Pritchett says he has a better idea. Pritchett, a development economist and practiced iconoclast, has just left the World Bank to teach at Harvard and to help Google plan its philanthropic efforts on global poverty. In a recent trip through Chaurmuni, he praised the goats as community-driven development at its best: a fast, flexible way of delivering tangible aid to the poor. “But Nepal isn’t going to goat its way out of poverty,” he said. Nor does he think that as a small, landlocked country Nepal can soon prosper through trade.
To those standard solutions, trade and aid, Pritchett would add a third: a big upset-the-applecart idea, equally offensive to the left and the right. He wants a giant guest-worker program that would put millions of the world’s poorest people to work in its richest economies. Never mind the goats; if you really want to help Gure Sarki, he says, let him cut your lawn. Pritchett’s nearly religious passion is reflected in the title of his migration manifesto: “Let Their People Come.” It was published last year to little acclaim — none at all, in fact — but that is Pritchett’s point. In a world in which rock stars fight for debt relief and students shun sweatshop apparel, he is vexed to find no placards raised for the cause of labor migration. If goods and money can travel, why can’t workers follow? What’s so special about borders?
When they are being polite, Pritchett’s friends say he is, ahem, ahead of his time. Less politely, critics say that an army of guest workers would erode Western sovereignty, depress domestic wages, abet terrorism, drain developing countries of talent, separate poor parents from their kids and destroy the West’s cultural cohesion. Pritchett has spent his career puncturing the panaceas of others. It says something about the intransigence of much of the world’s poverty that he may be in the grip of his own.
Pritchett was up early, on stinky-toilet patrol. He had arrived in the dark in the village of Bisauli and slept on a dirt floor. Daylight brought the first glimpse of his surroundings and with it a boondoggle alert: several villagers had used program money to build outhouses. “South Asia is littered with toilets that are quickly abandoned because they become smelly,” he said. Water hauled up mountains is too precious for cleaning squat toilets; most people go outside. Pritchett had feared that organizers were pushing toilets and was relieved to find most of the money had purchased faucets and goats.
He moved on — actually up, given the topography — and offered a primer on rural development through shortened breaths. “PAF (huff)” — the Poverty Alleviation Fund — “is a third-generation project (huff),” he said. The first generation tried everything at once — roads, drinking water, new crops — and failed through complexity. The second generation simplified: road builders just built roads; well diggers dug wells. But some villages got roads when they needed wells. And some villages got wells that did not work. Some villages got nothing because people stole the cash. The World Bank officials tried to fix these problems when they helped design the Nepal program, which so far has received $40 million. The program is flexible; the money can be put to many uses. It is “demand driven”; villagers decide. It is “transparent”; the accounting is posted on a bulletin board. And it is “targeted”; only poor villagers qualify. “PAF (huff) is state of the art,” he said. “It’s pimped up!”
Still, for all of the program’s sophistication, it is a modest effort aimed less at ending poverty than at ameliorating it. With an annual per capita income of $90, the Ramechhap district, where Pritchett was traveling, has much to ameliorate. Midway through his morning tour, Pritchett stopped at a faucet where three women were filling baskets with firewood and water jugs. The baskets were designed to rest on stooped backs with the help of a forehead strap; they looked like a chiropractor’s full employment plan. Pritchett was traveling with his 14-year-old son, Isaac (5-foot-8, 135 pounds), and challenged him to lift one. Neck veins popped, but the basket didn’t move. Pritchett (5-foot-9, 185 pounds) leaned into the forehead strap and staggered a few steps. Slight as dime-store dolls, the giggling women grabbed their baskets and trundled off in bare feet. Life in Nepal is hard.
The same could be said of Ireland in the 1850s, Italy in the 1880s and Oklahoma in the 1930s. In each case, large populations suffered economic shocks and responded in the same way. They left. Following the potato blight, the Irish population fell by 53 percent, at least as much because of migration as the deaths caused by famine. That benefited the migrants, of course. But Pritchett notes that it also left Ireland with fewer people to support; gross domestic product per capita never fell.
Pritchett contrasts Zambia, whose economy peaked in 1964 on the strength of copper mines. When copper markets declined, Zambians had no place to go; the population nearly tripled and per capita G.D.P. fell more than 40 percent. Pritchett likens 19th-century Ireland to a ghost town and calls places like Zambia “zombies” — lands of the living dead. While some distressed regions can adapt and prosper, by far a preferential fix, Pritchett argues that hundreds of millions of people are stuck in places with little chance for development. For them, only “out-migration can prevent an extended and permanent fall in wages.”
Nepal has not suffered a sudden shock (except for the civil war, which has paused with the Maoists sharing government power). But it is a small, landlocked country with little manufacturing, daunting terrain, low literacy and scant infrastructure. What it does have — its “comparative advantage” — is cheap workers, many of whom already go abroad. While most go to low-wage countries like India, they still send home about $1 billion a year. That accounts for 12 percent of Nepal’s G.D.P. and is three times its spending on “public investment,” which includes efforts like education, hunger relief and electrification. Despite the country’s troubles, remittances have helped cut the poverty rate by 25 percent and would cut it further, Pritchett says, if more Nepalis could work in the West.
Stinky-toilet patrol completed, Pritchett was getting a report in a neighboring village — goats bought, fodder trees planted — when an overseas worker wandered in. Indra Magar, home from Qatar, had the air of a visiting prince. He was 25, with crisp jeans and a shirt stamped “United Precast Concrete.” The way his father beamed, it could have said “Princeton.” The father, Singha Madur, had spent his life as a human mule, hauling goods by foot over the mountains from a road nine days away. His son made $400 a month, nearly 10 times the local wage, and was saving to start a shop in Kathmandu. Something looked different about the younger Madur besides his clothes, and I finally realized what: he was the first villager I had seen with a paunch. I asked the father the best part of his son’s life. “He’s full!” he said. “Full all the time.”
Migration is Pritchett’s religion. He was raised a Mormon in Utah and Idaho, venerating ancestors who crossed the Plains to chase their dreams of Zion. Fifteen of his 16 great-great-grandparents made the trip. To commemorate the Mormons’ arrival, Pritchett and his siblings wore period clothes on Pioneer Day and paraded with covered wagons. “I’m into the general gestalt: people finding God, pursuing a vision to start a new life,” he says. “It’s a story you can build a culture around.”
His father, a lawyer, was a Mormon bishop, a lay position, but Pritchett was the family rebel. He not only drank beer with his buddies; he left the cans in his parents’ car. When his father berated him for skipping services, the smirking debate-team son replied, “Is that what you learned in church today?” In high school, he gave a cop the finger just to see what he would do. The defiance continued at Brigham Young University, where a fireworks prank in a bathroom stall made the school paper.
Mormon tradition required him to go on a mission after his freshman year, but Pritchett was unsure whether he believed. He hiked off one night and wandered until dawn, when he found himself at the Geneva Steel Mill, a dying plant that his grandfather, a carpenter, helped to build; it was as ugly as any place he had seen. Then the new sun painted the valley pink, and Pritchett had what he later called an epiphany: “In the right light, everything can be beautiful,” including religious duty. “That’s when I became a Christian,” he says. (His brother, who practices law in San Francisco, told me the story, which Pritchett seemed embarrassed to discuss.) His two-year mission in Argentina awakened him to global poverty. When he returned to B.Y.U. and married after his sophomore year, a text that figured in the courtship of his wife, Diane, was the Mormon book of Mosiah, in which King Benjamin implores the faithful to share their wealth.
If Joseph Smith offered one lodestar, Adam Smith offered another. Pritchett entered graduate school in 1983, as a long era in international development was meeting its end. For decades, experts had pursued variants of the “Big Push” theory: poor governments would borrow heavily abroad, invest in roads, clinics and schools and subsidize domestic industries protected by high tariffs, expecting their economies to eventually ignite. But the infant industries remained inefficient, and developing countries could not sell enough abroad to pay their debts. After Mexico stunned the world in 1982 by defaulting on its foreign debt, Big Push was out and “structural adjustment” was in. That meant budget cuts, privatization and, above all, free trade: export-led growth would save the world’s poor. Pritchett came of age with these policies, which were dubbed the Washington Consensus. He received his Ph.D. from the Massachusetts Institute of Technology and joined a group of researchers at the World Bank known as the “Hezbollah of Free Trade.”
There he found a mentor in Lawrence H. Summers, the bank’s chief economist, who was already famed as a brainy critic of received wisdoms. They wrote papers together challenging conventional views of health programs and population control and set off a tempest after Pritchett, critiquing a colleague’s work, wrote a mocking memo that pretended to advocate polluting poor countries. Summers signed the long memo (without reading that passage, he says) and found himself tied to a leaked portion that argued the “logic behind dumping a load of toxic waste in the lowest-wage country is impeccable.” Summers survived to become treasury secretary and until recently president of Harvard, where he and Pritchett will teach a course next year on globalization.
Pritchett’s career has straddled a paradoxical time. Poverty in China and India has plunged, Bono campaigns for debt relief and Angelina Jolie puts African hunger on MTV. On the surface, it seems like a golden age for poverty fighters. But despite a half-century of study, the development guild has few reliable answers to its most important question: how to make poor economies grow? China and India, by their very size, are idiosyncratic and have moved toward economic orthodoxies in unorthodox ways. There is little agreement on why they have succeeded, much less on how to transfer their success to places like Nepal. Elsewhere, experts have seen little but disappointment.
No region bought the Washington Consensus more avidly than Latin America. Yet for two decades, the growth of its per capita G.D.P. has hovered close to zero. Everyone expected the countries of the former Soviet Union to face transitional hardships, but their average economic contraction has been greater than that of the Great Depression and longer-lasting. Sub-Saharan Africa, despite decades of Western aid, has had little growth, more wars and new epidemics. Some big-name optimists remain, most notably Jeffrey D. Sachs, whose best-selling book, “The End of Poverty” (foreword by Bono), argues that the West knows how to end extreme poverty by 2025. But Pritchett is more typical of his peers when he says of the development record, “If that hasn’t been sufficient to beat the hubris out of you, you haven’t been paying attention.”
His own career reflects the profession’s lowered sights. His first field assignment, in 1998, cast him as a relief worker not a development specialist: he helped to finance rice purchases following the Indonesian financial crisis. His best-known academic work is negative: an article that shows global inequality to be even larger and more longstanding than generally supposed. One of Pritchett’s closest friends, William Easterly, attacked the whole rationale for foreign aid in his book “The White Man’s Burden,” which argues that aid has failed to promote growth. In contrast, Pritchett’s book (with David Dollar), “Assessing Aid,” argues that foreign assistance can spur growth when accompanied by sound local practices and helped to inspire a major Bush administration program, the Millennium Challenge Account. Still, it says something when Pritchett’s failure to condemn all aid casts him as an aid optimist.
When Argentina, a faithful adapter of the Washington Consensus, defaulted on its foreign debt in 2001 — two decades after Mexico — it rang down the curtain on another age of failed prescriptions. By then Pritchett was on leave at Harvard, teaching alongside other chastened economists. No one was fully satisfied with the Washington Consensus anymore, at least not as a prescription for growth. But no consensus had taken its place. The gains from increased trade, though sizable in many economists’ view, had mostly taken place. Aid and debt relief were generally seen as limited tools. The whole notion of big ideas was out of favor. “So little seems to work,” Pritchett warned in an article — “What’s the Big Idea” — that disparaged big ideas. Yet he was mulling a big idea of his own. True to form, it was a stink-bomb-in-the-bathroom kind of idea: an assault on the morality of borders.
The basics are simple: The rich world has lots of well-paying jobs and an aging population that cannot fill them. The poor world has desperate workers. But while goods and capital can easily cross borders, modern labor cannot. This strikes Pritchett as bad economics and worse social justice. He likens the limits on labor mobility to “apartheid on a global scale.” Think Desmond Tutu with equations.
Pritchett sees five irresistible forces for migration, stymied by eight immovable ideas. The most potent migration force is the one epitomized by Nepal: vast inequality. In the late 19th century, rich countries had incomes about 10 times greater than the poorest ones. Today’s ratio is about 50 to 1, Pritchett writes in “Let Their People Come.” The poor simply have too much to gain from crossing borders not to try. What arrests them are the convictions of rich societies: that migration erodes domestic wages, courts cultural conflicts and is unnecessary for — perhaps antithetical to — foreign development. When irresistible force meets immovable object, something gives — in this case legality. Migration goes underground, endangering migrants and lessening their rewards.
The key to breaking the political deadlock, Pritchett says, is to ensure that the migrants go home, which is why he emphasizes temporary workers (though personally he would let them stay). About 7 percent of the rich world’s jobs are held by people from developing countries. For starters, he would like to see the poor get another 3 percent, or 16 million guest-worker jobs — 3 million in the U.S. They would stay three to five years, with no path to citizenship, and work in fields with certified labor shortages. He assumes that most receiving countries would not allow them to bring families. Taxpayers would be spared from educating the migrants’ kids. Domestic workers would gain some protection through the certification process. And a revolving labor pool would reach more of the world’s poor.
In effect, Pritchett is proposing a Saudi Arabian plan in which an affluent society creates a labor subcaste that is permanently excluded from its ranks. His does so knowing full well that his agenda coincides with that of unscrupulous employers looking to exploit cheap workers. Many migration advocates oppose a plan, now dividing Congress, to create a guest-worker force a 15th as large as the one Pritchett wants, saying it would create a new underclass. But Pritchett calls guest work the only way to accommodate large numbers. To insist that migrants have a right to citizenship and family unification, he says, is to let men like Gure Sarki go hungry. It is cruel to be kind. The choice is theirs. Let the poor decide. “Letting guest workers in America doesn’t create an underclass,” he says. “It moves an underclass and makes the underclass better off.”
Part of Pritchett’s argument is mathematical. Drawing on World Bank models, he estimates his plan would produce annual gains of about $300 billion — three times the benefit of removing the remaining barriers to trade. But the philosophical packaging gives his plan its edge. Pritchett assails a basic premise — that development means developing places. He is more concerned about helping Nepalis than he is about helping Nepal. If remittances spur development back home, great, but that is not his central concern. “Migration is development,” he says.
Indeed, Pritchett attacks the primacy of nationality itself, treating it as an atavistic prejudice. Modern moral theory rejects discrimination based on other conditions of birth. If we do not bar people from jobs because they were born female, why bar them because they were born in Nepal? The name John Rawls appears on only a single page of “Let Their People Come,” but Pritchett is taking Rawlsian philosophy to new lengths. If a just social order, as Rawls theorized, is one we would embrace behind a “veil of ignorance” — without knowing what traits we possess — a world that uses the trait of nationality to exclude the neediest workers from the richest job markets is deeply unjust. (Rawls himself thought his theory did not apply across national borders.) Pritchett’s Harvard students rallied against all kinds of evils, he writes, but “I never heard the chants, ‘Hey, ho, restrictions on labor mobility have to go.’ ”
Even friends fear he has not come to grips with the numbers. The West is nowhere close to accepting Pritchett’s 16 million — and the developing world has a labor force of nearly 3 billion; what if most of them moved? “I think Lant overdoes it in estimating migration’s potential,” said Nancy Birdsall, president of the Center for Global Development in Washington, which commissioned and published the book. “Do you think the U.S. would accept 300 million of the world’s poorest people?” Birdsall praises Pritchett’s work as a conversation starter but adds, “People think about development as being about place not person — they’re more right about this than Lant believes.”
One of those people is Jeffrey D. Sachs, director of the Earth Institute at Columbia University. “There’s no way that migration is going to substitute for economic development at home,” he told me recently. Pritchett’s willingness to abide more family separation reddens Sach’s face. Separation has spread adultery, divorce and AIDS across the developing world. “It’s tragic!” he said. “Let them come as a family! Having tens of millions of men separated from their families in temporary living conditions is hardly going to be conducive to the kind of world we’re aiming to build.”
Lawrence Summers, Pritchett’s old mentor, said Pritchett’s book may be like Milton Friedman’s “Capitalism and Freedom,” which seemed “lunatic in the moment” but won converts with time. Still, he wonders if the West can create migrant subcastes without compromising its values and fears that voluntary compacts do not solve the moral problem; we do not let people volunteer to sell body parts or work in unsafe mines. “Lant’s kind of compassionate libertarianism carries the risk of a morally problematic coarsening that we resist in many other ways,” he said. He is open to guest-worker experiments but wonders about their “sustainability.”
Those are migration allies. People who think migration is too high — 12 percent of Americans are foreign-born — say that Pritchett is prescribing cultural suicide. “All guest-worker programs result in permanent settlement,” says Mark Krikorian of the Center for Immigration Studies, a Washington group that seeks less immigration. Some workers will overstay their visas, he warns. Advocates and employers will lobby for extensions. And guest workers will increase illegal immigration by attracting relatives and friends. Krikorian fears that immigrants are already forming parallel societies whose numbers do not even bother to learn English; adding to the 36 million already here, he said, would speed the cultural secession. “You’d have more ‘Press 2 for Swahili,’ no question about that,” he says. “It’d be a complete catastrophe.”
Pritchett responds in character — defiantly. Moral coarsening? “We’re already being morally coarsened by allowing people to live as fourth-class citizens in the rest of the world,” Pritchett says. “We’re just not forced to confront it.” Scale? Yes, his plan would start small (by global terms), but Pritchett argues that it contains the seeds of its own expansion. With lots of old people to support, rich countries will “get hooked on” the migrants’ labor and especially on the taxes they pay into retiree health and pension funds. And if, as critics fear, the migrants stay, then yes, Pritchett does believe the U.S. could eventually swallow 300 million of the global poor. “It’s a big, empty country,” he says.
With more access to global labor markets, Pritchett predicts some poor countries will develop quickly while others, like Zambia, will depopulate into giant ghost towns as the world grows comfortable with higher levels of permanent migration. Eventually — over a century, say — the combination of population adjustments and policy innovation will raise the living standards of most poor countries to that of the West without pulling the West down, just as the rise of the Japanese has not meant the fall of Americans. The labor forces of the West are shrinking, which, he says, should keep wages high despite increased migration. Whether or not his forecasts are correct — the track record of his field is not reassuring — he has pondered the economics.
But the greatest risk posed by the Pritchett plan is cultural conflict, or even conflagration, which Pritchett greets with a shrug. “I don’t think about it a lot because I’m an economist,” he says. “If you say your culture can’t survive an influx of migrants, you have a pretty dim view of your culture.” Cultures change all the time, he figures, and change is not to be feared. A century hence, nations will still exist, but in a more ecumenical way. Germans will accept Turkish mosques, and Turkey will accept Christian spires, and everyone will be free to come and go as long as they obey the law. Here he sounds less like Adam Smith than Rodney King: “Can’t we all just get along?”
So far, in the U.S., at least, the answer has been yes: acculturation has triumphed in every generation, despite the doubters. But Pritchett envisions cultural blending on an unprecedented scale, across societies much less skillful at it. Israel and Palestine, Hutu and Tutsi, Bosnian and Serb — the world is not exactly galloping away from the ethnic and nationalist identities that he finds anachronistic. With an Ellis Island heart in a sleeper-cell age, Pritchett is reluctant to consider the possibility that the interests of the West and its would-be migrants could diverge. “If you say you believe in open borders, you sound like a lunatic — I’m aware of that,” he says. “I’m saying let’s start slow and let what’s already happening happen in a managed way. A hundred years is a long time. We can work it out.”
On his last day in rural Nepal, Pritchett hiked down a parched canyon to find another group of earnest villagers awaiting him with a report. Along with buying 55 goats, the Chaurmuni group planted 182 trees and built two toilets. Everything about the gathering seemed familiar, except the group’s chairman — Gure Sarki — whose shirt had such gaping holes they bared his shoulders to the sun. He wore a black knit cap yet shivered in the heat, and a boil-like growth the size of an egg rose from his forehead. For all his striking need, he was ruggedly handsome, as if the great Karmic wheel had reincarnated Clint Eastwood as a Nepali goat farmer. Pritchett and I spent the morning at his house.
Sarki, 52, is an Untouchable whose family had lived in Chaurmuni for at least 100 years. Chronically hungry in his early 20s, he walked nine days to an Indian border town with road-building work. He stayed three years and bought a little land, but returned home after his father’s death at his grieving mother’s request. Sarki’s half-acre inheritance was too small to feed his children, so he worked for others when he could and borrowed when he had to at the village interest rate of 36 percent. He pointed to a reedy teenage son and boasted that he fed him three daily meals. “I would like to eat three times a day, but I am feeding the children,” he said. (Pritchett, wincing, whispered, “I’m almost certain this boy is malnourished.”) On one level, the story confirmed Pritchett’s view: migration, even to India, had helped Sarki more than anything else. But he did not leave again. “I like this place,” he said. “I have brothers and sisters here.” Staying or going — each involved pain.
A low-caste, underfed goat farmer, in a place with per capita income of $90 a year, Sarki is global inequality corporealized. He has never seen a bathtub. He has never been to a dentist. He has never owned a pair of glasses and squints to see his feet. He said the boil on his head has been there 30 years. and he did not know what caused it. When I told him the average American lived on about two million rupees a year, $25,000, he laughed as if hearing a fable. “That is like a story to us,” he said. He thanked us for coming and asked how to do better. Pritchett stammered. “What can you say, Be born in America?” he said to me. Then speaking through a translator, Pritchett assured Sarki that few Americans could manage with so little. Sarki smiled.
The jeep was quiet as we drove away, as if the sheer abjectness of Sarki’s poverty negated the meaning of anything that could be said about it. When we paused at a teahouse an hour later, I asked why Americans should care — so what if there are destitute goat farmers on the other side of the world? “I dislike arguments that try to give self-interested explanations: ‘We should care because they’ll become terrorists,’ ” Pritchett said. “I think we should care just because they’re human beings. The arc of human history has been the broadening of the scope of moral concern.”
Just then the power grid failed, leaving Pritchett in the dark as he recalled a college graduation speech — his wife’s — that urged classmates to meet the gazes of beggars. “The poverty of the poor is so desperate, it creates a situation that most of us are incapable of looking in the eye,” he said. “You don’t want to realize they’re human beings just like you.” Rich countries have jobs. Poor people need work. In Pritchett’s proudly eccentric view, to dwell on anything else is to blink and turn away.
Jason DeParle, a senior writer for The Times, last wrote for the magazine about labor migration from the Philippines.
New York Time, June 10, 2007
By JASON DePARLE
Gure Sarki, goat keeper, of Chaurmuni, Nepal.
The Arniko Highway climbs out of Kathmandu in long wending loops that pay twin tribute to the impassability of Himalayan terrain and the implausibility of its development. Outside Africa, no country is poorer than Nepal. Its per capita income looks like a misprint: $270 a year. Sudan’s is more than twice as high. Nearly two-thirds of Nepalis lack electricity. Half the preschoolers are malnourished. To the list of recent woes add regicide — 10 royals slaughtered in 2001 by a suicidal prince — and a Maoist insurgency.
A few hours east of the city, a gravel road juts across a talc quarry, where the work would be disturbing enough even if the workers were not under five feet tall. Scores of young teenagers, barefoot and stunted, lug rocks from a lunar pit. The journey continues through a district capital flying Communist flags and ends, 12 hours after it began, above a forlorn canyon. Halfway down the cactus-lined slope, a destitute farmer named Gure Sarki recently bought four goats.
The story of Gure Sarki’s goats involves decades of thinking about foreign aid and the type of program often seen as modern practice at its best. Two years ago, an organizer appeared in the canyon to say that the Nepal government (with money from the World Bank) was making local grants for projects of poor villagers’ choosing. First villagers had to catalog their problems. With Sarki as chairman, Chaurmuni village made its list:
“Not able to eat for the whole year.”
“Not able to send children to school.”
“Lack of proper feed and fodder for the livestock.”
“Landslide and flood.”
“Not able to get the trust of the moneylender.”
“Insecurity and danger.”
A week later, they agreed to start a microcredit fund and expand their livestock herds. Twenty villagers would buy a total of 55 goats at $50 apiece. The plan specified who would serve on the goat-buying committee, the per diem the goat buyers would get and the interest rates on the loans (just over 1 percent). Those who were literate signed their names, while others inked fingerprints, and the papers went off to Kathmandu, where officials approved a $3,700 grant. Within two months of the first meeting, Sarki had his goats. They doubled the value of his livestock holdings. He prizes them so much that he sleeps beside them inside his house to protect them from leopards. He plans to sell them next year for a profit of about $25 each.
Lant Pritchett says he has a better idea. Pritchett, a development economist and practiced iconoclast, has just left the World Bank to teach at Harvard and to help Google plan its philanthropic efforts on global poverty. In a recent trip through Chaurmuni, he praised the goats as community-driven development at its best: a fast, flexible way of delivering tangible aid to the poor. “But Nepal isn’t going to goat its way out of poverty,” he said. Nor does he think that as a small, landlocked country Nepal can soon prosper through trade.
To those standard solutions, trade and aid, Pritchett would add a third: a big upset-the-applecart idea, equally offensive to the left and the right. He wants a giant guest-worker program that would put millions of the world’s poorest people to work in its richest economies. Never mind the goats; if you really want to help Gure Sarki, he says, let him cut your lawn. Pritchett’s nearly religious passion is reflected in the title of his migration manifesto: “Let Their People Come.” It was published last year to little acclaim — none at all, in fact — but that is Pritchett’s point. In a world in which rock stars fight for debt relief and students shun sweatshop apparel, he is vexed to find no placards raised for the cause of labor migration. If goods and money can travel, why can’t workers follow? What’s so special about borders?
When they are being polite, Pritchett’s friends say he is, ahem, ahead of his time. Less politely, critics say that an army of guest workers would erode Western sovereignty, depress domestic wages, abet terrorism, drain developing countries of talent, separate poor parents from their kids and destroy the West’s cultural cohesion. Pritchett has spent his career puncturing the panaceas of others. It says something about the intransigence of much of the world’s poverty that he may be in the grip of his own.
Pritchett was up early, on stinky-toilet patrol. He had arrived in the dark in the village of Bisauli and slept on a dirt floor. Daylight brought the first glimpse of his surroundings and with it a boondoggle alert: several villagers had used program money to build outhouses. “South Asia is littered with toilets that are quickly abandoned because they become smelly,” he said. Water hauled up mountains is too precious for cleaning squat toilets; most people go outside. Pritchett had feared that organizers were pushing toilets and was relieved to find most of the money had purchased faucets and goats.
He moved on — actually up, given the topography — and offered a primer on rural development through shortened breaths. “PAF (huff)” — the Poverty Alleviation Fund — “is a third-generation project (huff),” he said. The first generation tried everything at once — roads, drinking water, new crops — and failed through complexity. The second generation simplified: road builders just built roads; well diggers dug wells. But some villages got roads when they needed wells. And some villages got wells that did not work. Some villages got nothing because people stole the cash. The World Bank officials tried to fix these problems when they helped design the Nepal program, which so far has received $40 million. The program is flexible; the money can be put to many uses. It is “demand driven”; villagers decide. It is “transparent”; the accounting is posted on a bulletin board. And it is “targeted”; only poor villagers qualify. “PAF (huff) is state of the art,” he said. “It’s pimped up!”
Still, for all of the program’s sophistication, it is a modest effort aimed less at ending poverty than at ameliorating it. With an annual per capita income of $90, the Ramechhap district, where Pritchett was traveling, has much to ameliorate. Midway through his morning tour, Pritchett stopped at a faucet where three women were filling baskets with firewood and water jugs. The baskets were designed to rest on stooped backs with the help of a forehead strap; they looked like a chiropractor’s full employment plan. Pritchett was traveling with his 14-year-old son, Isaac (5-foot-8, 135 pounds), and challenged him to lift one. Neck veins popped, but the basket didn’t move. Pritchett (5-foot-9, 185 pounds) leaned into the forehead strap and staggered a few steps. Slight as dime-store dolls, the giggling women grabbed their baskets and trundled off in bare feet. Life in Nepal is hard.
The same could be said of Ireland in the 1850s, Italy in the 1880s and Oklahoma in the 1930s. In each case, large populations suffered economic shocks and responded in the same way. They left. Following the potato blight, the Irish population fell by 53 percent, at least as much because of migration as the deaths caused by famine. That benefited the migrants, of course. But Pritchett notes that it also left Ireland with fewer people to support; gross domestic product per capita never fell.
Pritchett contrasts Zambia, whose economy peaked in 1964 on the strength of copper mines. When copper markets declined, Zambians had no place to go; the population nearly tripled and per capita G.D.P. fell more than 40 percent. Pritchett likens 19th-century Ireland to a ghost town and calls places like Zambia “zombies” — lands of the living dead. While some distressed regions can adapt and prosper, by far a preferential fix, Pritchett argues that hundreds of millions of people are stuck in places with little chance for development. For them, only “out-migration can prevent an extended and permanent fall in wages.”
Nepal has not suffered a sudden shock (except for the civil war, which has paused with the Maoists sharing government power). But it is a small, landlocked country with little manufacturing, daunting terrain, low literacy and scant infrastructure. What it does have — its “comparative advantage” — is cheap workers, many of whom already go abroad. While most go to low-wage countries like India, they still send home about $1 billion a year. That accounts for 12 percent of Nepal’s G.D.P. and is three times its spending on “public investment,” which includes efforts like education, hunger relief and electrification. Despite the country’s troubles, remittances have helped cut the poverty rate by 25 percent and would cut it further, Pritchett says, if more Nepalis could work in the West.
Stinky-toilet patrol completed, Pritchett was getting a report in a neighboring village — goats bought, fodder trees planted — when an overseas worker wandered in. Indra Magar, home from Qatar, had the air of a visiting prince. He was 25, with crisp jeans and a shirt stamped “United Precast Concrete.” The way his father beamed, it could have said “Princeton.” The father, Singha Madur, had spent his life as a human mule, hauling goods by foot over the mountains from a road nine days away. His son made $400 a month, nearly 10 times the local wage, and was saving to start a shop in Kathmandu. Something looked different about the younger Madur besides his clothes, and I finally realized what: he was the first villager I had seen with a paunch. I asked the father the best part of his son’s life. “He’s full!” he said. “Full all the time.”
Migration is Pritchett’s religion. He was raised a Mormon in Utah and Idaho, venerating ancestors who crossed the Plains to chase their dreams of Zion. Fifteen of his 16 great-great-grandparents made the trip. To commemorate the Mormons’ arrival, Pritchett and his siblings wore period clothes on Pioneer Day and paraded with covered wagons. “I’m into the general gestalt: people finding God, pursuing a vision to start a new life,” he says. “It’s a story you can build a culture around.”
His father, a lawyer, was a Mormon bishop, a lay position, but Pritchett was the family rebel. He not only drank beer with his buddies; he left the cans in his parents’ car. When his father berated him for skipping services, the smirking debate-team son replied, “Is that what you learned in church today?” In high school, he gave a cop the finger just to see what he would do. The defiance continued at Brigham Young University, where a fireworks prank in a bathroom stall made the school paper.
Mormon tradition required him to go on a mission after his freshman year, but Pritchett was unsure whether he believed. He hiked off one night and wandered until dawn, when he found himself at the Geneva Steel Mill, a dying plant that his grandfather, a carpenter, helped to build; it was as ugly as any place he had seen. Then the new sun painted the valley pink, and Pritchett had what he later called an epiphany: “In the right light, everything can be beautiful,” including religious duty. “That’s when I became a Christian,” he says. (His brother, who practices law in San Francisco, told me the story, which Pritchett seemed embarrassed to discuss.) His two-year mission in Argentina awakened him to global poverty. When he returned to B.Y.U. and married after his sophomore year, a text that figured in the courtship of his wife, Diane, was the Mormon book of Mosiah, in which King Benjamin implores the faithful to share their wealth.
If Joseph Smith offered one lodestar, Adam Smith offered another. Pritchett entered graduate school in 1983, as a long era in international development was meeting its end. For decades, experts had pursued variants of the “Big Push” theory: poor governments would borrow heavily abroad, invest in roads, clinics and schools and subsidize domestic industries protected by high tariffs, expecting their economies to eventually ignite. But the infant industries remained inefficient, and developing countries could not sell enough abroad to pay their debts. After Mexico stunned the world in 1982 by defaulting on its foreign debt, Big Push was out and “structural adjustment” was in. That meant budget cuts, privatization and, above all, free trade: export-led growth would save the world’s poor. Pritchett came of age with these policies, which were dubbed the Washington Consensus. He received his Ph.D. from the Massachusetts Institute of Technology and joined a group of researchers at the World Bank known as the “Hezbollah of Free Trade.”
There he found a mentor in Lawrence H. Summers, the bank’s chief economist, who was already famed as a brainy critic of received wisdoms. They wrote papers together challenging conventional views of health programs and population control and set off a tempest after Pritchett, critiquing a colleague’s work, wrote a mocking memo that pretended to advocate polluting poor countries. Summers signed the long memo (without reading that passage, he says) and found himself tied to a leaked portion that argued the “logic behind dumping a load of toxic waste in the lowest-wage country is impeccable.” Summers survived to become treasury secretary and until recently president of Harvard, where he and Pritchett will teach a course next year on globalization.
Pritchett’s career has straddled a paradoxical time. Poverty in China and India has plunged, Bono campaigns for debt relief and Angelina Jolie puts African hunger on MTV. On the surface, it seems like a golden age for poverty fighters. But despite a half-century of study, the development guild has few reliable answers to its most important question: how to make poor economies grow? China and India, by their very size, are idiosyncratic and have moved toward economic orthodoxies in unorthodox ways. There is little agreement on why they have succeeded, much less on how to transfer their success to places like Nepal. Elsewhere, experts have seen little but disappointment.
No region bought the Washington Consensus more avidly than Latin America. Yet for two decades, the growth of its per capita G.D.P. has hovered close to zero. Everyone expected the countries of the former Soviet Union to face transitional hardships, but their average economic contraction has been greater than that of the Great Depression and longer-lasting. Sub-Saharan Africa, despite decades of Western aid, has had little growth, more wars and new epidemics. Some big-name optimists remain, most notably Jeffrey D. Sachs, whose best-selling book, “The End of Poverty” (foreword by Bono), argues that the West knows how to end extreme poverty by 2025. But Pritchett is more typical of his peers when he says of the development record, “If that hasn’t been sufficient to beat the hubris out of you, you haven’t been paying attention.”
His own career reflects the profession’s lowered sights. His first field assignment, in 1998, cast him as a relief worker not a development specialist: he helped to finance rice purchases following the Indonesian financial crisis. His best-known academic work is negative: an article that shows global inequality to be even larger and more longstanding than generally supposed. One of Pritchett’s closest friends, William Easterly, attacked the whole rationale for foreign aid in his book “The White Man’s Burden,” which argues that aid has failed to promote growth. In contrast, Pritchett’s book (with David Dollar), “Assessing Aid,” argues that foreign assistance can spur growth when accompanied by sound local practices and helped to inspire a major Bush administration program, the Millennium Challenge Account. Still, it says something when Pritchett’s failure to condemn all aid casts him as an aid optimist.
When Argentina, a faithful adapter of the Washington Consensus, defaulted on its foreign debt in 2001 — two decades after Mexico — it rang down the curtain on another age of failed prescriptions. By then Pritchett was on leave at Harvard, teaching alongside other chastened economists. No one was fully satisfied with the Washington Consensus anymore, at least not as a prescription for growth. But no consensus had taken its place. The gains from increased trade, though sizable in many economists’ view, had mostly taken place. Aid and debt relief were generally seen as limited tools. The whole notion of big ideas was out of favor. “So little seems to work,” Pritchett warned in an article — “What’s the Big Idea” — that disparaged big ideas. Yet he was mulling a big idea of his own. True to form, it was a stink-bomb-in-the-bathroom kind of idea: an assault on the morality of borders.
The basics are simple: The rich world has lots of well-paying jobs and an aging population that cannot fill them. The poor world has desperate workers. But while goods and capital can easily cross borders, modern labor cannot. This strikes Pritchett as bad economics and worse social justice. He likens the limits on labor mobility to “apartheid on a global scale.” Think Desmond Tutu with equations.
Pritchett sees five irresistible forces for migration, stymied by eight immovable ideas. The most potent migration force is the one epitomized by Nepal: vast inequality. In the late 19th century, rich countries had incomes about 10 times greater than the poorest ones. Today’s ratio is about 50 to 1, Pritchett writes in “Let Their People Come.” The poor simply have too much to gain from crossing borders not to try. What arrests them are the convictions of rich societies: that migration erodes domestic wages, courts cultural conflicts and is unnecessary for — perhaps antithetical to — foreign development. When irresistible force meets immovable object, something gives — in this case legality. Migration goes underground, endangering migrants and lessening their rewards.
The key to breaking the political deadlock, Pritchett says, is to ensure that the migrants go home, which is why he emphasizes temporary workers (though personally he would let them stay). About 7 percent of the rich world’s jobs are held by people from developing countries. For starters, he would like to see the poor get another 3 percent, or 16 million guest-worker jobs — 3 million in the U.S. They would stay three to five years, with no path to citizenship, and work in fields with certified labor shortages. He assumes that most receiving countries would not allow them to bring families. Taxpayers would be spared from educating the migrants’ kids. Domestic workers would gain some protection through the certification process. And a revolving labor pool would reach more of the world’s poor.
In effect, Pritchett is proposing a Saudi Arabian plan in which an affluent society creates a labor subcaste that is permanently excluded from its ranks. His does so knowing full well that his agenda coincides with that of unscrupulous employers looking to exploit cheap workers. Many migration advocates oppose a plan, now dividing Congress, to create a guest-worker force a 15th as large as the one Pritchett wants, saying it would create a new underclass. But Pritchett calls guest work the only way to accommodate large numbers. To insist that migrants have a right to citizenship and family unification, he says, is to let men like Gure Sarki go hungry. It is cruel to be kind. The choice is theirs. Let the poor decide. “Letting guest workers in America doesn’t create an underclass,” he says. “It moves an underclass and makes the underclass better off.”
Part of Pritchett’s argument is mathematical. Drawing on World Bank models, he estimates his plan would produce annual gains of about $300 billion — three times the benefit of removing the remaining barriers to trade. But the philosophical packaging gives his plan its edge. Pritchett assails a basic premise — that development means developing places. He is more concerned about helping Nepalis than he is about helping Nepal. If remittances spur development back home, great, but that is not his central concern. “Migration is development,” he says.
Indeed, Pritchett attacks the primacy of nationality itself, treating it as an atavistic prejudice. Modern moral theory rejects discrimination based on other conditions of birth. If we do not bar people from jobs because they were born female, why bar them because they were born in Nepal? The name John Rawls appears on only a single page of “Let Their People Come,” but Pritchett is taking Rawlsian philosophy to new lengths. If a just social order, as Rawls theorized, is one we would embrace behind a “veil of ignorance” — without knowing what traits we possess — a world that uses the trait of nationality to exclude the neediest workers from the richest job markets is deeply unjust. (Rawls himself thought his theory did not apply across national borders.) Pritchett’s Harvard students rallied against all kinds of evils, he writes, but “I never heard the chants, ‘Hey, ho, restrictions on labor mobility have to go.’ ”
Even friends fear he has not come to grips with the numbers. The West is nowhere close to accepting Pritchett’s 16 million — and the developing world has a labor force of nearly 3 billion; what if most of them moved? “I think Lant overdoes it in estimating migration’s potential,” said Nancy Birdsall, president of the Center for Global Development in Washington, which commissioned and published the book. “Do you think the U.S. would accept 300 million of the world’s poorest people?” Birdsall praises Pritchett’s work as a conversation starter but adds, “People think about development as being about place not person — they’re more right about this than Lant believes.”
One of those people is Jeffrey D. Sachs, director of the Earth Institute at Columbia University. “There’s no way that migration is going to substitute for economic development at home,” he told me recently. Pritchett’s willingness to abide more family separation reddens Sach’s face. Separation has spread adultery, divorce and AIDS across the developing world. “It’s tragic!” he said. “Let them come as a family! Having tens of millions of men separated from their families in temporary living conditions is hardly going to be conducive to the kind of world we’re aiming to build.”
Lawrence Summers, Pritchett’s old mentor, said Pritchett’s book may be like Milton Friedman’s “Capitalism and Freedom,” which seemed “lunatic in the moment” but won converts with time. Still, he wonders if the West can create migrant subcastes without compromising its values and fears that voluntary compacts do not solve the moral problem; we do not let people volunteer to sell body parts or work in unsafe mines. “Lant’s kind of compassionate libertarianism carries the risk of a morally problematic coarsening that we resist in many other ways,” he said. He is open to guest-worker experiments but wonders about their “sustainability.”
Those are migration allies. People who think migration is too high — 12 percent of Americans are foreign-born — say that Pritchett is prescribing cultural suicide. “All guest-worker programs result in permanent settlement,” says Mark Krikorian of the Center for Immigration Studies, a Washington group that seeks less immigration. Some workers will overstay their visas, he warns. Advocates and employers will lobby for extensions. And guest workers will increase illegal immigration by attracting relatives and friends. Krikorian fears that immigrants are already forming parallel societies whose numbers do not even bother to learn English; adding to the 36 million already here, he said, would speed the cultural secession. “You’d have more ‘Press 2 for Swahili,’ no question about that,” he says. “It’d be a complete catastrophe.”
Pritchett responds in character — defiantly. Moral coarsening? “We’re already being morally coarsened by allowing people to live as fourth-class citizens in the rest of the world,” Pritchett says. “We’re just not forced to confront it.” Scale? Yes, his plan would start small (by global terms), but Pritchett argues that it contains the seeds of its own expansion. With lots of old people to support, rich countries will “get hooked on” the migrants’ labor and especially on the taxes they pay into retiree health and pension funds. And if, as critics fear, the migrants stay, then yes, Pritchett does believe the U.S. could eventually swallow 300 million of the global poor. “It’s a big, empty country,” he says.
With more access to global labor markets, Pritchett predicts some poor countries will develop quickly while others, like Zambia, will depopulate into giant ghost towns as the world grows comfortable with higher levels of permanent migration. Eventually — over a century, say — the combination of population adjustments and policy innovation will raise the living standards of most poor countries to that of the West without pulling the West down, just as the rise of the Japanese has not meant the fall of Americans. The labor forces of the West are shrinking, which, he says, should keep wages high despite increased migration. Whether or not his forecasts are correct — the track record of his field is not reassuring — he has pondered the economics.
But the greatest risk posed by the Pritchett plan is cultural conflict, or even conflagration, which Pritchett greets with a shrug. “I don’t think about it a lot because I’m an economist,” he says. “If you say your culture can’t survive an influx of migrants, you have a pretty dim view of your culture.” Cultures change all the time, he figures, and change is not to be feared. A century hence, nations will still exist, but in a more ecumenical way. Germans will accept Turkish mosques, and Turkey will accept Christian spires, and everyone will be free to come and go as long as they obey the law. Here he sounds less like Adam Smith than Rodney King: “Can’t we all just get along?”
So far, in the U.S., at least, the answer has been yes: acculturation has triumphed in every generation, despite the doubters. But Pritchett envisions cultural blending on an unprecedented scale, across societies much less skillful at it. Israel and Palestine, Hutu and Tutsi, Bosnian and Serb — the world is not exactly galloping away from the ethnic and nationalist identities that he finds anachronistic. With an Ellis Island heart in a sleeper-cell age, Pritchett is reluctant to consider the possibility that the interests of the West and its would-be migrants could diverge. “If you say you believe in open borders, you sound like a lunatic — I’m aware of that,” he says. “I’m saying let’s start slow and let what’s already happening happen in a managed way. A hundred years is a long time. We can work it out.”
On his last day in rural Nepal, Pritchett hiked down a parched canyon to find another group of earnest villagers awaiting him with a report. Along with buying 55 goats, the Chaurmuni group planted 182 trees and built two toilets. Everything about the gathering seemed familiar, except the group’s chairman — Gure Sarki — whose shirt had such gaping holes they bared his shoulders to the sun. He wore a black knit cap yet shivered in the heat, and a boil-like growth the size of an egg rose from his forehead. For all his striking need, he was ruggedly handsome, as if the great Karmic wheel had reincarnated Clint Eastwood as a Nepali goat farmer. Pritchett and I spent the morning at his house.
Sarki, 52, is an Untouchable whose family had lived in Chaurmuni for at least 100 years. Chronically hungry in his early 20s, he walked nine days to an Indian border town with road-building work. He stayed three years and bought a little land, but returned home after his father’s death at his grieving mother’s request. Sarki’s half-acre inheritance was too small to feed his children, so he worked for others when he could and borrowed when he had to at the village interest rate of 36 percent. He pointed to a reedy teenage son and boasted that he fed him three daily meals. “I would like to eat three times a day, but I am feeding the children,” he said. (Pritchett, wincing, whispered, “I’m almost certain this boy is malnourished.”) On one level, the story confirmed Pritchett’s view: migration, even to India, had helped Sarki more than anything else. But he did not leave again. “I like this place,” he said. “I have brothers and sisters here.” Staying or going — each involved pain.
A low-caste, underfed goat farmer, in a place with per capita income of $90 a year, Sarki is global inequality corporealized. He has never seen a bathtub. He has never been to a dentist. He has never owned a pair of glasses and squints to see his feet. He said the boil on his head has been there 30 years. and he did not know what caused it. When I told him the average American lived on about two million rupees a year, $25,000, he laughed as if hearing a fable. “That is like a story to us,” he said. He thanked us for coming and asked how to do better. Pritchett stammered. “What can you say, Be born in America?” he said to me. Then speaking through a translator, Pritchett assured Sarki that few Americans could manage with so little. Sarki smiled.
The jeep was quiet as we drove away, as if the sheer abjectness of Sarki’s poverty negated the meaning of anything that could be said about it. When we paused at a teahouse an hour later, I asked why Americans should care — so what if there are destitute goat farmers on the other side of the world? “I dislike arguments that try to give self-interested explanations: ‘We should care because they’ll become terrorists,’ ” Pritchett said. “I think we should care just because they’re human beings. The arc of human history has been the broadening of the scope of moral concern.”
Just then the power grid failed, leaving Pritchett in the dark as he recalled a college graduation speech — his wife’s — that urged classmates to meet the gazes of beggars. “The poverty of the poor is so desperate, it creates a situation that most of us are incapable of looking in the eye,” he said. “You don’t want to realize they’re human beings just like you.” Rich countries have jobs. Poor people need work. In Pritchett’s proudly eccentric view, to dwell on anything else is to blink and turn away.
Jason DeParle, a senior writer for The Times, last wrote for the magazine about labor migration from the Philippines.
Roundup of Economic & Business News (May 28 - Jun 8)
May 28
Water level dips at Kulekhani (eKantipur.com)
NA starts road construction (eKantipur.com)
Garment production shifting overseas (eKantipur.com)
Industrialists warn of protests (eKantipur.com)
Record high revenue growth (eKantipur.com)
Sri Lankan to resume flights (eKantipur.com)
India to triple assistance to Nepal (Nepalbiznews.com)
Tourism meet organised in London (Nepalnews.com)
Ozark Gear opens shop (Nepalnews.com)
May 29
Settle dues for normal oil supply: India (eKantipur.com)
Martelli new regional director of IFC (eKantipur.com)
ADB-N's financial cracks another time bomb: Governor (eKantipur.com)
Meager rise in overseas employment (eKantipur.com)
CDMA phone to get full mobility (Nepalbiznews.com)
Industrialists of Butwal warn of struggle against the Maoists (Nepalbiznews.com)
May 30
WB suspends funds for financial sector reform (eKantipur.com)
‘Focus on infrastructure development’ (eKantipur.com)
Nokia names authorized distributors for Nepal (eKantipur.com)
Agitating teachers and private schools sign a deal (Nepalbiznews.com)
May 31
Nepali embassy in Israel (eKantipur.com)
Repair delays to disturb NAC's operation (eKantipur.com)
MoAC demands Rs 5b budget (eKantipur.com)
Potato prices see steep climb (eKantipur.com)
Development spending sluggish (eKantipur.com)
NOC pays Rs 1b to IOC (eKantipur.com)
Parliamentary panel urges the government to form land commission (Nepalbiznews.com)
Govt. to make changes in policy of foreign employment and transport sector
June 1
Crowded city pushes banks to rural areas (eKantipur.com)
Hetauda Cement shuts down (eKantipur.com)
Govt to widen inbound facility (eKantipur.com)
NFIN called bandh cripples life across the nation (Nepalbiznews.com)
FNCCI to hold its 41st AGM (Nepalnews.com)
June 2
Labor pact with South Korea within a month (eKantipur.com)
ADB gives four options for fast track route (eKantipur.com)
June 3
NRB freezes Space Time account (eKantipur.com)
Surya Nepal, best managed company in Nepal (eKantipur.com)
June 4
We will renegotiate West Seti: Mahat (eKantipur.com)
US proposes duty-free facility (eKantipur.com)
Pashmina entrepreneurs see good prospects (eKantipur.com)
Employment in Israel, Govt requests relief for stranded workers (eKantipur.com)
Fourth SASEC meet to discuss economic cooperation (Nepalbiznews.com)
June 5
Govt lifting ban on camouflage clothing (eKantipur.com)
Imported grain jack up chicken price (eKantipur.com)
USAID to focus on vocational training (eKantipur.com)
Industrial Security Force to be formed (Nepalbiznews.com)
Entrepreneurs close down Birgunj (Nepalbiznews.com)
CNI urges dynamic and inclusive industrial policy (Nepalbiznews.com)
Media experts stress timely reform in media laws (Nepalnews.com)
June 6
NEPSE index hits all time high, Gains Rs 68b in a year (eKantipur.com)
NTA examines UTL's appeal (eKantipur.com)
Mill defers payment to farmers (eKantipur.com)
Disclose food importer names: Officials, retailers (eKantipur.com)
Govt raises milk price (eKantipur.com)
Govt. welcomes NRN's investment in hydropower: Minister Karki (Nepalbiznews.com)
Govt. to connect 1007 VDCs with phone within ten months: Mahara (Nepalbiznews.com)
Madheshi Tigers' strike hits Terai life (Nepalnews.com)
June 7
ADBL seeks to reduce non-performing loans (eKantipur.com)
Garment export falls to 60 percent in May (Nepalbiznews.com)
Eastern Taplejung faces food shortage (Nepalbiznews.com)
Govt. seeks new relation with ADB for Melamchi (Nepalbiznews.com)
Nepal-India power exchange committee meet kicks off in Kathmandu (Nepalnews.com)
Govt hands over Rs 92.5 million as salary for PLA (Nepalnews.com)
June 8
ADB seeks reform at water utility (eKantipur.com)
India to offer Nepal another 40 MWs (eKantipur.com)
FOREIGN EMPLOYMENT: Recovery rate of swindled money low (eKantipur.com)
Nepal's forex reserve hits Rs 171 billion (eKantipur.com)
Nepal Investment Bank sets up a new branch (Nepalbiznews.com)
Yami says govt ready to explore all options for reviving Melamchi (Nepalnews.com)
Bandh affects Pokhara and Janakpur (Nepalnews.com)
Japan to provide $60 m for construction of New Kawasoti Sub-station (Nepalnews.com)
(Nepalbiznews.com)
Water level dips at Kulekhani (eKantipur.com)
NA starts road construction (eKantipur.com)
Garment production shifting overseas (eKantipur.com)
Industrialists warn of protests (eKantipur.com)
Record high revenue growth (eKantipur.com)
Sri Lankan to resume flights (eKantipur.com)
India to triple assistance to Nepal (Nepalbiznews.com)
Tourism meet organised in London (Nepalnews.com)
Ozark Gear opens shop (Nepalnews.com)
May 29
Settle dues for normal oil supply: India (eKantipur.com)
Martelli new regional director of IFC (eKantipur.com)
ADB-N's financial cracks another time bomb: Governor (eKantipur.com)
Meager rise in overseas employment (eKantipur.com)
CDMA phone to get full mobility (Nepalbiznews.com)
Industrialists of Butwal warn of struggle against the Maoists (Nepalbiznews.com)
May 30
WB suspends funds for financial sector reform (eKantipur.com)
‘Focus on infrastructure development’ (eKantipur.com)
Nokia names authorized distributors for Nepal (eKantipur.com)
Agitating teachers and private schools sign a deal (Nepalbiznews.com)
May 31
Nepali embassy in Israel (eKantipur.com)
Repair delays to disturb NAC's operation (eKantipur.com)
MoAC demands Rs 5b budget (eKantipur.com)
Potato prices see steep climb (eKantipur.com)
Development spending sluggish (eKantipur.com)
NOC pays Rs 1b to IOC (eKantipur.com)
Parliamentary panel urges the government to form land commission (Nepalbiznews.com)
Govt. to make changes in policy of foreign employment and transport sector
June 1
Crowded city pushes banks to rural areas (eKantipur.com)
Hetauda Cement shuts down (eKantipur.com)
Govt to widen inbound facility (eKantipur.com)
NFIN called bandh cripples life across the nation (Nepalbiznews.com)
FNCCI to hold its 41st AGM (Nepalnews.com)
June 2
Labor pact with South Korea within a month (eKantipur.com)
ADB gives four options for fast track route (eKantipur.com)
June 3
NRB freezes Space Time account (eKantipur.com)
Surya Nepal, best managed company in Nepal (eKantipur.com)
June 4
We will renegotiate West Seti: Mahat (eKantipur.com)
US proposes duty-free facility (eKantipur.com)
Pashmina entrepreneurs see good prospects (eKantipur.com)
Employment in Israel, Govt requests relief for stranded workers (eKantipur.com)
Fourth SASEC meet to discuss economic cooperation (Nepalbiznews.com)
June 5
Govt lifting ban on camouflage clothing (eKantipur.com)
Imported grain jack up chicken price (eKantipur.com)
USAID to focus on vocational training (eKantipur.com)
Industrial Security Force to be formed (Nepalbiznews.com)
Entrepreneurs close down Birgunj (Nepalbiznews.com)
CNI urges dynamic and inclusive industrial policy (Nepalbiznews.com)
Media experts stress timely reform in media laws (Nepalnews.com)
June 6
NEPSE index hits all time high, Gains Rs 68b in a year (eKantipur.com)
NTA examines UTL's appeal (eKantipur.com)
Mill defers payment to farmers (eKantipur.com)
Disclose food importer names: Officials, retailers (eKantipur.com)
Govt raises milk price (eKantipur.com)
Govt. welcomes NRN's investment in hydropower: Minister Karki (Nepalbiznews.com)
Govt. to connect 1007 VDCs with phone within ten months: Mahara (Nepalbiznews.com)
Madheshi Tigers' strike hits Terai life (Nepalnews.com)
June 7
ADBL seeks to reduce non-performing loans (eKantipur.com)
Garment export falls to 60 percent in May (Nepalbiznews.com)
Eastern Taplejung faces food shortage (Nepalbiznews.com)
Govt. seeks new relation with ADB for Melamchi (Nepalbiznews.com)
Nepal-India power exchange committee meet kicks off in Kathmandu (Nepalnews.com)
Govt hands over Rs 92.5 million as salary for PLA (Nepalnews.com)
June 8
ADB seeks reform at water utility (eKantipur.com)
India to offer Nepal another 40 MWs (eKantipur.com)
FOREIGN EMPLOYMENT: Recovery rate of swindled money low (eKantipur.com)
Nepal's forex reserve hits Rs 171 billion (eKantipur.com)
Nepal Investment Bank sets up a new branch (Nepalbiznews.com)
Yami says govt ready to explore all options for reviving Melamchi (Nepalnews.com)
Bandh affects Pokhara and Janakpur (Nepalnews.com)
Japan to provide $60 m for construction of New Kawasoti Sub-station (Nepalnews.com)
(Nepalbiznews.com)
India to offer Nepal another 40 MWs
India to offer Nepal another 40 MWs
eKantipur.com, 8-Jun-2007
BY BIKASH SANGRAULA
India's Central Electricity Authority (CEA) has agreed to upgrade the Duhabi-Kataiya cross border transmission link by October this year to allow Nepal to import an additional 40 megawatts of electricity from the southern neighbor on a commercial basis.
During the last dry season, Nepal imported up to 80 megawatts from India, including 50 megawatts from the Duhabi-Kataiya link.
"With the import of 40 additional megawatts, Nepal will not face worse load-shedding in the coming dry season than it did in the last dry season," said Arjun Kumar Karki, managing director of Nepal Electricity Authority (NEA), who led the Nepalese team in the eighth Indo-Nepal Power Exchange Committee meeting that concluded in Kathmandu on Friday.
Similarly, the two countries have agreed on a power exchange tariff of Rs 5.7 (IRs 3.59). The average tariff NEA charges to customers is Rs 6.7.
The tariff will be applicable to both the power exported to India and imported from India. Also, the annual increment of tariff has been reduced from the existing 8.5 percent flat, to 5 percent till June 2008, and 5.5 percent thereafter till June 2009, after which it will again be revised.
Nepal will now be paying its outstanding dues to electricity boards in several neighboring Indian states based on the new tariff rate. According to a member in the Indian delegation, the revision of the annual increment in tariff means that Nepal's outstanding dues to India for imported electricity has gone down from IRs 100 crores to IRs 85 crores.
NEA's Karki added that it was also agreed in the meeting to allow NEA to sell to India, on a commercial basis, the free energy Nepal gets from the 120 megawatt Tanakpur hydroelectric project.
Nepal gets 70 million units of free power from Tanakpur. However, as much as one-third of the electricity was being wasted as there is little load in Nepalese territory near the Tanakpur project.
"Now, NEA can sell the unused energy in the Indian market on a commercial basis," said Karki.
Additionally, it has been agreed that Nepal can export some 40 megawatt of excess power to India during wet season on a commercial basis through the Gandak-Ramnagar transmission link.
The two countries have also agreed to dismantle five of the 21 existing cross border transmission links, which are currently in disuse.
Constituted in 1991, the Indo-Nepal Power Exchange Committee was supposed to meet once every year. However, it was not held for four long years after the seventh meeting in 2003.
The Indian delegation for the eighth meeting was led by V Ramakrishnan, member of CEA, India.
eKantipur.com, 8-Jun-2007
BY BIKASH SANGRAULA
India's Central Electricity Authority (CEA) has agreed to upgrade the Duhabi-Kataiya cross border transmission link by October this year to allow Nepal to import an additional 40 megawatts of electricity from the southern neighbor on a commercial basis.
During the last dry season, Nepal imported up to 80 megawatts from India, including 50 megawatts from the Duhabi-Kataiya link.
"With the import of 40 additional megawatts, Nepal will not face worse load-shedding in the coming dry season than it did in the last dry season," said Arjun Kumar Karki, managing director of Nepal Electricity Authority (NEA), who led the Nepalese team in the eighth Indo-Nepal Power Exchange Committee meeting that concluded in Kathmandu on Friday.
Similarly, the two countries have agreed on a power exchange tariff of Rs 5.7 (IRs 3.59). The average tariff NEA charges to customers is Rs 6.7.
The tariff will be applicable to both the power exported to India and imported from India. Also, the annual increment of tariff has been reduced from the existing 8.5 percent flat, to 5 percent till June 2008, and 5.5 percent thereafter till June 2009, after which it will again be revised.
Nepal will now be paying its outstanding dues to electricity boards in several neighboring Indian states based on the new tariff rate. According to a member in the Indian delegation, the revision of the annual increment in tariff means that Nepal's outstanding dues to India for imported electricity has gone down from IRs 100 crores to IRs 85 crores.
NEA's Karki added that it was also agreed in the meeting to allow NEA to sell to India, on a commercial basis, the free energy Nepal gets from the 120 megawatt Tanakpur hydroelectric project.
Nepal gets 70 million units of free power from Tanakpur. However, as much as one-third of the electricity was being wasted as there is little load in Nepalese territory near the Tanakpur project.
"Now, NEA can sell the unused energy in the Indian market on a commercial basis," said Karki.
Additionally, it has been agreed that Nepal can export some 40 megawatt of excess power to India during wet season on a commercial basis through the Gandak-Ramnagar transmission link.
The two countries have also agreed to dismantle five of the 21 existing cross border transmission links, which are currently in disuse.
Constituted in 1991, the Indo-Nepal Power Exchange Committee was supposed to meet once every year. However, it was not held for four long years after the seventh meeting in 2003.
The Indian delegation for the eighth meeting was led by V Ramakrishnan, member of CEA, India.
Garment export falls to 60 percent in May
Garment export falls to 60 percent in May
Nepalbiznews.com, 7-Jun-2007
Fall in the export of Nepali readymade garments to the United States, the single largest market to Nepali apparel, is continued for the month of May with massive decline of 60 percent.
It is the fifth consecutive month this year that export of Nepali textile and apparel products lost ground. Garment exports to the US has been suffering from the very beginning of the year, witnessing a whopping decline of 54 per cent in January, 64 per cent in February, 47 per cent in March and three per cent in April.
The industry is in doldrums for the last couple of years, following the termination of quota regime under multi-fibre arrangement (MFA) in January 2005.
Exports had suffered a loss of 30 per cent in 2004 and rose to 41 per cent in 2005. However, it slowed down with a marginal drop of six per cent in 2006. As the US alone absorbs more than 80 per cent of the total Nepali garment exports, the single market concentration is blamed for such a plummet.
Garment and apparel products valued at over $2.25 million were exported to the US on May 2007, whereas garment products worth over $5.60 million were exported last year, reveals figures provided by the Garment Association of Nepal (GAN), Wednesday.
Continuous fall in exports indicates a difficult time ahead for Nepali garment manufacturers and exporters, as markets have already been opened for all competitors without quota restrictions, an exporter said.
He urged for enhancing the competitive strength of Nepali products to compete with big suppliers from India and China and other strong players like Bangladesh and Pakistan.
According to quantitative analysis, altogether 2152 kg of the commodity were exported during the month, whereas the figure for May 2006 stood at 11714.8 kg.
Besides building up competitive strength, diversification of markets and products has remained a major challenge.
Nepalbiznews.com, 7-Jun-2007
Fall in the export of Nepali readymade garments to the United States, the single largest market to Nepali apparel, is continued for the month of May with massive decline of 60 percent.
It is the fifth consecutive month this year that export of Nepali textile and apparel products lost ground. Garment exports to the US has been suffering from the very beginning of the year, witnessing a whopping decline of 54 per cent in January, 64 per cent in February, 47 per cent in March and three per cent in April.
The industry is in doldrums for the last couple of years, following the termination of quota regime under multi-fibre arrangement (MFA) in January 2005.
Exports had suffered a loss of 30 per cent in 2004 and rose to 41 per cent in 2005. However, it slowed down with a marginal drop of six per cent in 2006. As the US alone absorbs more than 80 per cent of the total Nepali garment exports, the single market concentration is blamed for such a plummet.
Garment and apparel products valued at over $2.25 million were exported to the US on May 2007, whereas garment products worth over $5.60 million were exported last year, reveals figures provided by the Garment Association of Nepal (GAN), Wednesday.
Continuous fall in exports indicates a difficult time ahead for Nepali garment manufacturers and exporters, as markets have already been opened for all competitors without quota restrictions, an exporter said.
He urged for enhancing the competitive strength of Nepali products to compete with big suppliers from India and China and other strong players like Bangladesh and Pakistan.
According to quantitative analysis, altogether 2152 kg of the commodity were exported during the month, whereas the figure for May 2006 stood at 11714.8 kg.
Besides building up competitive strength, diversification of markets and products has remained a major challenge.
NEPSE index hits all time high, Gains Rs 68b in a year
NEPSE index hits all time high, Gains Rs 68b in a year
eKantipur.com, 6-Jun-2007
BY KRISHNA REGMI
The stock market rose to a historic high Wednesday amid soaring speculative buying and investors' expectations that the economy will gain momentum with the ending of the 11-year old conflict.
The Nepal Stock Exchange (NEPSE) rose 5.82 points to close at 549.96 points at today's transactions, supported by growing share prices of commercial banks. The new record beats earlier all-time-high of 545.82 points registered in the fiscal year 2000/01.
The stock market today gained nearly two billion rupees in its market capitalization -- the value of listed shares. It reached over Rs 148.84 billion.
After Janaandolan-II which overthrew the King's direct rule 13 months ago, the market has continued to stay on an upward trajectory. Since then, the stock market has gained a staggering 200 points in its index. Likewise, market capitalization has expanded by over 68 billion rupees.
This means investors who bet their money in shares immediately after the installation of democratic government have already earned a return of 85 percent over what they invested.
“I earned more than Rs 100,000 from my petty investments in shares in a year,” said Mohan Rai, a small investor. But, he says he does not know why the equity market is doing so well.
“I put money in shares just because others are earning from it. And I am happy that share prices of Everest and Investment Bank, where I have invested, are on the rise,” he said.
In an attempt to quell the unnecessary rise, the stock market today halted the trading of the National Hydro Power shares, immediately after its share prices began to cross over 10 percent mark.
Nepal's stock market is dominated by commercial banks and movement of their share prices largely cause the market to go up and down. Of the listed 133 companies, 15 banks make up around 70 percent of the total market capitalization.
Ishwori Rimal, a broker, said that investor confidence has grown with the return of peace in the country. “In addition, there are still no other good investment opportunities. So, people are increasingly locking their money in equities,” he said.
He said the recent policy of the central bank which requires commercial banks to raise their paid-up capital to two billion rupees has heightened investors' expectations to get more bonus shares. This has driven share prices upward.
However, Radhesh Pant, president of Nepal Bankers' Association said that it was not a reasonable cause to justify the rise in share prices.
“I do not believe share prices should go up when paid-up capital of banks is raised. When the banks provide stock dividend, the value of company does not ramp up, it declines rather,” said Radhesh Pant, president of Nepal Bankers Association.
eKantipur.com, 6-Jun-2007
BY KRISHNA REGMI
The stock market rose to a historic high Wednesday amid soaring speculative buying and investors' expectations that the economy will gain momentum with the ending of the 11-year old conflict.
The Nepal Stock Exchange (NEPSE) rose 5.82 points to close at 549.96 points at today's transactions, supported by growing share prices of commercial banks. The new record beats earlier all-time-high of 545.82 points registered in the fiscal year 2000/01.
The stock market today gained nearly two billion rupees in its market capitalization -- the value of listed shares. It reached over Rs 148.84 billion.
After Janaandolan-II which overthrew the King's direct rule 13 months ago, the market has continued to stay on an upward trajectory. Since then, the stock market has gained a staggering 200 points in its index. Likewise, market capitalization has expanded by over 68 billion rupees.
This means investors who bet their money in shares immediately after the installation of democratic government have already earned a return of 85 percent over what they invested.
“I earned more than Rs 100,000 from my petty investments in shares in a year,” said Mohan Rai, a small investor. But, he says he does not know why the equity market is doing so well.
“I put money in shares just because others are earning from it. And I am happy that share prices of Everest and Investment Bank, where I have invested, are on the rise,” he said.
In an attempt to quell the unnecessary rise, the stock market today halted the trading of the National Hydro Power shares, immediately after its share prices began to cross over 10 percent mark.
Nepal's stock market is dominated by commercial banks and movement of their share prices largely cause the market to go up and down. Of the listed 133 companies, 15 banks make up around 70 percent of the total market capitalization.
Ishwori Rimal, a broker, said that investor confidence has grown with the return of peace in the country. “In addition, there are still no other good investment opportunities. So, people are increasingly locking their money in equities,” he said.
He said the recent policy of the central bank which requires commercial banks to raise their paid-up capital to two billion rupees has heightened investors' expectations to get more bonus shares. This has driven share prices upward.
However, Radhesh Pant, president of Nepal Bankers' Association said that it was not a reasonable cause to justify the rise in share prices.
“I do not believe share prices should go up when paid-up capital of banks is raised. When the banks provide stock dividend, the value of company does not ramp up, it declines rather,” said Radhesh Pant, president of Nepal Bankers Association.
Imported grain jack up chicken price
Imported grain jack up chicken price
eKantipur.com, 5-Jun-07
Lack of domestic production of major grain ingredients of chicken feed is pushing up chicken price beyond the reach of ordinary people, said experts at a program. The program is part of 16 commodity-wise events being organized jointly by National Agriculture Research and Development Fund (NARDF) and Agri-Business and Trade Promotion Multi-Purpose Cooperative (ABTRACO).
Dr Tilchandra Bhattarai, president of World Poultry Science Association-Nepal, said that nearly two billion rupees worth of maize, soyabean cake, sesame cake and sunflower cake were imported in this fiscal year alone. “These can be easily produced locally which can not only drive down the prices of chicken and eggs but also provide a lot of jobs,” he said.
Dr Dinesh Prasad Parajuli, senior livestock development official at the Livestock Production Directorate of Department of Livestock Services, said that imported grains lacked quality. “The high cost of feed has made chicken and eggs a lot more expensive than it should be. Local production of chicken and eggs could address food scarcity in remote parts of the country,” he said.
Bhattarai also called for a reduction in duties and taxes on imported grains as they caused costs go up by nearly 12 percent. “We have to pay Agricultural Development fee and every truck load of grain is charged Rs 10,000 of local development tax,” he said.
Experts asked government, non-government organizations and donor agencies to pay attention to this problem and work to encourage production of major food grains in Nepal.
eKantipur.com, 5-Jun-07
Lack of domestic production of major grain ingredients of chicken feed is pushing up chicken price beyond the reach of ordinary people, said experts at a program. The program is part of 16 commodity-wise events being organized jointly by National Agriculture Research and Development Fund (NARDF) and Agri-Business and Trade Promotion Multi-Purpose Cooperative (ABTRACO).
Dr Tilchandra Bhattarai, president of World Poultry Science Association-Nepal, said that nearly two billion rupees worth of maize, soyabean cake, sesame cake and sunflower cake were imported in this fiscal year alone. “These can be easily produced locally which can not only drive down the prices of chicken and eggs but also provide a lot of jobs,” he said.
Dr Dinesh Prasad Parajuli, senior livestock development official at the Livestock Production Directorate of Department of Livestock Services, said that imported grains lacked quality. “The high cost of feed has made chicken and eggs a lot more expensive than it should be. Local production of chicken and eggs could address food scarcity in remote parts of the country,” he said.
Bhattarai also called for a reduction in duties and taxes on imported grains as they caused costs go up by nearly 12 percent. “We have to pay Agricultural Development fee and every truck load of grain is charged Rs 10,000 of local development tax,” he said.
Experts asked government, non-government organizations and donor agencies to pay attention to this problem and work to encourage production of major food grains in Nepal.
We will renegotiate West Seti: Mahat
We will renegotiate West Seti: Mahat
eKantipur.com, 4-Jun-2007
BY BIKASH SANGRAULA
The government will renegotiate its deal with Australia's Snowy Mountain Engineering Corp (SMEC), developer of the 750 megawatt West Seti project, to revert the provision on benefit to Nepal from cash to 10 percent free energy.
"We will ask them (SMEC) to provide free energy. I am sure they will agree," said Finance Minister Dr Ram Sharan Mahat on Monday.
The government can still renegotiate the project agreement as it is yet to issue a generation license to SMEC, which is expected to take place after the end of the monsoon when the Australian company is commencing construction of the project in Doti district in far-western Nepal.
According to Mahat, the project agreement, which had originally stipulated that SMEC provide 10 percent free energy to Nepal, had been revised in favor of a cash benefit in the course of agreement renewals over the years.
The cash benefit arrangement, which was revealed by the Post on Monday, has an objectionable clause which can have a direct bearing on the security of the benefit for Nepal.
The current agreement with SMEC puts payment to Nepal at low priority.
Clause 2.4 of the existing agreement says, "Money payable from time to time by SMEC to debt participants or for operating costs in connection with the project will have priority in payment over money payable to Nepal, and following payments to debt participants and operating costs if there is insufficient money to pay Nepal, the obligation to pay Nepal will be deferred until SMEC has sufficient funds to make payment."
For the past 10 years, West Seti had been promoted, both by SMEC and the government, as a project that would provide 10 percent free energy to Nepal. This continued till recently despite the fact that the government had revisited all project papers before a cabinet meeting agreed in April 26 this year to an Asian Development Bank (ADB) proposal for Nepal's 15 percent equity participation in the project through an ADB loan.
Parliamentary committee to throw in its weight
The Interim Parliament's Natural Resources and Means Committee, which has initiated an investigation into the the objectionable provisions contained in the agreement with SMEC, will settle for nothing less than reversal of the cash benefit arrangement to free energy.
"The clause related to the cash benefit arrangement demonstrates clear intention of non-payment," said Ananda Pokharel, committee member and interim parliamentarian from the CPN-UML. "We will revert the benefit arrangement to free energy."
Pokharel added that the committee would also assist the government in effecting further revisions in the project agreement, including the provision of additional energy to Nepal on a commercial basis if needed.
West Seti, a storage type project, is designed to supply peaking power to northern India. It's estimated cost is US $ 1.2 billion.
Twenty-six percent equity shares in the project are owned by SMEC, and 15 percent each by China National and Machinery Import and Export Corporation (CMEC), ADB, the government of Nepal, and India's Infrastructure Leasing and Financial Services (IL&FS). On the debt financing side, China Exim Bank is investing US $ 400m, IL&FS US$ 300m, Bank of China US $ 300m, the Industrial and Commercial Bank of China US $ 200m, and ADB US $ 50m.
Holders of the remaining 14 percent shares will be finalized soon, after which SMEC will seek a generation license.
eKantipur.com, 4-Jun-2007
BY BIKASH SANGRAULA
The government will renegotiate its deal with Australia's Snowy Mountain Engineering Corp (SMEC), developer of the 750 megawatt West Seti project, to revert the provision on benefit to Nepal from cash to 10 percent free energy.
"We will ask them (SMEC) to provide free energy. I am sure they will agree," said Finance Minister Dr Ram Sharan Mahat on Monday.
The government can still renegotiate the project agreement as it is yet to issue a generation license to SMEC, which is expected to take place after the end of the monsoon when the Australian company is commencing construction of the project in Doti district in far-western Nepal.
According to Mahat, the project agreement, which had originally stipulated that SMEC provide 10 percent free energy to Nepal, had been revised in favor of a cash benefit in the course of agreement renewals over the years.
The cash benefit arrangement, which was revealed by the Post on Monday, has an objectionable clause which can have a direct bearing on the security of the benefit for Nepal.
The current agreement with SMEC puts payment to Nepal at low priority.
Clause 2.4 of the existing agreement says, "Money payable from time to time by SMEC to debt participants or for operating costs in connection with the project will have priority in payment over money payable to Nepal, and following payments to debt participants and operating costs if there is insufficient money to pay Nepal, the obligation to pay Nepal will be deferred until SMEC has sufficient funds to make payment."
For the past 10 years, West Seti had been promoted, both by SMEC and the government, as a project that would provide 10 percent free energy to Nepal. This continued till recently despite the fact that the government had revisited all project papers before a cabinet meeting agreed in April 26 this year to an Asian Development Bank (ADB) proposal for Nepal's 15 percent equity participation in the project through an ADB loan.
Parliamentary committee to throw in its weight
The Interim Parliament's Natural Resources and Means Committee, which has initiated an investigation into the the objectionable provisions contained in the agreement with SMEC, will settle for nothing less than reversal of the cash benefit arrangement to free energy.
"The clause related to the cash benefit arrangement demonstrates clear intention of non-payment," said Ananda Pokharel, committee member and interim parliamentarian from the CPN-UML. "We will revert the benefit arrangement to free energy."
Pokharel added that the committee would also assist the government in effecting further revisions in the project agreement, including the provision of additional energy to Nepal on a commercial basis if needed.
West Seti, a storage type project, is designed to supply peaking power to northern India. It's estimated cost is US $ 1.2 billion.
Twenty-six percent equity shares in the project are owned by SMEC, and 15 percent each by China National and Machinery Import and Export Corporation (CMEC), ADB, the government of Nepal, and India's Infrastructure Leasing and Financial Services (IL&FS). On the debt financing side, China Exim Bank is investing US $ 400m, IL&FS US$ 300m, Bank of China US $ 300m, the Industrial and Commercial Bank of China US $ 200m, and ADB US $ 50m.
Holders of the remaining 14 percent shares will be finalized soon, after which SMEC will seek a generation license.
ADB gives four options for fast track route
ADB gives four options for fast track route
eKantipur.com, 2-Jun-2007
In order to develop a fast track route to connect the capital with the terai, Asian Development Bank (ADB) has put forward four options to Nepal.
Among these options, suggested by a consultancy team of the bank that visited Nepal recently, are Hetauda tunnel road, Bagmati corridor road, and a road using half section of Bagmati corridor.
“The preliminary estimated cost for fast track through Bagmati corridor is Rs 9.75 billion (US$ 150 million) and Rs 22.75 billion (US$ 350 million) for Hetauda tunnel road,” said Kamal Raj Pandey, joint secretary, at the Ministry of Physical Planning and Construction.
He said the best option will be selected by considering various aspects like environment, pollution, forests, and rivers. "We are currently working out to choose the best option," he said.
After the construction of the track, the travel time to Kathmandu from Hetauda is expected to shorten to two hours from the existing around seven hours.
A source at the Ministry said the ADB is ready to contribute around Rs 35 million for the fast-track route. "The rest will be arranged through other donors. Earlier, Japan extended technical assistance of Rs 55 million (US$ 0.85 million) in order to carry out feasibility study for the construction of the fast-track route.
eKantipur.com, 2-Jun-2007
In order to develop a fast track route to connect the capital with the terai, Asian Development Bank (ADB) has put forward four options to Nepal.
Among these options, suggested by a consultancy team of the bank that visited Nepal recently, are Hetauda tunnel road, Bagmati corridor road, and a road using half section of Bagmati corridor.
“The preliminary estimated cost for fast track through Bagmati corridor is Rs 9.75 billion (US$ 150 million) and Rs 22.75 billion (US$ 350 million) for Hetauda tunnel road,” said Kamal Raj Pandey, joint secretary, at the Ministry of Physical Planning and Construction.
He said the best option will be selected by considering various aspects like environment, pollution, forests, and rivers. "We are currently working out to choose the best option," he said.
After the construction of the track, the travel time to Kathmandu from Hetauda is expected to shorten to two hours from the existing around seven hours.
A source at the Ministry said the ADB is ready to contribute around Rs 35 million for the fast-track route. "The rest will be arranged through other donors. Earlier, Japan extended technical assistance of Rs 55 million (US$ 0.85 million) in order to carry out feasibility study for the construction of the fast-track route.
Hetauda Cement shuts down
Hetauda Cement shuts down
eKantipur.com, 1-Jun-2007
Irregular power supply has forced Hetauda Cement Factory (HCF) to shut down for past one week, creating a crunch in supply in the local market.
Seven hours of load shedding a week has badly affected production, HCF officials said. “We have sufficient raw materials and our machines are functioning. What shall we do when we do not have regular power supply?” asked Ramesh Kumar Aryal, general manager of the factory.
Due to shortage of Hetauda cement in the market, a popular brand, locals are compelled to depend on Indian cement, which is regarded to be of lower quality. HCF has capacity of rolling out 16,000 sacks per day. Last year the factory operated at half the full capacity due to various reasons. The already ailing HCF owes Rs 1 billion to various banks and financial institutions.
eKantipur.com, 1-Jun-2007
Irregular power supply has forced Hetauda Cement Factory (HCF) to shut down for past one week, creating a crunch in supply in the local market.
Seven hours of load shedding a week has badly affected production, HCF officials said. “We have sufficient raw materials and our machines are functioning. What shall we do when we do not have regular power supply?” asked Ramesh Kumar Aryal, general manager of the factory.
Due to shortage of Hetauda cement in the market, a popular brand, locals are compelled to depend on Indian cement, which is regarded to be of lower quality. HCF has capacity of rolling out 16,000 sacks per day. Last year the factory operated at half the full capacity due to various reasons. The already ailing HCF owes Rs 1 billion to various banks and financial institutions.
Meager rise in overseas employment
Meager rise in overseas employment
eKantipur.com, 29-May-2007
The number of workers leaving the country for overseas employment has increased by a meager 3.22 percent during the ten months of 2006/07 compared to same period of last fiscal year.
According to data of Department of Labor and Employment Promotion (DoLEP), a total of 154,940 Nepalis went for foreign employment in 19 countries during the period, as against 150,106 of the corresponding period last year.
However, number of Nepalis leaving for jobs in Malaysia and Qatar, the two most popular labor destinations for Nepali workers, recorded a double-digit decline compared to the same period last year.
The DoLEP data shows, a total of 59,454 Nepalis left for Malaysian jobs during the period. The number was a 14.49 percent decline compared to that of the same period of last fiscal year.
Number of people leaving for jobs in Qatar dropped by about 17 percent and remained at 42,320 during the period.
Officials attributed the labor export decline to Malaysia and Qatar to decline in demand for workers. "Situation like this emerges at times. There is no serious reason behind it," said Keshar Bahadur Pandey, director general of the department.
Saudi Arabia, the third major destination, witnessed two-fold rise in number of Nepali workers arrivals. The number of Nepali workers leaving for jobs in Saudi reached 28,922 during the first ten months of the current fiscal year, whereas it was 13,501 in the same period last year.
Likewise, 1,735 Nepalis left for jobs in Kuwait during the period. The figure was nearly double the figure recorded during the same period last year.
Number of Nepalis leaving for jobs in UAE went up by about 33 percent and touched 18,325. Also, 1,805 Nepalis left for jobs in Bahrain during the period.
The numbers of workers leaving for Israel, the most popular destination of Nepali women workers, on the other hand, nosedived to 436 from 824 of the same period last year.
Government officials attributed the decline in the number of workers heading for Israel to Israeli government's decision to stop issuing fresh visas to Nepali workers effective from May 1, 2007.
Month-wise labor export data shows that number of Nepalis going for overseas job dropped to 18,153 in mid-April to mid-May, the tenth month of the fiscal year.
eKantipur.com, 29-May-2007
The number of workers leaving the country for overseas employment has increased by a meager 3.22 percent during the ten months of 2006/07 compared to same period of last fiscal year.
According to data of Department of Labor and Employment Promotion (DoLEP), a total of 154,940 Nepalis went for foreign employment in 19 countries during the period, as against 150,106 of the corresponding period last year.
However, number of Nepalis leaving for jobs in Malaysia and Qatar, the two most popular labor destinations for Nepali workers, recorded a double-digit decline compared to the same period last year.
The DoLEP data shows, a total of 59,454 Nepalis left for Malaysian jobs during the period. The number was a 14.49 percent decline compared to that of the same period of last fiscal year.
Number of people leaving for jobs in Qatar dropped by about 17 percent and remained at 42,320 during the period.
Officials attributed the labor export decline to Malaysia and Qatar to decline in demand for workers. "Situation like this emerges at times. There is no serious reason behind it," said Keshar Bahadur Pandey, director general of the department.
Saudi Arabia, the third major destination, witnessed two-fold rise in number of Nepali workers arrivals. The number of Nepali workers leaving for jobs in Saudi reached 28,922 during the first ten months of the current fiscal year, whereas it was 13,501 in the same period last year.
Likewise, 1,735 Nepalis left for jobs in Kuwait during the period. The figure was nearly double the figure recorded during the same period last year.
Number of Nepalis leaving for jobs in UAE went up by about 33 percent and touched 18,325. Also, 1,805 Nepalis left for jobs in Bahrain during the period.
The numbers of workers leaving for Israel, the most popular destination of Nepali women workers, on the other hand, nosedived to 436 from 824 of the same period last year.
Government officials attributed the decline in the number of workers heading for Israel to Israeli government's decision to stop issuing fresh visas to Nepali workers effective from May 1, 2007.
Month-wise labor export data shows that number of Nepalis going for overseas job dropped to 18,153 in mid-April to mid-May, the tenth month of the fiscal year.
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