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R&D_NewsBrief_11May
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R&D
Economic Research & Business
Development
1
Date: May 11, 2010
Highlights
Millions of rupees worth of Indian currency (IC) has been flowing out from
Nepal's border districts to India with people depositing money in Indian banks
and buying insurance policies with Indian companies. The massive outflow
has resulted in a shortage of IC to the dismay of traders.
Heavily dependent on the Indian market for purchasing daily essentials,
people along the Nepal-India border are reeling under the shortage of Indian
currency (IC). Reports from various districts bordering India suggest that they
are not getting IC even to go for treatment in India. In some towns, money
changing companies have shut shop due to the IC shortage.
The stalled Community Managed Irrigated Agriculture Sector Project
(CMIASP) is set to get the rolling ball after the Asian Development Bank
(ADB) relaxed some “tough conditions” that hindred its implementation
process. The government had launched the project in 2006 with the ADB loan
of $200 million (Rs. 14 billion) in 35 districts of eastern and central regions.
The total project cost is $380 million.
Spice Nepal, which re-branded Mero Mobile as Ncell on March 12, has come
up with new plans to expand its customer network and services for corporate
clients. Thereafter, Ncell recently introduced a new corporate offer - closed
user groups (CUGs), targeting the corporate and business segment, which
according to Ncell has received very good response from the market and
existing customers.
Gold dealers have been forced to pull down their shutters earlier than usual at
7 p.m. because of lack of security. In the past, trading in gold used to continue
even after 8 p.m.
Nepal Oil Corporation (NOC) has sought Rs 1 billion in loans from the
government to beef up stock of petroleum products, citing political deadlock
and Maoist´s strike threat that could hit supplies in the days to come.
The country's sole secondary on Monday gained 5.75 points to close at 418.77
points. In today's trading session, except the hydropower and insurance, the
indices of all trading groups moved up.
Controversy over the procedure to appoint six labor attaches to different labor
destinations took a new turn on Monday after Commission for the
Investigation of Abuse of Authority (CIAA) took the appointment files under
its control for necessary investigation.
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The big three parties - UCPN (Maoist), Nepali Congress and CPN-UML -
could not sit for fresh round of talks on Monday as the Maoist standing
committee meeting continued till late evening. NC Vice President Ram
Chandra Poudel had requested Maoist Chairman Pushpa Kamal Dahal on
Sunday evening and Monday morning to sit for fresh round of talks.
The Unified Communist Party of Nepal-Maoist (UCPN-M) has decided to be
open about a party leader other than party Chairman Pushpa Kamal Dahal
becoming the next prime minister if the ruling parties agree to a national
consensus government.
The UCPN (Maoist) disrupted the parliament session on Tuesday alleging that
the government suppressed demonstrations held nationwide last week.
Prime Minister Madhav Kumar Nepal on Monday reiterated his commitment
to press freedom and that to creating an environment for the development of
media. He made this vow during a meeting with a delegation of National
Photo Journalists’ Forum (NPJF) at his office in Singha Durbar.
District Development Committee (DDC) Nuwakot has protested the directives
of the Department of Electricity Development (DoED) to use electricity
royalty exclusively in rural electrification project. DDC officials say the move
will affect the development projects being run with the money collected as the
charge for energy use.
Nearly four years after the commencement of the peace process, the political
parties have started serious discussions on the integration and rehabilitation of
Maoist combatants, though the issue is now intricately linked with government
formation.
Impractical taxation policy for gold traders has decreased the gold transaction
volume, blamed the traders. Tej Ratna Shakya, president of Nepal Gold and
Silver Dealers’ Association of Nepal (NEGOSIDA) said that the government
taxation policy is not practical for the traders.
Tourism Crisis Management Committee is actively coming up with plans to
support and facilitate tourists during bandh and strike programmes.
Ten political parties including Unified CPN (Maoist), Madhesi Janadhikar
Forum (MJF) and eight other fringe parties have called for Prime Minister
Madhav Kumar Nepal's immediate resignation to make way for the formation
of a national unity government, Monday.
Unified CPN (Maoist) vice-chairman Dr. Baburam Bhattarai said that the
Constituent Assembly's (CA) term which expires on May 28 will not be
extended till the government makes way for a national government headed by
them.
Foreign diplomats have expressed dissatisfaction at the failure of the
government to take stronger initiative to resolve the current political crisis.
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Stating that the four-year-old peace process was still fragile, European and US
diplomats based in Kathmandu on Monday strongly urged the government not
to close the field offices of the Office of the High Commissioner for Human
Rights (OHCHR). They also urged the government to be flexible while
negotiating with the Maoists, who, they said, had offered a window of
opportunity by withdrawing their strike on Friday.
Some slogans chanted against UCPN (Maoist) Chairman Pushpa Kamal Dahal
have been recorded at the parliamentary meeting on Monday.
BANKING:
Depositors rush to Indian banks
Millions of rupees worth of Indian currency (IC) has been flowing out from Nepal's
border districts to India with people depositing money in Indian banks and buying
insurance policies with Indian companies. The massive outflow has resulted in a
shortage of IC to the dismay of traders.
Many local people and traders have purchased policies from the Life Insurance
Corporation of India. According to bank sources, Nepalis have deposits of Indian Rs.
850 million in the State Bank of India, Rs. 550 million in United Commercial Bank
and Rs. 450 million in the Central Bank of India in the bordering Indian town of
Jogbani. Insurance agents say Nepalis are being lured to Indian insurance companies
because they offer more attractive policies than Nepali companies. The premiums
have to be paid in IC.
Rajesh Sharma, an agent of an Indian insurance company in Biratnagar, said people
have purchased insurance policies for Indian Rs. 50,000 to Rs. 10 million.
There are more than 400 agents of Indian insurance companies like the Life Insurance
Corporation of India, Birla and Max in Biratnagar and surrounding markets. They go
door-to-door on a monthly or quarterly basis to collect premiums from their
customers, said Sharma.
Employees of the State Bank of India, United Commercial Bank and the Central Bank
of India based in bordering Jogbani are working as agents of various insurance
companies. According to Debu Giri, an agent of American Life Insurance Company,
Indian insurance companies collect more than Rs. 10 million in premiums quarterly
from Biratnagar alone.
Economist P.K. Jha said the trend had led to the transfer of millions of rupees in
Indian currency on a monthly basis. "It is unfortunate that the Indian rupees purchased
by selling US dollars goes back to India," he complained.
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According to him, Nepalis have deposits worth Indian Rs. 28-30 billion in various
Indian banks based in Forbesganj, Raxaul and Delhi. Depositors are attracted to
Indian banks as they offer higher interest rates. These Indian banks were offering an
annual interest rate of 7 percent on savings and 12 percent on fixed deposits when
Nepali banks were paying just 4 percent on savings and 9 percent on fixed deposits.
A director of NIC Bank Tulasi Ram Agrawal said that Nepali depositors could not be
lured back to Nepali banks even by offering higher interest rates because of the
political instability in the country.
In the eastern region, IC provided by Nepal Rastra Bank is being used for illegal
transactions. Traders say the IC that the Biratnagar branch of the central bank
provides through its two dozen exchange counters reaches the border points
immediately.
Nepal Rastra Bank's Biratnagar branch releases more than Indian Rs. 900,000 to its
exchange counters. Sources claim that the IC is taken to Indian border towns like
Jogbani, Sikti, Kursakatta, Kasat, Kuwadi and Fulbadia.
Illegal traders need IC to pay their Indian suppliers in cash as they lack official
purchase documents. Goods worth more than Rs. 2 million are smuggled through
Rangeli, Diania, Jhurkia, Betauna, and Aamgachi daily.
Senior vice president of the Morang Merchant Association and a director of NIC
Bank Agrawal said that genuine entrepreneurs were having a hard time obtaining IC
despite strenuous efforts.
Chief manager of the Biratnagar branch of Nepal Rastra Bank Dr. Bhuwanes Prasad
Pant said that the central bank would investigate where the money provided to the
exchange counters was going.
http://www.ekantipur.com/the-kathmandu-post/2010/05/10/business/depositors-rush-
to-indian-banks/208145/
IC crunch beats liquidity crisis
Heavily dependent on the Indian market for purchasing daily essentials, people along
the Nepal-India border are reeling under the shortage of Indian currency (IC).
Reports from various districts bordering India suggest that they are not getting IC
even to go for treatment in India. In some towns, money changing companies have
shut shop due to the IC shortage.
People are compelled to pay as much as Rs. 170 against IRs 100. Understandably,
unscrupulous elements are taking advantage of such a situation by depositing Nepali
currency in Nepali banks and going on to withdraw that amount immediately from
Indian banks in cold IC cash in order to sell the Indian banknotes at a premium in the
Nepali black market.
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Bankers also have admitted to such a tendency on the part of some depositors. “Banks
have nullified the ATM cards of some customers who are into suspicious withdrawals
frequently from ATMs,” said Sashin Joshi, president of Nepal Bankers’ Association
(NBA).
Nepal Investment Bank Limited (NIBL) which has one of the highest ATM
cardholders’ base, stated it cancelled the ATM cards of many of its customers who
were wont to withdraw huge amounts in cash IC frequently right after depositing
money in Nepali currency.
“With the stringent measure taken by the bank, the withdrawal of IC cash from Indian
ATM counters has come down to Rs. 4 million from around Rs. 30 million just a
month ago,” said Prithvi Bahadur Pandey, chief executive officer of NIBL.
Bankers have implemented the policy that they would not permit the withdrawal of
more than IRs 25,000 from Indian ATM counters in a single day as per the decision of
NBA. Earlier, some banks were allowing withdrawals up to Rs. 100,000 a day.
A banker said that some banks had also issued seven to eight ATM cards for a single
account.
After Nepal Rastra Bank (NRB) tightened the screws on IC cash transactions, the
market witnessed a shortage of Indian currency especially in the border areas. “NRB
took this measure to discourage people’s tendency to deposit money in Indian banks
and purchase insurance policies of Indian companies,” said a senior NRB official.
“Because of the cash transaction, the risk of capital flight was a distinct possibility.”
This tendency has also been attributed to the rising demand for IC banknotes that
triggered the shortage in the market.
NRB has already banned purchasing Indian insurance policy and depositing money in
Indian banks. Both NRB and other banks maintained that there was no shortage of IC.
“Genuine importers can get the required amount of IC through TT/draft and other
document based measures,” said the NRB official. Until April 16, NRB had reserves
of IRs 720 million.
o People in border districts can’t go to India for medical treatment
o Money changing firms have shut shop
o People paying NRs. 170 against IRs. 100
o Unscrupulous elements depositing NRs in Nepali banks and
withdrawing Indian currency from Indian banks
o People depositing cash in Indian banks and purchasing insurance
policies of Indian companies
o NRB bans purchasing Indian insurance policies, depositing money in
Indian banks
o
http://www.ekantipur.com/the-kathmandu-post/2010/05/10/top-story/ic-crunch-beats-
liquidity-crisis/208116/
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ADB project to roll
The stalled Community Managed Irrigated Agriculture Sector Project (CMIASP) is
set to get the rolling ball after the Asian Development Bank (ADB) relaxed some
“tough conditions” that hindred its implementation process.
The government had launched the project in 2006 with the ADB loan of $200 million
(Rs. 14 billion) in 35 districts of eastern and central regions. The total project cost is
$380 million.
A mid-term review team from the Manila-based central office of ADB on a field visit
here from April 7-20 visited the projects sites and revived the earlier set conditions for
the implementation of CMIASP.
Interestingly, the government was about to list CMIASP as a “failed project”.
CMIASP chief Nabin Mangal Joshi said the tough conditions set by the donor dealt a
heavy blow to the project. Now the terms have been softened and the project is ready
to roll, he said.
“Earlier, the ADB had to agree even minor components of the project for its
implementation and the process took a long time than expected,” he said.
The ADB head office used to endorse the designs of sub-projects and contracts, but
now the Kathmandu-based CMIASP office will look into these issues, he said.
http://www.ekantipur.com/the-kathmandu-post/2010/05/10/nation/adb-project-to-
roll/208128/
BUSINESS & ECONOMY:
Spice to scale up Ncell ladder
Spice Nepal, which re-branded Mero Mobile as Ncell on March 12, has come up with
new plans to expand its customer network and services for corporate clients.
Thereafter, Ncell recently introduced a new corporate offer - closed user groups
(CUGs), targeting the corporate and business segment, which according to Ncell has
received very good response from the market and existing customers.
"The offer has been successful in attracting the corporate segment," said Mansur
Khamidov, chief commercial officer of Ncell. "It allows customers to make as many
calls as they want at just 60 paisa per minute within their group."
Under the CUG scheme, any Ncell number can be added to the CUG with an approval
letter from the contract owner. Special on-net tariff of Rs.1.60, special data package,
competitive rate for international SMS at Rs.5 and special international call rate
starting from Rs. 4 to the United States, Rs. 5 to countries like India, China, Hong
Kong, Singapore and Thailand and up to Rs. 6 for making calls to Malaysia and South
Korea, are some of the features the corporate offer holds.
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It costs Rs. 600 to subscribe to the corporate offer, wherein the subscriber also gets
free talk-time worth Rs. 300. The offer is the first of its kind in Nepal and one that
allows the subscriber to make calls at a cheaper rate.
Overwhelmed by the response, Ncell is also planning to roll out more attractive and
suitable offerings to the corporate and business segment based on demand. It is
working to offer 3G, special dedicated key account manager for each corporate client,
bulk SMS service and Blackberry service.
A playing it close to the chest Khamidov said, he would not like to comment on the
issue right now. "However, whenever there is a new service we will make an official
announcement," he added.
Ncell has been trying to collect the requirements from the corporate segment to create
services based on their demand. "We are flexible about providing world class services
based on the requirement of the corporate sector clientele," said Khamidov.
http://www.ekantipur.com/the-kathmandu-post/2010/05/10/business/spice-to-scale-
up-ncell-ladder/208141/
Early night for gold shops
Gold dealers have been forced to pull down their shutters earlier than usual at 7 p.m.
because of lack of security. In the past, trading in gold used to continue even after 8
p.m.
Bijoy Raj Baraily, proprietor of New Jaya Laxmi Jewellery Home, said, "Though the
wedding season is on, we are compelled to close our shops as early as before 7 p.m."
He added that increased incidents of abduction and murder of entrepreneurs had
compelled gold dealers to shut their shops early for fear of their property and lives.
Manish Pradhan, proprietor of Asri Jewellers, said that the security situation of the
country was deteriorating day by day bringing evening business to a complete close.
However, Pawan Agrawal, proprietor of Jai Matadi Gold Palace, suggested that
traders should "adjust" to the situation instead of crying for "more security" from the
government. He said, "The gold business is not the only one suffering insecurity, the
whole country is teetering on the brink of uncertainty." Tej Ratna Shakya, president of
the Nepal Gold and Silver Dealers Association, accepted that gold traders feared for
their security as gold was a precious metal and it was not safe to run their businesses
after dark.
He said, "The government's security arrangement cannot be trusted as shops that have
been robbed have not received their property back even though the culprits have been
arrested."
http://www.ekantipur.com/the-kathmandu-post/2010/05/10/business/early-night-for-
gold-shops/208143/
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NOC seeks Rs 1b loans from govt
Nepal Oil Corporation (NOC) has sought Rs 1 billion in loans from the government to
beef up stock of petroleum products, citing political deadlock and Maoist´s strike
threat that could hit supplies in the days to come.
Digambhar Jha, NOC chief, who forwarded a letter to this connection to Ministry of
Commerce and Supplies on Monday, said NOC´s storage tanks across the country
have less than two-thirds fuel in stock at present.
Given its recent deteriorating fund flow, NOC has said that it would not be able to
replenish stock from its own resources.
"When we were making profits, we served interests and loans. But we have continued
to operate with net loss for the last four months," Jha told Republica.
NOC has argued that loan was needed for building up strategic stock so that it could
continue to maintain supplies in case political fiasco continued and unfortunate
mishaps struck the country.
The request from NOC comes at a time when it still has loans of over Rs 7 billion to
repay to the government. It had taken those loans to finance imports over the span of
four years when government´s continued apathy to adjust domestic oil prices in line
with import rates turned it bankrupt.
NOC said it has just about 18,000 kiloliters (KL) of diesel in stock, which is far less
than its storage capacity of 42,370 KL. Likewise, its nationwide petrol stock stands at
3,030 KL, which is about 60 percent of its total storage capacity. Its kerosene stock
stands at 11,800 KL, which is three-fourths of its storage capacity, and aviation fuel
stock stands less than two-thirds of its capacity.
Stock of fuel at Thankot, the main supply outlet for the Kathmandu Valley, stands
much lower than our national average stock, Jha said.
"We have continued to serve loans whenever we could. But to prepare for possible
adverse situation, we still have no option but to turn to government for finances," he
said, referring to recent rise in loss figures of petroleum import monopolist.
The government has continued to adjust prices of oil over the last four months, when
international crude prices started to jump. However, it has preferred to left prices of
liquefied petroleum gas (LPG) untouched. This single product accounts for more than
two-thirds of the total loss of NOC.
The latest import rates and fund flow estimates of NOC show it will suffer a loss of
Rs 190 million -- from its estimated loss of Rs 310 million in the month of May --
from LPG business alone.
"Our loss figure on diesel too has jumped to Rs 4.10 per liter this month from about
Rs 3 of April," Jha said.
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Meanwhile, NOC has reported a loss in its profit margin from aviation fuel to Rs 8
per liter from Rs 15 of the past and kerosene to Rs 4 per liter from Rs 7 of April.
Due resurfaces with IOC
As NOC imported more fuel than what it actually paid to the Indian Oil Corporation
(IOC), its outstanding due to its sole supplier of fuel has surfaced yet again. "As at
April end, we have some Rs 340 million in outstanding account to settle to the IOC,"
said Jha.
He said rise in volume of consumption and NOC´s downturn fund flow over the last
few months were behind the reemergence of the situation.
http://www.myrepublica.com/portal/index.php?action=news_details&news_id=18461
MARKET:
NEPSE gains 5.75 pts
The country's sole secondary on Monday gained 5.75 points to close at 418.77 points.
In today's trading session, except the hydropower and insurance, the indices of all
trading groups moved up.
The hydropower lost 3.65 points to rest at 643.45 points while the insurance went
down by 0.12 points to finish at 552.7 points.
The commercial banks, heavyweight in NEPSE, gained the most as it went up by 9.06
to reach to 377.59 points.
The group categorised as others saw a growth of 3.53 points to end at 516.99 points,
finance gained 1.05 points to end at 411.88 points and development banks gained 0.46
points to incline to 425.83 points.
The sensitive index, which measures the performance of Grade A companies, gained
1.77 points to close at 102.67 points.
The NEPSE today traded 46.122 units of shares amounting to Rs 13,962,044 in 652
transactions.
The capital market witnessed a four-year low in its turnover on Sunday. The market
yesterday witnessed a turnover of just Rs. 9.6 million which is the lowest since May
27, 2007 when the share market had seen a turnover of just Rs. 3.05
million.nepalnews.com
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POLITICS:
CIAA drawn to appointment row
Controversy over the procedure to appoint six labor attaches to different labor
destinations took a new turn on Monday after Commission for the Investigation of
Abuse of Authority (CIAA) took the appointment files under its control for necessary
investigation.
The anti-corruption watchdog took all documents related to the appointment process
from Ministry of Labor and Transport Management on Monday, a source at MoLTM
told Republica. “CIAA officials took away all documents related to the appointment
process to probe the case, following complaints about the irregularities in the
appointment process,” the source added.
Minister for Labor and Transport Management Mohamad Aftab Alam had
manhandled foreign secretary Madan Kumar Bhattarai a few days ago to exert
pressure on the Foreign ministry to endorse the appointment of six labor attaches
Protesting the manhandling of the foreign secretary, employees of Foreign ministry
expressed their dissatisfaction with Prime Minister Madhav Kumar Nepal and Foreign
Minister Sujata Koirala on Monday. Responding to the employees, PM Nepal has
called a meeting of Foreign minister, Labor minister and secretaries of the concerned
ministries to resolve the issues.
Employees of both the Foreign and Labor ministries have been expressing their
dissatisfaction over the entire appointment process.
MoLTM had last month appointed labor attaches to six labor destinations, ignoring
even the reasonable minimum qualifications. The ministry had appointed under
secretaries Kashi Raj Dahal and Krishna Hari Puskar Karna as labor attachés to Japan
and South Korea respectively.
Similarly, the ministry had appointed section officers Bhabiswor Pandey, Bishnu Hari
Upadhyaya, Murari Osti and Bishal Bhattarai as labor attaches to Hong Kong, Oman,
Israel and Kuwait respectively. Among the new appointees, only Bhattarai and
Upadhya have experience in foreign employment sector.
The Ministry of Finance (MoF) had given consent to create new posts of labor
attaches, on condition that labor attaches would be selected through internal
competition among the candidates having good command in English language and
knowledge about the foreign employment sector.
Sources at MoLTM said Minister Alam has been pressing the Foreign ministry to
endorse the appointment of labor attaches to Japan, South Korea and Oman at the
earliest.
http://www.myrepublica.com/portal/index.php?action=news_details&news_id=18467
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Three-party talks uncertain
The big three parties - UCPN (Maoist), Nepali Congress and CPN-UML - could not
sit for fresh round of talks on Monday as the Maoist standing committee meeting
continued till late evening.
NC Vice President Ram Chandra Poudel had requested Maoist Chairman Pushpa
Kamal Dahal on Sunday evening and Monday morning to sit for fresh round of talks.
Poudel said he also had talks with UML Chairman Jhala Nath Khanal over phone on
the three-party talks Monday morning. "The three-party could not take place on
Monday as the UML also remained busy in its standing committee meeting," said
Poudel.
The NC and the UML are scheduled to hold meeting on Tuesday before sitting for
talks with the Maoists. It is still uncertain whether the talks with the Maoists will be
held Tuesday.
The UML had called its Standing Committee meeting to develop party´s position in
view of the approaching May 28 deadline for drafting new constitution and Maoists´
decision to postpone general strikes. Adhikari said the standing committee meeting on
Tuesday will take decision on the UML´s stance.
Adhikari added that they will try to find solution to the problems through package
deal on entire six-point agenda sorted out earlier.
http://www.myrepublica.com/portal/index.php?action=news_details&news_id=18472
Maoists open about PM candidate
The Unified Communist Party of Nepal-Maoist (UCPN-M) has decided to be open
about a party leader other than party Chairman Pushpa Kamal Dahal becoming the
next prime minister if the ruling parties agree to a national consensus government.
The two-day party standing committee meeting that concluded Monday took a
decision to this effect. “Our stance is that the party chairman should lead the national
government. But we also decided to be open to appointing another party leader as
prime minister if other parties agree,” said a Maoist standing committee member
requesting anonymity.
According to sources, party leaders including Barsaman Pun and Top Bahadur
Rayamajhi had vociferously put forth the view that the party should be ready to make
another party leader the next prime minister if doing so would lead to national
consensus.
“What we mean is, our party being the largest in parliament should lead the
government. The party chairman should obviously lead the government. But it doesn´t
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mean there cannot be any other option,” said Maoist standing committee member
Amik Serchan.
The party has decided not to hold formal talks with the ruling parties until Prime
Minister Madhav Kumar Nepal steps down. “But it doesn´t mean we are not holding
backdoor meetings for a consensus,” said a senior Maoist leader.
There was an intra-party tussle between Dahal and Vice-chairman Dr Baburam
Bhattarai over who should lead the next government.
The party´s decision comes in the wake of failure to topple the incumbent government
even after enforcing a six-day nationwide general strike and thousands of Maoist
cadres and supporters from across the country heating up the streets of Kathmandu.
Owing to intense domestic and international pressure, the party called off its
indefinite strike Friday. Just ahead of the demonstration, the party had reaffirmed
Dahal as prime ministerial candidate.
The rift between Bhattarai and Dahal widened after the latter removed Bhattarai from
the post of deputy leader in parliament and later an audio record was leaked to media
in which Dahal accused Bhattarai of being India´s choice for next prime minister of
Nepal. Immediately after that Dahal had gotten the party central committee to endorse
himself as prime ministerial candidate.
10 parties jointly appeal for govt dissolution
Meanwhile, 10 political parties at the initiative of the UCPN-M issued a joint
statement calling for the resignation of Prime Minister Madhav Kumar Nepal.
The parties issued a joint statement after holding a meeting at Maoist party
headquarters at Parisdanda Monday afternoon.
The joint statement states that national independence, federalism, republicanism,
secularism, social justice, peace and constitution are their common goals and that the
incumbent government should resign to create an atmosphere for national consensus
and for achieving the goals. According to Maoist spokesperson Dinanath Sharma, the
parties have formed a joint front to safeguard the new changes and defeat conspiracy
to dismantle them.
The parties to sign the statement are: UCPN-M, Madhesi People´s Rights Forum,
CPN (United), Nepal Sadbhavana Party (led by Sarita Giri), Nepali Janata Dal,
Rastriya Janamukti Party, Nepa Rastriya Party, Sanghiya Loktantrik Rastriya Manch,
Chure Bhavar Yekata Party (signed by general secretary Bhumiraj Niraula) and Dalit
Janajati Party. Altogether these parties have 276 seats.
http://www.myrepublica.com/portal/index.php?action=news_details&news_id=18475
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House disrupted
The UCPN (Maoist) disrupted the parliament session on Tuesday alleging that the
government suppressed demonstrations held nationwide last week.
Maoist lawmakers walked out of the session after the party’s CA member Amik
Sherchan announced the boycott stating that the session would not run smoothly
unless the government took action against those suppressing the peaceful agitation.
The session has been postponed until Wednesday. Speaking before the House,
Sherchan said his party would not support the amendment to the Interim Constitution
to extend the tenure of the Constituent Assembly (CA) unless Prime Minister Madhav
Kumar Nepal resigns.
http://www.ekantipur.com/the-kathmandu-post/2010/05/10/nation/house-
disrupted/208124/
Nepal all for press freedom
Prime Minister Madhav Kumar Nepal on Monday reiterated his commitment to press
freedom and that to creating an environment for the development of media. He made
this vow during a meeting with a delegation of National Photo Journalists’ Forum
(NPJF) at his office in Singha Durbar.
The premier also announced that preparations were underway to set up a separate
media room at his office in a bid to look after media related issues. The delegation
met Nepal to draw his attention to Sunday’s attack on photo journalists. During the
picketing of Singha Durbar, agitating UCPN (Maoist) cadres had attacked two photo
journalists – Rabindra Shrestha of Avenues Television and Prabin Maharjan of
Associated News Agency – smashing Shrestha’s camera. Many other journalists also
complained of harassment from the Maoist cadres.
“The government will leave no stone unturned for the development of the free press,”
the prime minister said, urging the political parties not to incite their cadres to attack
the press. Nepal, however, demanded that the media keep their limits.
The team led by NPJF Chairman Min Bajracharya sought insurance of life and
equipment of photo journalists as well as an initiative to check attacks on press and
action against the culprits. Nepal promised to take action against the guilty.
http://www.ekantipur.com/the-kathmandu-post/2010/05/10/nation/nepal-all-for-press-
freedom/208121/
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GENERAL:
DDC at odds with DoED over royalty
District Development Committee (DDC) Nuwakot has protested the directives of the
Department of Electricity Development (DoED) to use electricity royalty exclusively
in rural electrification project.
DDC officials say the move will affect the development projects being run with the
money collected as the charge for energy use. The DDC receives an estimated Rs 30
million annually from the Nepal Electricity Authority. It is said the DoED’s order was
largely guided by the fact that nearly half of the villages in Nuwakot are without
electricity. The DDC, meanwhile, argues that Nuwakot lacks skilled technicians to
launch rural electrification programme, and thus the electricity royalty is being used
in other development projects.
Hari Pyakurel, a DDC officer, said about 40 percent of the district-level development
projects are being financed by the electricity royalty.
The DDC has written to the DoED asking it to reconsider the decision and is waiting
for the latter’s response.
http://www.ekantipur.com/2010/05/11/national/ddc-at-odds-with-doed-over-
royalty/314062/
Parties enmeshed in age-old game of chicken-and-egg
Nearly four years after the commencement of the peace process, the political parties
have started serious discussions on the integration and rehabilitation of Maoist
combatants, though the issue is now intricately linked with government formation.
The initiatives come as political and constitutional crises loom large with deepening
distrust among parties and uncertainty over the future of the CA and drafting of the
new constitution by the May 28 deadline.
The ruling parties, mainly Nepali Congress (NC) and the CPN-UML, maintain that
consensus over the modality and number of combatants to be integrated in the
security agencies is a must for the “package deal” that will avert the current crisis.
However, the main opposition and the ruling parties don’t see eye to eye on the
latter’s position.
“We want the numbers of combatants to be integrated in the Army and other security
agencies fixed as early as possible,” said NC leader and member of the Special
Committee Ram Sharan Mahat. “Transformation of the Maoists into a civilian party
will pave a way for the formation of national consensus government.”
Maoist leaders, however, say progress on integration and rehabilitation can only be
part of the larger deal, the so called package, and it is very much tied to the change in
government.
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“We are ready to bring the combatants in the chain of command of the government
(Special Committee for Supervision, Integration and Rehabilitation of Maoist
combatants) if it can guarantee the formation of a national consensus government,”
Chandra Prakash Khanal, the PLA Deputy Commander said. “We can also prepare
options for those preferring to start civilian life and rehabilitation in society, on the
condition that it ends the current stalemate.”
Khanal maintains that the row over modality and number for integration can be
resolved only by offering alternatives to each of the combatants living in the UNMIN-
monitored cantonments. “If we fix a number without a field study it will be tough
managing the situation and making a call on what should be done about the rest,”
added Khanal.
NC’s Mahat meanwhile argues that the combatants should be “regrouped” in three
camps – those opting for a/ integration; b/ rehabilitation; c/ and those wanting to
return to civilian life. “If that is not done now, there is a strong possibility that all
combatants would choose the option of integration,” he said.
In April, Prime Minister Madhav Kumar Nepal had proposed a one-month action plan
aiming to start the integration and rehab process, with three alternatives – integration
of 3,000 combatants; integration based on the one weapon-one soldier formula; and
other “proper alternative” – which was not spelled out.
But the action plan failed to make much headway as it was unveiled without the
assent of the main opposition. The ruling parties now maintain that they are ready to
revise the plan and sources in the main opposition indicate that they are ready to be
“flexible” on numbers to allay NC-UML fears of en masse integration.
A Maoist leader said if politics take “a positive turn”, there will be an agreement on
integration of up to 7,000-8,000 combatants in the security agencies. “We are also
ready to complete the process at least two months before the promulgation of the new
constitution, provided that the other parties agree to take measures towards
democratising the Nepal Army.”
“It seems the Maoists want to move forward on integration, if their move can be
instrumental to meet their goal of formation of new government,” said an analyst
following the integration process. “They will demonstrate more flexibility if the issue
comes as a component of the package deal – including those linked with the new
constitution.”
http://www.ekantipur.com/the-kathmandu-post/2010/05/10/nation/parties-enmeshed-
in-age-old-game-of-chicken-and-egg/208122/
Call to change taxation policy
Impractical taxation policy for gold traders has decreased the gold transaction
volume, blamed the traders.
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Tej Ratna Shakya, president of Nepal Gold and Silver Dealers’ Association of Nepal
(NEGOSIDA) said that the government taxation policy is not practical for the traders.
“According to the policy, government has imposed tax on more than 15 per cent of
profit, which is not practical for gold and silver traders,” said Shakya. According to
him, in raw gold total profit a trader gets is 0.001 per cent while incase of ornaments
the profit is only 0.5 per cent to two per cent which is quite minimum.
“During the transaction of one kg of gold we have to invest about Rs 2.7 million and
the profit earned from it ranges from Rs 4,000 to Rs 5,000 on an average and rarely its
upto Rs 8,000,” Shakya said adding that government should revise the taxation policy
for the gold and silver traders.
At present, traders need PAN number to buy gold from the banks but most of the
traders do not have transactions record as they are suffering from low volume of
transactions.
“The traders are afraid of the ineffective taxation system that is neither encouraging
nor effective for the gold traders,” he added. “It has also decreased the volume of
transaction and has increased black marketing.”
http://www.thehimalayantimes.com/fullNews.php?headline=Meddlesome+diplomacy
&NewsID=243585
Crisis management team to help tourists
Tourism Crisis Management Committee is actively coming up with plans to support
and facilitate tourists during bandh and strike programmes.
“We are making effective preparations to tackle the situation and help tourists during
bandh and agitation programmes,” Bikram Neupane, coordinator of Tourism Crisis
Management Committee and Security, and chairman of Himalayan Rescue
Association (HRA) said.
Frequent strikes and bandh is affecting tourism industry. Decline in the number of
tourists arrival, cancellation of hotel bookings and reservations are negative impacts
paralysing the tourism industry. Though, the Tourism Crisis Management Committee
was formed a year ago to provide special facilities and packages to avoid
inconvenience to tourists during any kind of disruption, it is now planning to develop
precautionary measures packages in affiliation with hotels and restaurants for tourists
during bandhs. “It is also starting shuttle services in coordination with locals at remote
areas incase of transportation strike and use identical uniforms for people working in
tourists transportation during emergency situations,” Neupane said adding that there
are also concerns shown by different tourism entrepreneurs to grant facilitation in visa
during Nepal Tourism Year 2011.
Meanwhile, Hotel Association Nepal (HAN) has said that most of the hotels had
bookings and reservations cancellation due to the recent general strike. “Indian
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tourists and European tourists did majority of the hotel booking cancellations,”
informed Madhav Om Shrestha, executive chairman of HAN.
“Due to the general strike hotel sector faced a total loss of about one billion,” he said
adding that there is a need to flow positive information to avoid tourists decline in the
next peak season. “We are suffering losses due to booking cancellation of May, June
and July but we have to make up our loss in the next season,” Shrestha said. “The
cancelled booking also has higher possibilities to get revised if peace and security is
maintained in the coming months.”
According to TIA immigration office, this is the eleventh consecutive month that has
witnessed growth in the international tourists arrival confirming the improved
prospects for Nepal due to the rising business and consumer confidence. In the first
four months of 2010 a robust 21 per cent cumulative growth has been observed in
comparison with the same period last year.
However, tourism entrepreneurs opined that there must be special publicity
programmes and flow of positive informations to help increase the tourist arrivals.
Hotel booking cancellation
Hotel De l Annapurna 20 pc
Hotel Everest 20 pc
Hotel Malla 30 pc
Hotel Radisson 30 pc
Hotel Shangri-La 7 pc
Hotel Soaltee 50 pc
Hotel Shanker 25 pc
Ten parties including UCPN (Maoist) call for PM's resignation
Ten political parties including Unified CPN (Maoist), Madhesi Janadhikar Forum
(MJF) and eight other fringe parties have called for Prime Minister Madhav Kumar
Nepal's immediate resignation to make way for the formation of a national unity
government, Monday.
Issuing a joint press statement after a meeting at Maoist headquarters in Perisdanda,
the parties have said, there is no alternative to a national unity government and a
consensus among all political parties to end the ongoing political deadlock, complete
the peace process successfully and promulgate a new constitution through the
Constituent Assembly (CA).
The statement reads, 'national sovereignty, federalism, republicanism, secularism,
democracy, social justice, peace and Constitution are our common agenda. And to
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promulgate the new constitution by May 28 and complete the peace process
successfully is today's most important task.'
The parties have accused the present government of totally failing in such tasks.
The other parties signing the press release are CPN (United), Nepal Sadbhawana
Party (NSP), Nepali Janata Dal, Rastriya Janamukti Party, Nepa Rastriya Party,
Sanghiya Loktantrik Manch, Chure Bhawar Rastriya Ekta Party and Dalit Janjati
Party.
Sources say, the Maoists have started efforts to garner support from various parties to
prepare for a vote-of-no confidence motion against the present government as a last
resort to change the government.
UCPN (Maoist) has 230 seats in the parliament, MJF has 32, and other fringe parties
present at the meeting have about 20 seats in the parliament. 301 votes at the
parliament are required to change the government. nepalnews.com
Bhattarai says there is no meaning in extending CA's term till current govt lasts
Unified CPN (Maoist) vice-chairman Dr. Baburam Bhattarai said that the Constituent
Assembly's (CA) term which expires on May 28 will not be extended till the
government makes way for a national government headed by them.
In response to questions by media-persons as to whether CA's term will be extended,
at the party headquarters in Koteshwor after the Maoist Standing Committee (SC)
meeting on Monday, he said there is no meaning in extending the term of the
Constituent Assembly when the government is not serious in regards to "constitution
and peace".
The remark from the senior Maoist leader and ideologue comes at a time when
political observers predict serious constitutional vacuum in the country in the event of
non-extension of CA's term. Ruling parties like Nepali Congress and CPN (UML) say
that it would be impossible to meet the May 28 deadline for promulgation of the
constitution and the term of CA needs to be extended.
Dr. Bhattarai said that till the current government lasts, there is no possibility of
promulgating the new constitution or bringing the peace process to its logical end on
time.
He also ruled out talks with the government, saying that Prime Minister Madhav
Kumar Nepal's call for dialogue to end the protracted political deadlock can only be
accepted if he resigns from his post to forge political consensus.
"Prime Minster Madhav Kumar Nepal is sticking to his chair against the wishes of the
people and he must resign if there is to be meaningful talks," Dr Bhattarai
said.Nepalnews.com
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No nixing OHCHR, chorus diplomats
Stating that the four-year-old peace process was still fragile, European and US
diplomats based in Kathmandu on Monday strongly urged the government not to
close the field offices of the Office of the High Commissioner for Human Rights
(OHCHR). They also urged the government to be flexible while negotiating with the
Maoists, who, they said, had offered a window of opportunity by withdrawing their
strike on Friday.
At the recommendation of its ruling ally, the Nepali Congress, the government is
planning to ask OHCHR to close its four field offices.
The diplomats also urged the government to continue the current mandate of the UN
body. In addition to regular monitoring of the human rights situation, its current
mandate allows OHCHR access to the Supreme Court, Legislative-Parliament and
prison archives. The current term of OHCHR expires on June 9.
At a policy briefing organised by Foreign Minister Sujata Koirala in her private
residence at Mandikatar on Monday morning, diplomats expressed serious
reservations over the government’s reported preparations to close down OHCHR-
Nepal’s four field offices in Nepalgunj, Biratnagar, Dhangadi and Janakpur and
curtail its mandate.
Envoys and heads of missions from Australia, Denmark, Finland, France, Germany,
Norway, Russia, Switzerland, the United Kingdom, and Delegation of the EU to
Nepal were present at the briefing. “At a time when the peace process is still fragile,
the envoys proposed that closing the UN rights body’s field offices would not be the
right decision,” US Ambassador Scott H. DeLisi told reporters after the briefing.
Responding to the envoys’ concerns, Koirala said, “It is our policy to address
domestic and stakeholders’ concerns.”
“We have urged the minister not to trim the offices or reduce the mandate of
OHCHR,” Danish ambassador Finn Thilsted said.
Jean Romicianu, Charge d’ Affaires at the French embassy, said they were trying their
best to facilitate consensus among the political parties to end the political stalemate.
Koirala told the diplomats that the government and her party Nepali Congress would
not have “any problem” working together with the Maoists if the latter gave up their
bid for “a parallel government.” She said the Maoists need to dismantle the
paramilitary structure of the Young Communist League and take “concrete steps” for
the integration of Maoist combatants so that ruling parties feel comfortable joining
hands with them.
http://www.ekantipur.com/the-kathmandu-post/2010/05/10/top-story/No-nixing-
OHCHR-chorus-diplomats/208114/
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Diplomats call for urgent steps from govt for consensus
Foreign diplomats have expressed dissatisfaction at the failure of the government to
take stronger initiative to resolve the current political crisis.
During a meeting with deputy prime minister and foreign minister Sujata Koirala at
latter's residence in Mandikhatar, Monday morning, ambassadors of the European
Union, United States and Australia urged the government to urgently take steps for
political consensus.
Koirala told reporters after the meeting that the diplomats expressed concern over the
growing differences among parties which could affect the peace process and
constitution writing.
The foreign diplomats based in Kathmandu have become active in last few weeks as
the political crisis deepens here.nepalnews.com
Anti-Dahal slogans enter parliament records
Some slogans chanted against UCPN (Maoist) Chairman Pushpa Kamal Dahal have
been recorded at the parliamentary meeting on Monday.
Standing Committee member of UCPN (Maoist) Amik Sherchan repeated the slogans
chanted by the peace assembly organized by the business community Friday, to
explain to the meeting what kind of indecent language was used.
While claiming that the peace assembly was not entirely intended for peace, rather it
was planned against the Maoist leadership, Sherchan said people at the assembly used
offensive language while sloganeering against the Maoist party chairman.
He repeated the three slogans used: Down with Prachanda [Dahal], Hang Prachanda,
Prachanda thief quit the country.
He argued that the peace assembly was a conspiracy hatched by the ruling parties
against the Maoist-called general strike.
Using of even a single indecent word against any leader, individual or institution is
taken seriously in a parliamentary system. Usually, when a parliamentarian uses any
insulting language against any other leader, the other members immediately object
and the speaker rules that the House correct such wording.
But on Monday the speaker did not take any action as no one objected to Sherchan´s
words. Many Maoist lawmakers, however, felt embarrassed. Many of them left the
meeting while Sherchan continued with his speech for around an hour. "I couldn´t
stay there any longer as it was so awkward," said a Maoist lawmaker outside the
parliament hall.
"His speech has created a very awkward record in parliament against his own party
chairman" UML lawmaker Agni Kharel told Republica.
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But Speaker Subas Nembang could not stop himself from ruling against Sherchan
when the latter accused him of failing to expedite the constitution-writing process. He
accused Nembang, who is also chairman of the Constituent Assembly (CA), of failing
to rise above being a UML leader. "It has been a long time since the CA meeting took
place. Why don´t you take initiative to call the CA meeting. You shouldn´t present
yourself as a UML leader in the CA," Sherchan said. Nembang then had to rule that
he "leave that context right there."
After his address, Sherchan announced a boycott of the meeting to protest the
government´s "brutally suppressing the Maoists" during the recent general strike
called by the party.
http://www.myrepublica.com/portal/index.php?action=news_details&news_id=18473
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