Intra-Tourism Promo Bid

To compete with Far Eastern region, SAARC countries are developing regional concepts to boost intra-tourism with South Asian regional tourism cooperation. The SAARC region alone has a population of 1.5 billion which itself is a huge market for intratourist movement.

"During a meet organised at Dhaka, we have come up with a regional concept of tourism promotion within SAARC countries," said Ram Kaji Koney, president of Nepal Association of Tour and Travel Agents (NATTA).

According to him, the Dhaka declaration has been made and its draft is prepared which will be sent to all SAARC members to get approval for operation.

After the approval, the regional concept will be declared during the NATTA Himalayan Mart that will be organised in Nepal.

Far Eastern region with Malaysia, Thailand and Singapore has a broad tourism market and is a tough competitor for the South Asian region. The region is having economy tour and travel packages with number of tourism promotions.

"If the regional concept gets declared, SAARC region will be able to compete with the Far East region's huge tourism market which is giving us tough competition," said Koney. According to him, along with the regional concept Nepal can also get its tourism promotion.

"Once the tourism cooperation gets established, we are confident there will be overwhelming increase in tourist arrivals to Nepal too," Koney said adding that Nepal is centrally located according to the flight distance among the SAARC countries. The average flight distance is only one-anda-half hours which is a plus point for Nepal, he said.

"We have to forward positive messages regarding peace and stability here. We have diverse products and other tourism products like pilgrimage, trekking, tour, mountaineering, adventure tourism products and many more, which will definitely help increase tourist movement," he added.

While intra-tourism cooperation will increase tourist movement, tourists may still face visa problems. So, there must be facilitation from the government's side for the SAARC region and cooperation between the public and private sectors. It can be either be economy tour and travel packages, development of sustainable tourism and eco tourism.

Ridhi Hydro Starts Power Generation

Ridi Hydropower Development Company -- a subsidiary of Arun valley Hrdropower -- is planning to float shares among the public. It has started trial production of 2.4 megawatt (MW) power from September 6.

Though it was supposed to get fund from World Bank Power Development Fund, due to some technical problems it did not and was developed through consortium lending from three commercial banks -- Bank of Kathmandu (BoK), Machhapuchchhre Bank Ltd (MBL) and Nepal SBI Bank.

The consortium -- with Bank of Kathmandu as the lead bank -- has lent 69.5 per cent of the total cost of Rs 400 million. According to project manager of Ridi Hydropower Development Company Kubermani Nepal, the remaining 31.5 per cent was invested by shareholders of the project that has also local investors.

The project was supposed to start generating power last September but could not meet the deadline due to strikes, bandhs and lack of construction materials.

"The power generation got delayed by a year, he added.

The project has its dam site in Digaam VDC of Gulmi district and Siddheshwor VDC in Palpa district's Saatmurey.

The Hydropower company made a power purchase agreement (PPA) with Nepal Electricity Authority (NEA) on August 24, 2006.

Cooperative Farming

Cooperative animal farming has been launched to raise the incomes of Dalit, Janajati and poor families in five VDCs of Banke district. According to the district livestock services office, cooperative pig farming has been launched in Khuna, Jati, Radhapur and Naubasta VDCs and cooperative poultry farming has been launched for Dalit women in Phattepur VDC. In the first phase, 700 people from 125 families are involved in the scheme. In the second phase, they will be involved in more income generating programs.

Machhapuchre Bank Turns 10

Machhapuchre Bank Ltd (MBL) on Saturday celebrated its 10th year of establishment. The bank started its operation from its first regional office at Pokhara. It has 31 branch offices and 35 ATM counters with 365 days banking facility. It is also planning to start Card Switching System along with Visa debit card distribution for its customers. The bank has a total paid-up capital of Rs 1.47 billion and has total deposit of Rs 16.13 billion, credit flow of Rs 14.38 billion and total investment of Rs 2.16 billion. It registered total operating profit of Rs 125 million, read a bank release.

Mobile Phone Banking Service On

Laxmi Bank Ltd (LBL) — one of the leaders in electronic banking in Nepal — has introduced payments through mobile phones under the brand Mobile Money.

“A customer can, at present, transfer funds to 10 selected customers, either post-paid or pre-paid Nepal Telecom mobile and landline bills and Laxmi Bank’s credit bills through mobile SMS,” said bank CEO Suman Joshi, launching bank’s latest product — a fusion of banking technology and communication system that can cha-nge the complete banking landscape in future.

“At present, a customer can transfer Rs 5,000 but the bank and customer can work it out and increase the limit upto Rs 1,00,000,” Joshi informed adding that though it costs a customer Rs 10 per transaction, the Mobile Money saves time and is reliable.

“The system has been put through rigorous testing and carries a number of security features to ensure safety and reliability of financial transactions as our strong suite of electronic banking solutions is backed by strong technologies with a proven track record of innovation,” he added.

As its next step, LBL is planning merchant payment system through its Mobile Money where a customer can pay bills at shopping malls. A true anytime-anywhere servi-ce, it is also planning to provide the service to non-Laxmi Bank acco-unt-holders, he said add-ing, “it could be a powerful retail payment tool.”

There are around five million mobile phone users in Nepal and the number is increasing. “As mobile phone is no longer a luxury but a necessity, Mobile Money has now added one more feature — banking — to popular means of communication,” said the CEO of LBL that strongly advocates migration from ‘cash’ to ‘electronic’ means of payments.

SEBON Studying Viability of New Stock Market

The Securities Board of Nepal (SEBON) -- the capital market regulator -- has started study to gauge the viability of new stock exchange in the country.

"We have already initiated internal study on economic viability of new stock exchanges here. We are also studying the Malaysian experience of operating multiple stock exchanges and new technology applied there,” Neeraj Giri, director of SEBON, told myrepublica.com.

SEBON started studying the viability of new stock markets after three groups filed separate applications to open new stock exchange in the country. However, SEBON officials have asked all applicants to come up with a single proposal keeping in view the small size of economy and capital market in the country.

Seeking permission to open new stock exchange, a business group, comprising Ram Babu Panta and Numa Nath Poudel, has registered an application in the name of National Stock Exchange.

Similarly, another group with Chandra Dhakal, Kamal Gyawali and Gyan Bahadur GC as promoters has applied in the name of Kathmandu Stock Exchange. The third group, with Ace Development Bank as one of the promoters, has also registered the application. All three groups have already made internal preparation to operate new stock market in the country.

“We have already prepared software worth Rs 50 million for share trading and more than two dozen financial institutions are already showing interest to invest in our venture,” said Kamal Gyawali, a promoter of National Stock Exchange. “We are also ready to set up Central Depository System in stock trading.”

SEBON recently formed a committee to expedite the process of granting permission for new ventures. The committee is led by Lal Mani Joshi, board of director, SEBON. A high-level SEBON team, led by Joshi, is leaving for Malaysia on Sunday to study the experience of the East Asian nation which has reduced its stock exchanges to one from three.

“We will learn from Malaysian experience of having more than one stock exchange as well as the modality of running mutual fund and Central Depository System,” said Giri, who is also in the delegation.

Given the increasing number of listed companies in the country´s sole capital market -- Nepal Stock Exchange Ltd (Nepse), experts have claimed that one more stock exchange in the country is viable. About 160 companies are listed in the state-owned Nepse.

However, an official at the SEBON said decision to grant permission to new ventures has to be taken only after conducting in-depth study of capital market taking the declining number of stock exchanges in some countries into consideration.

Bajra & Blay Outlet

Bajra & Blay (Intl) Pvt Ltd -- a wing of Bajra Group -- franchised with Blay (Intl) (M) SDN BHD -- has added a new wing at Durbar Marg. "Though it was launched two years ago in Nepal at the UWTC, Tripureshwor, due to the growing demand for excellent customer service the internationally reputed product Blay Malaysia brand has opened its third outlet here," said Bajra Group chairman Buddhi Bajra Bajracharya. Miss Nepal Zenisha Moktan is the brand ambassador of Blay International shoes for a year. Blay is a registered trademark of Blay (Intl) (M) SDN BHD.

Bullion Traders had a Desolate Dashain Fest

Dashain could not being cheer to gold and silver traders as increasing prices and shortage of currency notes hit bullion transactions this Dashain.

"This Dashain, the market observed less than 10 kg transaction of gold on an average per day in comparison to last Dashain's 13 kg," said Tej Ratna Shakya, president of Nepal Gold and Silver Dealers' Association (NEGOSIDA).

The domestic bullion market saw the precious yellow metal being traded at Rs 29,300 per tola (11.66 gram) -- Rs 400 less than what it closed at on September 24 -- before the Dashain holiday started. "The weak dollar has pushed gold price high in the international market," Shakya said adding that the price in the international market yesterday was $1001 per ounce and which was $1010 on September 24 -- the last closing in the domestic market.

The domestic price is fixed according to the international market price. The international gold price is now hovering around $1,000.

The US keeps saying it has a `strong dollar policy', but few believe this now. Overall, the `official consensus' is that the dollar should descend another 20+ per cent, but this will hurt the recovery badly.

Consequently, the gold price is waiting for action on this front.

Since the dawn of trade in the human community, gold has been money and has always held an important place in the reserves of developed nations. According to experts, they are watching European signatories of the Central Bank Gold Agreement, which has been on the go since the turn of the century, slowing their gold sales to barely a trickle.

IMF has agreed to sell 403 tonnes and opened a way to sell either in the `open market', which will affect the gold market.

However, the demand has not come down. Traditional bullion demand itself is strong from China westwards to the UK. This demand and investment demand have proven to be the most remarkable and heavy form of new and old demand over the last three years and things look set to continue to grow and substantially, from now on perhaps. It needs clear evidence of economic or currency breakdown before it jumps rapidly though.

WORLD BANK-IMF ANNUAL MEETING - Nepal to Decide on PRGF Programme Continuation

Country's SDR likely to get goodly boost

A year after the global economy came close to a meltdown, political leaders and financial officials around the world are meeting at a series of high-profile events in Istanbul, ending with the IMF-World Bank annual meetings that starts from tomorrow.

During the annual meetings Nepal might get more Special Drawing Rights (SDRs). Nepal's SDR at present is 71.3 million SDRs (0.022 per cent) that is expected to rise to 117 million SDRs (0.033 per cent), according to Nepal Rastra Bank (NRB).

The allocation of SDRs boosts member countries' reserves because SDRs can be turned into usable currencies. Once it is added to reserves, a country can voluntarily exchange its SDRs for hard currencies like the US dollar, euro, yen or pound sterling through voluntary trading arrangements with IMF member nations.

The allocation of SDRs also is reflected in the voting rights and subscription to the capital of the IMF. "A member country with more SDRs will have an increased role in the IMF," according to the central bank.

Finance Minister Surendra Pandey and NRB governor Bijaya Nath Bhattarai left yesterday for Turkey to participate in the joint and separate meetings of the IMF and the World Bank.

Pandey will represent Nepal at the joint meeting while Bhattarai will participate in a separate meeting of the IMF.

The meeting is also crucial as it will also clarify Nepal's participation in IMF programmes like the Poverty Reduction and Growth Facility (PRGF) that expired on November 2, 2007. Nepal was one of the participants in the PRGF under which it received IMF assistance to reduce poverty, though its outcome is still debatable.

The IMF's policy advisory group, the International Monetary and Financial Committee will meet on October 4, and the Development Committee will meet on October 5. These meetings are opportunities for the Ministers of Finance and Central Banks' governors from all countries to get together to discuss global economic issues and give guidance to the IMF.

The meetings will bring together finance ministers, central bankers, leading businessmen, academics, and members of civil society organisations from 186 countries.

On the sidelines of the IMF and WB meeting in Istanbul, a meeting of South Asian Association for Regional Cooperation (SAARC) Finance, a forum of central bank governors of South Asian countries, is also scheduled to take place. Bhattarai will take part in the meeting.

The annual meetings of IMF follow on October 6 and 7. The meetings, preceded by the September 24-25 summit of 20 advanced and emerging market economies in Pittsburgh, will be pivotal in setting the strategy for the aftermath of the worst crisis that hit the global economy since the Great Depression of the 1930s.

Though assessing the global reaction to the crisis and what to do next will be top of their agenda, the key issues that the Istanbul meeting -- which has the slogan Resolving Crisis, Building Recovery -- will discuss are Rebalancing of demand, Financial system reforms, Restoring the financial system, Caution in unwinding the stimulus and Spotting risks.

The IMF helped coordinate the global response to the crisis-a response that most likely averted a far worse collapse by pressing for a coordinated stimulus.

It also rapidly provided financial support, with more than $165 billion in loans committed or disbursed since the beginning of the crisis. In late August, the IMF also made available an additional $250 billion worth of new SDRs to member countries to bolster their reserves.

Together with an additional allocation on September 9, about $110 billion of the combined allocations will go to emerging market and developing countries, including over $20 billion to low-income countries.

The IMF has stepped up lending and is encouraging low-income countries to expand budget deficits in response to the crisis.

Number of Tourist Arrivals by Air Picking Up

Fuelled by European and Chinese markets, this tourist season started with an increase in tourists arrivals by air as September is the fourth consecutive month that Nepal has witnessed positive growth in international tourists arrivals.

September observed an encouraging growth of Chinese tourists arrivals by 32 per cent against arrivals from India that decreased by 24 per cent in comparison to last September, according to figures released by the Immigration Office, Tribhuvan International Airport (TIA).

Overall visitor arrivals by air in September increased by 5.5 per cent to 34,281 -- in comparison to last September -thanks to Chinese and European visitors' inflow.

"Recovery in arrivals in the beginning of the second half of 2009 is due to the recovery from recession in Europe. As the world economy comes out of the global recession, tourism activities are forecast to expand as a result of rebounding consumer confidence," said Nepal Tourism Board (NTB).

However, as advanced economies are projected to expand sluggishly, the impact of recovery in tourism sector could be realised slowly.

The data reveal that arrivals from Japan, Singapore, South Korea and Thailand registered a robust growth.

The Asian market also witnessed an increase.

Visitors from Japan, Singapore, South Korea and Thailand increased by 25.1 per cent, two per cent, 25 per cent and 43.6 per cent, respectively.

Though the Asian segment registered a positive growth of 22.5 per cent in aggregate, visitors from Malaysia and Chinese Taipei declined by 5.4 per cent and 3.5 per cent, respectively," said the board.

In the SAARC region, arrivals from Bangladesh skyrocketed to 1,898 registering a positive growth of above 200 per cent to 245.7 per cent. Similarly, Pakistan and Sri Lanka witnessed positive growth of 8.4 per cent and 10.2 per cent, respectively.

The decrease of Indian tourists pulled down the total South Asian arrivals in aggregate and the South Asian segment registered a negative growth of 5.7 per cent, data reveal. An overall positive growth of 8.9 per cent was observed from European markets with arrivals from UK, Switzerland, and Italy up by 24 per cent, 15 per cent and 13.5 per cent, respectively.

Arrivals from France, Germany and Spain registered a negative growth of 1.7 per cent, 11.6 per cent and 6.6 per cent, respectively.

Arrivals from Australia, Canada and USA registered a growth of 10.6 per cent, 22.5 per cent and 21.4 per cent, respectively while arrivals from New Zealand declined by 13.3 per cent compared to last September .

Meanwhile, a total of 30,410 foreign tourists and 45,437 Nepalis departed from TIA in September. The number of Nepali arrivals at TIA stood at 60,715.

NRB to Divest MDB Promoter Share Units

Nepal Rastra Bank (NRB) is divesting the promoters' share in Manakamana Development Bank (MDB formerly known as CSI Development Bank).

The central bank has, according to its own new regulation, started divesting the promoters' shares it has been holding in various financial institutions.

The central bank has asked for the quotation from among the promoters of the bank to bid for the 1,60,000-units of promoters' shares within 35 days from September 24.

According to the Securities Board of Nepal (Sebon) regulation, the first priority will be given to other promoters buy the promoters' shares.

But a promoter cannot hold more than 15 per cent of the total paid-up capital of a bank, according to central bank's regulation.

"Anyone wishing to buy should deposit 10 per cent of the total amount that they wish to pay for the share," NRB said adding that the bidder should not have been blacklisted and can bid for minimum 500-units and any number that is a multiple of 500 at not less Rs 100 per unit share.

However, if none of the existing promoters wish to buy promoters' shares, these can be sold to the general public.

NRB has allowed class A (commercial banks), B (development banks), C (finance companies) and D (micro-finance companies) financial institutions and banks to reduce their promoters' shares to 51 per cent. According to the new directive of the central bank, 19 per cent of the promoters' shares can be traded in the secondary market like ordinary shares.

The NRB directive states that prospective promoter shareholders should not have been blacklisted by Credit Information Bureau (CIB) and that they should disclose the source of their investment as well.

In line with NRB, Nepal Stock Exchange (Nepse) has also opened separate trading of promoters' shares since last March.

Some 38 companies have listed their 61,419,028-unit promoters' shares at Nepse after the secondary market started separate trading since last March 31.

Nepse made the promoters' shares tradeable as the short supply of shares skyrocketed the Nepse index last year to around the 1000-point.

With the new practice, the capital market was expected to be more dynamic and price of the ordinary shares -- that were ballooning then -- was alo expected to stabilise as the supply of shares would increase.

Nepse this year has not been able to move above the 900-point mark due to encough supply of shares.

More Revenue Came in 2008-09

In the fiscal year 2008-09, revenue mobilisation increased significantly by 33.2 per cent to Rs 143.3 billion against a rise of 22.7 per cent to Rs 107.6 billion in 2007-08. "The revenue to GDP ratio moved up to 14.9 per cent in 2008-09 from that of 13.2 per cent in 2007-08," said the annual report of Nepal Rastra Bank (NRB), the central monetary authority.

The government's firm commitment to revenue leakage control, revenue administration reforms, Voluntary Disclosure of Income Scheme (VDIS) and significant growth of nontax revenue contributed to such an impressive growth of revenue mobilisation, according to the report.

However, the value Added tax (VAT) topped the chart as it grew by 28 per cent to Rs 39.9 billion against a 17.3 per cent growth a year earlier. "The increase in VAT revenue was on account of growing imports and consumption induced by an increase in inflow of remittances and reforms in VAT administration," NRB said.

Customs revenue rose to almost double by 34.5 per cent to Rs 26.6 billion against the increase of 18.6 per cent a year ago. It is also contributed to reforms in customs administration and increase in imports of high tax yielding vehicles and vehicles' parts Fuelled by a remarkable receipt under VDIS programme due to government's strong administrative and political commitment, excise revenue increased to more than double by 45.3 per cent to Rs 16.3 billion in comparison to an increase of 21.3 per cent the previous year. Meanwhile, income tax revenue also increased to more than double by 42.5 per cent to Rs 27.4 billion in 200809 in comparison to an increase of 19.9 per cent a year earlier. However, in the total composition of revenue components, the share of VAT and income tax went down while the share of excise duties went slightly up.

Amongst the components of revenue, VAT constituted a share of 27.8 per cent followed by income tax (19 per cent), customs duties (18.6 per cent) and excise duties (11.4 per cent). In the previous year, such ratios were 29 per cent, 17.8 per cent, 18.4 per cent and 10.4 per cent respectively.

Non-tax revenue plunged by more than half in the fiscal year 2008-09 as it grew by 13.9 per cent to Rs 24.3 billion against an increase of 38.7 per cent in the preceding fiscal year. Such an increase was on account of the increase in dividend paid by some public enterprises including the NRB as well as the amount received as the principal repayment from Nepal Telecom (NT), Nepal Electricity Authority (NEA).

The then finance minister Dr Baburam Bhattarai had presented his budget of Rs 236.15 billion for the fiscal year 2008-09 on September 19 and set revenue target of Rs 147.72 billion that was dubbed highly ambitious. However, his target was met easily.

Present Finance Minister Surendra Pandey has set Rs 176.73 billion as the target.

SAG's Flagship Store

Sherpa Adventure Gear (SAG) -- a Seattle-based climbing and outdoor clothing company -is marking another milestone in its brief history with the opening of its Flagship Store and Bed & Breakfast. Located adjacent to the Royal Palace Museum and just east of Durbar Marg, the 2500-sq-ft store is a unique marriage of Sherpa culture with Western sales philosophy. The store will serve the many trekkers and climbers that come to Kathmandu each year as well as foreign expats, and Local Nepalis' growing interest in trekking, said the company. Sherpa Adventure Gear's unique position in the marketplace -- a technical outdoor brand producing 95 per cent of all its technical clothing in Nepal -- has great appeal for climbers and trekkers who travel half-way across the globe to explore Nepal's vast mountain ranges.

Agro Market Construction in Last Phase

The construction of the country's second largest agriculture wholesale market in Butwal has reached the final stage. The market will serve farmers from several districts in western and mid-western Nepal.

Over 80 per cent of the construction work has been completed, according to engineer Gautam Rauniyar.

The market is expected to come into operation within this year.

Though construction was supposed to complete within the last fiscal year, it was delayed due to technical reasons. The market is located at Butwal Bus Park area under Public-Private Partnership model at a cost of Rs 45 million.

The government has allocated Rs 10 million and Butwal Municipality Rs 2 million this year to complete the construction.

The market will have at least 200 shutters and a cold storage. Secretary at the municipality Narayan Bidari said all shutters are already booked and the market will come into operation immediately after construction completes.

The municipality also plans to manage the wasted generated from the market by composting. Regional Agriculture Development Directorate has invested Rs 27 million, Lumbini Vegetable and Fruit Vendors' Association Rs 9 million and Butwal Municipality Rs 9 million for the market.

All infrastructure including water supply and drainage facilities will also be built in the market.

CURRENCY CRISIS - New Banknotes to Reach Soon

A belated consignment of currency notes will reach Kolkata port tomorrow.

"However, it will take a week for it to reach Raxaul because of the holidays on Friday (Gandhi Jayanti), Saturday and Sunday in India.

We are expecting the currency notes to reach Raxaul in a week,"

said a high level source at Nepal Rastra Bank, the central authority.

Due to the shortage of high denomination currency notes, the central bank faced hard times ahead of this Dashain even though a high-level committee formed by the finance ministry took a stop gap measure by circulating old currency notes worth Rs 940 million that bore ex-governor Tilak Rawal's signature and which had `some technical glitches'.

The central bank also circulated Indian currency (IC) to cope with the emergency and which was against Nepal Rastra Bank's (NRB) norms fixed in 1956 under the Nepal Rastra Bank Act, 1955. It has been recast by the new NRB Act of 2002. However, the demand for cash has come down since the annual festival ended officially today.

Last October 1, the central bank and Oberthur Technologies, Division fiduciaire -- a French company -- entered into an agreement to deliver 40 million pieces of Rs 500 denomination notes -- that is Rs 20 billion -- by this August.

Oberthur Technologies, Division fiduciaire -- the world's third private security printer specialised in high security for the production of banknotes, checks and other fiduciary documents in more than fifty countries -- deferred the date of shipment of the consignment twice by two months from August to September.

"Had the company shipped Rs 20 billion on time, there would not have been any shortage," the source said adding that the company had promised to hand over the consignment in August. However, it could dispatch only 20 per cent (Rs 4.5 billion). The rest of the consignment that is on its way to Nepal is Rs 15.5 billion.

The company shipped the consignment on August 10 from Port of Le Havre. But the ship did not dock directly at Kolkata port and reached Malaysia first. The shipment will reach Kolkata port on October 2.

This Dashain, NRB pumped around Rs 18 billion into the market but the demand is for an additional Rs 5 billion. Last year, NRB had circulated Rs 12 billion. Going by the figures, the demand has doubled this Dashain in comparison to last Dashain.

The year-on-year demand for currency notes during Dashain is increasing, an indication of the over-reliance on remittance economy that is fuelling consumerism.

Climate Change Poses Twin Threats

Climate change poses fundamental threats to Asia's food and energy security which, if left unchecked, will result in an upsurge of migration into already overburdened mega cities, according to three major new studies funded by Asian Development Bank (ADB).

Draft versions were released today in Bangkok on the sidelines of a major United Nations Framework Convention on Climate Change (UNFCCC) negotiations on a new climate change treaty to succeed Kyoto Protocol which expires in 2012.

Findings are impacts of rising temperatures in Asia will fall disproportionately on the region's poor, and rural women in developing countries will be among the most affected groups due to dependence on subsistence crops, limited access to resources and lack of decision-making power.

"The food and energy security of every Asian is threatened by climate change, but it's the poor -and especially poor women -- who are most vulnerable and most likely to migrate as a consequence," said ADB vice-president Ursula Schaefer-Preuss.

More than half of Asia's total population lives below the $2-per-day poverty line, and it is this sector of the population that depends on rain-fed agriculture and lives in settlements highly exposed to climate change.

The agriculture, energy and migration studies were produced by the International Food Policy Research Institute (IFPRI); USA, Energy and Resources Institute (TERI), India and the University of Adelaide, Australia, respectively.

The agriculture study warns that the sector -- and therefore food security -- is particularly vulnerable to climate change. Some 2.2 billion Asians rely on the sector for their livelihoods, which are now threatened by falling crop yields caused by floods, droughts and erratic rainfall.

Current climate models indicate food prices may increase -- rice by 29 per cent to 37 per cent, maize by 58 per cent to 97 per cent and wheat by 81 per cent to 102 per cent -- by 2050.

According to the energy report, Asia's access to affordable energy is under increasing threat due to factors including demand-supply gaps, high reliance on traditional biomass fuels, and the high-energy intensity of the region's economies.

Remittance Up

People from Nuwakot who are working abroad have been sending Rs 8 million remittance a day to their district. Over half a dozen financial institutions, which provide remittance services, said remittance has crossed Rs 8 million a day after Dashain festival began. Nepal Bank Ltd, Himalayan bank, Hamro Development Bank, Nepal Bangladesh Bank, Sangam Cooperative and Panchakanya Cooperative, among others, provide remittance service in association with different money transfer companies. Prasanna Sedhai, owner of Bhairabhi Money Transfer, which is IME's local agent, said his office has been releasing Rs 1.5 million a day after mid-September. Hamro Money Transfer said it is receiving Rs 3 million remittance a day.

Asian Regional Meet Focus on Pvt Sector's Role

Private sector has resources and can garner additional resources internally and externally if doing business is convenient in these regions. However bureaucratic hassles, barriers, unpredictable policy framework and political rivalries are sure to vitiate the investment climate, said entrepreneur Jagadish Prasad Agrawal addressing Regional Conference Asia on Quality of Growth: Approaches to Inclusive Development in Asian Societies.

The conference was organised by Deutsche Gesellschaft fuer Technische Zusammenarbeit (GTZ) -- German Federal Ministry of Economic Cooperation and Development (BMZ) and the Planning Commission of India recently in New Delhi.

The latest economic survey mentions that of the 30.85 per cent population below the poverty line, 78 per cent are from the agricultural sector, 47.1 per cent from the hilly regions and 45.4 per cent from the Tarai, Agarwal pointed out adding that the rural sector accounts for 95.3 per cent of the total population below the poverty line despite Nepal's four-decade history of planned development.

"It thus devolves on the private sector to continue forcing economic agenda to the forefront of national discussion for development and for enhancing its own capability and acceptability among the public about its role in bringing about balanced development of backward regions," he added.

Nepal's major problem is not that of unemployment but of under-employment. One-third of the working population is under-utilised.

Poultry, fishing and dairy development are professions which can not only supplement their income at their own place but also provide food security without involvement of transport costs.

"Locally generated income builds capability to save, spend and participate in local developmental efforts. An integrated approach linking these sectors to commercialisation of agriculture is called for. Despite huge pouring of investment in the last 40 years, the agricultural sector continues to be primitive. Productivity is low, farming practices are outdated and there is no linkage with agro-processing industries,"

Agrawal said adding that the private sector has always advocated commercialisation of agricultural sector through corporate involvement via contract farming.

However, labour reform, labour productivity and self-employment are some of the issues of human resource development that have remained non-priorities in the development process. "It is imperative that the state create a unique comparative advantage for these backward regions by converting pockets of deprivation into targeted economic development zones exempt from taxes and regulations for a limited period of time. A combination of cheap electricity, cheap labour and cheap transportation cost for a limited period can transform these less developed regions of Nepal into flourishing blocks of affluence within a very short time," he said. One big advantage Nepal enjoys is that the markets exists on both sides of the country for any product and services within 200km of the production base.

However, the foremost issue is political stability which alone can generate confidence and facilitate private investments, Agrawal said in the three-day conference where around 17 Asian countries are participating.

Animal Insurance

Farmers in rural areas of Parbat have started insuring their animals to reduce the impact of risks associated with animal rearing. Local Development Fund, Parbat, introduced the animal insurance scheme in rural areas of Salija and Arther VDCs as a pilot project. The fund said the concept is new to farmers and it is hard to convince them to insure animals. In Salija, 75 buffaloes have been insured and more applications have come for insurance. Livestock Insurance Committee charges the farmers five per cent premium and pays up to 80 per cent of the price of a healthy animal in case of sudden, accidental death. With the insurance scheme coming into operation, farmers have started taking proper care of their animals. They now take the animals for health check-up every six months. In Arther VDC, 50 goats have been insured. However, the scheme faced hurdles after four insured goats died and the committee ran out of money to pay the insurance amount.

No `Sweeteners' Make Bonds Untradeable

Though the number and amount of listed bonds are increasing in the secondary market, they have not witnessed any trading due to lack of incentives from the government. "The government needs to give some incentives," said Dr Manohar Krishna Shrestha.

Without any attractive features, the bonds are losing their lustre. "The govenrment should provide tax exemption on the interest like it used to on the 16-year development bonds back in 1995," he said adding that high interest and tax exemption on the interest could re-ignite the interest of investors.

"The investors could also be given a convertible option," Shrestha added.

There are a total of 13 listed government bonds worth Rs 151,500,000,000 that are 1,51,500,000-units -- apart from corporate bonds -- in the secondary market.

The first-ever government bond was issued by the British government in 1693 to raise money to fund a war against France. It was in the form of a tontine. In finance -- a bond is a debt -- where the authorised issuer like the government or a corporate house owes the holders a debt, and depending on the terms of the bond, is obliged to pay interest and repay the principal at a later date, termed maturity. Bonds can be issued by pub lic authorities, credit institu tions and companies in the primary market. Corporate houses issue bonds to raise money in order to expand business. The term is usually applied to longer-term debt instruments, generally with a maturity date falling at least a year after the issue date.

Nepal Electricity Authority (1,500,000-units), Himalayan Bank (500,000-units), Kumari Bank (400,000-units), Nepal Investment Bank Ltd (250,000units), Nabil Bank (300,000units), Laxmi Bank (350,000units) and Siddhartha Bank (400,000-units) have listed their bonds at Nepal Stock Exchange (Nepse).

But the investors are less interested in the bonds though these are similar to stocks. "Bonds and stocks are both securities but the major difference between the two is that stockholders have an equity stake in the company whereas bondholders have a creditor stake in the company," he said adding that another difference is that bonds usually have a defined term or maturity, after which the bond is redeemed while stocks may be outstanding indefinitely.

"The other cause for non-attraction of bonds is lack of instant liquidity," Shrestha said. "Though they can be used as collateral like shares there are more hassles than incentives."

He also blamed the lack of institutional investors in the domestic market as another cause for investors not being attracted to bonds though these are safer investment instruments than shares.

"In other countries, bonds are bought and traded mostly by institutional investors like pension funds and mutual funds," he added.