Tuesday, February 20, 2024

NRNA regrets its decision to buy Lalita Niwas land for its global secretariate

Kathmandu, Feb. 18

The Non-Resident Nepali Association (NRNA) has expressed regrets over the confusion and controversy on its decision to invest in buying land at the Lalita Niwas and constructing its global secretariat there.

"We regret that such a big and sensitive investment decision of the NRNA could not be free from confusion and controversy. The association is committed to resolving the confusion and inconvenience caused to all donors and members," it said in a statement on Sunday.

The NRNA had spent about Rs. 290 million in purchasing the land, existing buildings and construction of the secretariat. The funds were the social investment from all the members, well-wishers, national coordinating councils and central officials from all over the world.

The NRNA had purchased 3 ropanis (48 aanas) of land about eight years ago at the rate of Rs. 2.65 million per aana along with a building from Shovakanta Dhakal, Ramkumar Subedi, Sandip Dhakal, Uma Kumari Dhakal and Madhavi Subedi.

It informed that the payment was made in a cheque via bank.

In its recent decision, the Special Court had given its verdict to nationalise about 284 ropanis of land including the NRNA's office building in Lalita Niwas.

Since the NRNA purchased the land as per the Cabinet decision and got a discount in land registration, we were clear about the legality of the land, it said while expressing sorrow at the news that the land had been confiscated.

Likewise, the Association said that it would appeal against the decision of the Special Court and its effect to the Supreme Court for final resolution.

Until the Supreme Court issues its verdict, the right of use and ownership of the land shall remain with the NRNA, it claimed.

"During the construction of the current central secretariat building built with the Association's investment, approval was obtained from the Kathmandu Metropolitan City and the construction of the building was completed by the decision of the Supreme Court," it said.

According to the NRNA, if the Supreme Court decides otherwise, it has the right to file a case in District Court Kathmandu against the sellers of the land to claim compensation. 

 Published in The Rising Nepal daily on 19 February 2024.        

Democracy Day Messages

 Kathmandu, Feb. 19

President Ramchandra Paudel and Vice President Ramsahay Prasad Yadav have extended their best wishes to all Nepali people on the occasion of National Democracy Day 2080 by issuing separate statements on Monday.

"Paying tribute to all the known and unknown martyrs who sacrificed their precious lives in various struggles for the establishment of democracy, I express my respect and reverence to the elders who led the movement for the establishment of democracy in the country," President Paudel said in his message.

I wish that Democracy Day will help in achieving the national goals of sustainable peace, good governance, development and prosperity while showing respect to all those who have contributed to the various movements for Nepal's sovereignty, territorial integrity, national interest, self-respect and democracy, he added.

Nepal celebrates Democracy Day on Falgun 7 of Nepali calendar every year as a way of remembering and honouring the historical achievement made in human rights and political freedom as a result of the successful revolution of 2007 BS (February 19, 1951) and the sacrificial struggle against the autocracy.

President also said that this day is marked as a proud and unforgettable day in the history of Nepal because the belief that the sovereignty of the country should be vested in people was established on this day through the struggle and sacrifice of martyrs. "We must not forget that the revolution of 2007 BS was an important foundation for the establishment of the federal democratic republic achieved through long struggle and sacrifice and the creation of the current constitution made by the people themselves," said President Poudel.

He also added that the Federal Democratic Republic is an important achievement made by us Nepalis after a long struggle of more than seven decades. Democracy further strengthens the overall national unity including social justice, equality, social harmony and prosperity.

The President said in the message that the democracy has established the belief that the people are the entire source of state power. The Constitution of Nepal aims to build a socialist-oriented economy based on justice and equality by adopting a federal democratic republican system.

"I believe that this day will inspire all people's representative organisations, political parties and all parts of the state to move forward in the direction of meeting people's expectations by adopting democratic values and norms," he said.

Likewise, Vice President Yadav said that Loktantra is the best governance system in the world.

Stating that only Loktantra could be an alternative to Loktantra, Vice President Yadav said that commitment not only from the government but also from all political parties, civil society, private sector  and the media was required to make Loktantra more effect

 Published in The Rising Nepal daily on 19 February 2024.        

Construction business amid unprecedented downturn

Kathmandu, Feb. 17

The construction industry in Nepal has been facing an unprecedented crisis which entrepreneurs call an 'existential' one. Overall, the construction business in the last year has been whittled down to a third of the total activities.

While it is the primary stakeholder in mobilising the government's capital allocation (which is Rs. 302 billion for the current Fiscal Year 2023/24), it creates a market for construction materials, and other items like pipes and fittings, paints and electric products.

However, in the past more than one year's period, both the public and private construction business has been slowed down.

This distress in the construction industry has its spillover effects on the business of construction materials like cement, iron bars, paints, pipes and fittings, electric goods, furniture and decorative items.

For example, the business of pipes and fittings has gone down by 40-50 per cent. "Business has decreased significantly. People are not building private houses, only medium and large industries and a couple of housing projects have continued with construction and maintenance works," said Dipendra Poudel, Managing Director of Kamakhya Trade Pvt. Ltd., Kathmandu.

A study by the Nepal Rastra Bank (NRB) has found that the manufacturing sector in the country was running on an average of 42 per cent in the first half of the last Fiscal Year 2022/23. Likewise, approval for the map of house construction was down by 37.5 per cent during the same period. The situation has further deteriorated in the following months, said Er. Dhruba Thapa, President of the Cement Manufacturers Association (CMA).

While the installed capacity of cement industries has crossed the total domestic demand and the manufacturers have been urging the government to find alternatives like building concrete roads instead of asphalt to increase the demand, the recent recession in construction and development has intensified the crisis in the industries.

Iron bar industries are also experiencing the same crisis. Pashupati Murarka, former President of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) who heads Murarka Organization that also operates an iron and steel industry, said that the steel industry is running below 40 per cent of its capacity. In the aftermath of the COVID-19 pandemic, the industries were running at about 90 per cent.

"The market has gone down as there are less construction works, increased number of steel industries, government's failure to spend the budget and liquidity on the part of common people," said Murarka.

Meanwhile, iron industries that relied on MS Billet to produce rods have been on the verge of collapse as the government two years ago abolished the customs duty on sponge iron but continued a 5 per cent import duty and Rs. 2.5 per kg excise duty on MS Billets, another raw material for iron bars.

Kiran Sakha, Managing Director of Sakha Steel, said that the government has been highly apathetic to their problems. Half of the 32 steel industries are in crisis due to the government's decision to exempt duty on sponge iron, implemented through the budget announced by then Finance Minister Janardan Sharma.

 

This many-sided recession in construction and manufacturing has resulted in the loss of jobs of about 1.5 million people, with about a million losing their jobs in the construction sector alone.

According to Rabi Singh, President of the Federation of Contractors Associations of Nepal (FCAN), the construction industry was providing direct employment to 2 to 2.5 million people. This job loss is seen across various sectors of manufacturing, and supporting activities like transportation, house wiring, painting and furniture.

FCAN said that about 1,800 projects of about Rs. 400 billion are awaiting deadline extension from the government. Likewise, the government has a liability to clear Rs. 40 billion to the contractors. Furthermore, the contractors have not been paid about Rs. 10 billion for the ongoing projects.

The FCAN also said that the construction of about 800 projects is pending as the government couldn't clear the land, assure the budget and provide appropriate design. It is pressing the government for the extension of deadlines for the projects that suffered a backlog of about 9 months to 1 year due to the government restrictions on crusher industries that resulted in a shortage of stones, sand and gravel, and construction couldn't be continued.

The Ministry of Home Affairs in January 2023 had decided to close all crusher industries and quarry works operating illegally. A large number of crusher industries fell in the illegal category due to the provision of a 2-kilometre distance from villages, educational institutions, religious and cultural areas, forests and security establishments, and 500-metre far from river banks and highways. Most of the crusher industries are near rivers, forests, human settlements or highways.

 

Number of contractors in Nepal by 2023

Categories

Numbers

% in Total

Project Size (Rs.)

Class A

341

1

>200 million

Class B

273

1

6 million-300 million

Class C

1072

5

2 million-100million

Class D

22,152

93

< 3 million

Source: FCAN

 

Loans to private sector

Statistics on loan mobilisation are not encouraging either. Domestic credit increased 2.6 per cent in the first half of this FY 2023/24 compared to an increase of 2.8 per cent in the corresponding period of the previous year.

According to the Nepal Rastra Bank (NRB), private sector credit from BFIs increased by Rs. 192.64 billion (4.0 per cent) in the six months of this year compared to an increment of Rs. 137.33 billion (3.0 per cent) last year. Two years ago, the private sector credit from BFIs in the first half saw an increase of Rs. 492.63 billion (12.1 per cent).

Meanwhile, the lending rate of banks has also been moderated and commercial banks' weighted interest rate has come down to 11.38 per cent in mid-January this year from 12.79 per cent a year earlier. Such rates in development banks and finance companies is 13.14 per cent and 14.09 per cent. However, this is still about two per cent higher compared to the average interest rate of 9.44 per cent in mid-January 2022.

Prime Minister Pushpa Kamal Dahal and Finance Minister Dr. Prakash Sharan Mahat have been repeatedly assuring the private sector to keep the interest rate to a single digit.

However, a banker said that the leaders should stop making any promises or claims against the market practice as the interest rates of the bank are determined by the demand and supply in the financial system. Governor of the NRB, Maha Prasad Adhikari has also been voicing the same concern.

 

Facilitating construction business

The earlier boom in the construction of private houses in Nepal was backed by an inflated profit margin in the real estate business, a booming share market and low-interest loans by the banks. These opportunities were lost as the real estate and share market crashed with the share market index going below the 1,900 mark from above 3,100 and real estate transactions discouraged by high-interest rates, a ban on splitting land pieces and crisis in the cooperative sector where more than Rs. 75 billion of lower-middle and middle-class people is stuck significant part of which is not likely to be recovered.

A ray of hope is exhibited by the increased remittance inflow which witnessed an upward trend of 25.3 per cent to Rs. 733.22 billion in the first half of the current fiscal year. However, this amount is scattered among millions of households across the country and a large chunk of it is used in financing daily essential goods and paying utility and education bills.

Poudel said that people don't have money to build their houses or even carry any minor construction works like building boundary walls and other maintenance. Meanwhile, the price of house construction has increased to Rs. 4,200 per square foot now from Rs. 3,500 a year earlier.

"There are no symptoms of early improvement in the situation. This is a cross-cutting issue and multiple stakeholders should intensify efforts to weed out the problems and facilitate the business. But in the case of Nepal such cooperation is not forthcoming," said Singh.

Likewise, Thapa of CMA said that the government should devise a better strategy to promote development and construction. There should be an environment to run construction work throughout the year contrary to the current practice of doing it in the second half of the year, he said. He also suggested the government secure domestic or international borrowing to finance development work and offer much-needed impetus to the construction and related industries.

Similarly, according to Murarka, housing loans should be promoted and the NRB directive that bars banks and financial institutions to mobilise loans to a second house of the same person should be revised.

More than 40 per cent of the capital allocation should be utilised in the first half of the fiscal year if the country wants to stimulate rapid development and economic growth. Since the country is in dire need of quality physical infrastructure, public facilities and construction, the government and private sector should find a way to promote sustainable growth in this sector.

Ministry of Physical Infrastructure and Transport (MoPIT), Ministry of Urban Development (MoUD), Ministry of Energy, Water Resources and Irrigation (MoEWRI), Ministry of Industry, Commerce and Supplies (MoICS), Department of Industry and Investment Board of Nepal at the federal level and provincial infrastructure and industry ministries as well as local bodies should play a proactive role for better mobilisation of the capital budget.

 

Need for better coordination

Minister for Physical Infrastructure and Transport, Prakash Jwala, said that the current crisis is a cumulative impact of multiple decisions and problems such as a temporary ban on crusher industries, restriction on land-splitting and poor development expenditure.

"This is not an issue that the Infrastructure Ministry can address single-handedly. Development ministries like MoUD, MoEWRI, and MoICS also spend a large amount of capital budget," he said. "However, we are extending facilitation in resolving the issues in the critical projects like Narayangadh-Butwal Road Expansion."

Minister Jwala said that there have been multiple rounds of discussions with the contractors and other development stakeholders in facilitating the payment and construction. However, these efforts have yet to bear any fruits.

The MoPIT is also struggling to address the demands of the contractors as the latter have asked to provide a blanket solution to the problem which the Ministry is hesitating to accept. It said that only appropriate demands should be addressed. 

 Published in The Rising Nepal daily on 18 February 2024.        

Keep microfinance free from politics: Dr. Mahat

Kathmandu, Feb. 17

Finance Minister Dr. Prakash Sharan Mahat has said that microfinance has enhanced people’s access to finance in remote areas.

Speaking at the fourth National Microfinance Members Conference that kicked off in Kathmandu on Saturday, he said, "The microfinance sector has supported the underprivileged, poor and women of Nepal and also played an important role in livelihood enhancement.”

However, he said that the recent problems in the microfinance institutions (MFIs) have been a matter of concern for everyone. "It has been seen that interest groups are trying to mislead people by showing some problems. We will never allow those who try to politicize a good business sector like microfinance to succeed," FM Dr. Mahat said.

According to him, it is a dangerous tendency to incite people for the non-payment of debts. The government will not remain silent, and all stakeholders, including the companies and members, should collaborate to defeat such forces.

FM Dr. Mahat also urged common debtors not to be under the illusion that they need not pay their debts. "The loan taken from the depositors' savings is never waived. Instead, the government is ready to facilitate in the repayment process. Debt must be paid," he said.

He also urged that microfinance should not be taken as a profit-making tool but should focus on rural development, small enterprise promotion and self-employment.

Likewise, Acting Governor of the Nepal Rastra Bank, Dr. Neelam Dhungana Timsina praised the role played by microfinance in a country where about 21 per cent of the population is out of the access to formal financing options.

According to her, even though the government has brought various programmes for inclusive development, desired success has not been achieved, and it was the microfinance that supported in the drive.

Expressing concerns over the recent problems in the MFIs, Dhungana suggested that everyone should work responsibly to prevent the situation from worsening. Problem has aggravated with the current 6 per cent non-performing loans.

In the programme, the chairman of the organizing committee, Shankar Man Shrestha, said that the recent problems in microfinance are the weaknesses of the MFIs. They began to act like a profit making company and try to increase profits to distribute dividend. As a result, this sector was flooded with profit-seeking investors, Shrestha said and added that it was a big mistake not to make members of microfinance as shareholders.

"There was negligence even while disbursing the loan, the government opened license anew and there was even more distortion and deviation along with unhealthy competition. Companies were competing in luring the investors and interest rates were treated as a tool for profit.”

Ram Bahadur Yadav, President of Nepal Microfinance Backers Association, complained that the government has neglected the microfinance sector which is promoting investment and enterprise along with financial awareness in the villages through nearly 6 million members.

 Published in The Rising Nepal daily on 18 February 2024.       

Saturday, February 17, 2024

It might take additional 32 years to achieve SDGs: ESCAP

Kathmandu, Feb. 15

Progress on the 17 Sustainable Development Goals (SDGs) remains uneven and inadequate across various segments of the population and within the five subregions of Asia and the Pacific. According to a new report published by the Economic and Social Commission for Asia and the Pacific (ESCAP) on Thursday, gender and location remain key factors in determining levels of poverty and inequality in the region.

The report noted that at its current pace, the region will not achieve all 17 SDGs before 2062 – marking a significant 32-year delay. While positive steps have been taken toward eliminating poverty (Goal 1) and bolstering sustainable industry, innovation and infrastructure (Goal 9) in the region, progress in other critical areas has been more modest. Efforts towards mitigating hunger (Goal 2), enhancing health and well-being (Goal 3), ensuring the availability of clean water and sanitation (Goal 6), expanding affordable and clean energy (Goal 7) and building sustainable cities and communities (Goal 11) have been less pronounced and require heightened attention.

According to the report, Nepal's progress up to now is below the target in most of the goals.

Nepal has seen some progress in areas such as sustainable urban expansion and spatial data generation. However, there are areas where Nepal is experiencing slow progress and regression, particularly in achieving food security and combating undernourishment (Goal 2) and reducing inequalities within and among countries (Goal 10).

The report underscores the importance of addressing these challenges and customising strategies to address specific issues in Nepal. Despite improvements in data collection, significant data gaps still exist, concludes the report.

Gender equality (Goal 5) and peace, justice and strong institutions (Goal 16) continue to have the least available data. This report assesses Nepal’s SDG progress at the global level indicators; and we should be careful interpreting this report in relation to the SDG Report of the Government of Nepal that uses nationalized indicators to assess the SDG progress.

The Asia and the Pacific SDG Progress Report 2024 takes a closer look at groups that may be disadvantaged, focusing on how sex, urbanisation, education level, age and income contribute to existing disparities and sometimes exacerbate them.

Despite overall progress in school enrolment rates, women and girls in the region continue to face considerable challenges when it comes to accessing education and employment opportunities. They have lower enrolment rates and struggle with literacy. Young women also encounter difficulties accessing labour markets, leading to higher rates of youth unemployment. Meanwhile, the challenges faced by men tend to be related to their health or personal safety. They suffer from higher rates of suicide, chronic diseases and road traffic deaths.

 “While additional efforts are required across the board, granular data emphasises the urgency of addressing inequalities that impact marginalised groups, including women, girls, rural populations and the urban poor, who continue to find themselves locked out of education and employment opportunities,” said United Nations Under-Secretary-General and Executive Secretary of ESCAP, Armida Salsiah Alisjahbana.

She added that the sustained progress gap revealed between countries in special situations, especially Pacific Small Island Developing States, and the rest of the region demands a concerted response from international, regional and national partners.

"People living in rural areas face pronounced disadvantages, such as limited access to basic drinking water and sanitation facilities. Additionally, the lower availability of clean cooking fuels in these areas contributes to serious respiratory diseases," read the report. In general, urban areas exhibit better conditions, yet paradoxically, within these areas, the poorest boys and girls face significant hurdles in completing upper secondary education.

On a more encouraging note, the report shares several laudable national success stories in supporting at-risk population groups. In the Philippines, dedicated research and analysis aimed at estimating the cost of supporting children living with a disability played a pivotal role in influencing recent legislation to provide a disability allowance, extending support to children with disabilities.

Nationwide digital training programmes in Viet Nam have underscored the value of public-private partnerships in accelerating digital transformation and bridging the skills and employment gap for youth and migrant workers. Meanwhile, in North and Central Asia, national statistical systems in Kazakhstan, Kyrgyzstan, Turkmenistan and Uzbekistan have been upgraded to better support stateless populations.

 Published in The Rising Nepal daily on 16 February 2024.       

Nepal needs financial support to deal with climate crisis: PM

Kathmandu, Feb. 16

Prime Minister Pushpa Kamal Dahal 'Prachanda' has said that although Nepal contributes almost zero to global emissions, it is experiencing the direct, unequal and harmful effects of climate change.

Addressing the conference on climate change and the role of parliamentarians in sustainable development here on Friday, PM Prachanda said that climate change was a big challenge for socio-economic and environmental welfare.

Mentioning that climate change is emerging as a global threat and will create a serious opportunity for development possibilities, he said that the least developed countries are more vulnerable to the effects of climate change.

"Our people have been badly affected by climatic disasters such as landslides, floods, forest fires, ice landslides and droughts," he said. "People of such countries who are at risk need financial and technical support, and the world should pay attention to that."

Pointing out the serious financial and technical gaps in the efforts to implement plans to reduce the effects of climate change, Prime Minister Prachanda said that there was a need to gather more resources to make the people flexible with the ecosystem and climate change and to plan and implement climate adaptation at the local level.

According to him, there is a need for dialogue between parliamentarians and policymakers around the world to advocate for climate justice and protect the sustainable future of the ecosystem, people and the earth. The damage and loss fund should be implemented smoothly, he said.

Prime Minister Prachanda said, "I want the developed countries to fulfil the climate finance obligation of US$ 100 billion, speed up climate actions through the Green Climate Fund and expand access to the Least Developed Countries (LDCs) and emphasise its implementation."

As the president of an LDC, PM Prachanda also urged developed economies and the international community to help countries that are at risk of climate change.

He said that Nepal is fully committed to securing clean energy and maintaining 45 per cent of the land covered by forests. "Nepal is fully committed to the Paris Agreement. We are committed to achieving zero greenhouse gas emissions by 2045,” he said. 

 Published in The Rising Nepal daily on 17 February 2024.       

Lumbini govt is ready for promotion of women entrepreneurship: CM Chaudhary

Kathmandu, Feb. 16

The first 'National Women Entrepreneurs Conference-2080' involving women entrepreneurs from across the country kicked off in Bhairahawa on Friday.

The two-day conference is organised by the Women Entrepreneurs Development Committee of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) in coordination with the FNCCI's Lumbini Provincial chapter and Siddhartha Chamber of Commerce and Industry (SCCI).

Speaking at the conference, women entrepreneurs drew the attention of the government and concerned agencies to the existing challenges of procedural requirements, training, capital, technology, skilled manpower and marketing.

According to them, there is a possibility of great economic progress from women entrepreneurs especially the micro, cottage and small enterprises, as these businesses can be operated by mobilising locally available resources with a little capital investment.

Speaking at the conference, Chief Minister of Lumbini Province, Dilli Bahadur Chaudhary, said that the village enterprises should be connected with the city. He informed that Lumbini Province had prepared an entrepreneurship programme to assure that the women could earn at least Rs. 30,000 or above per month.

CM Chaudhary said that Lumbini was ready to raise the necessary financial resources for the promotion of women entrepreneurship.

Home Minister of Lumbini, Santosh Pandey, said that the provincial government was ready to take up the responsibility of supporting women entrepreneurs. He said that the Lumbini government has taken initiatives to connect women entrepreneurship to the economy in addition to assisting in market promotion, branding and marketing of local products.

Likewise, Senior Vice-president of the FNCCI, Anjan Shrestha, stated that the government should create an environment for sustainable business along with the promotion of small entrepreneurs, the empowerment of women entrepreneurs and the promotion of economic prosperity.

Shrestha said that the FNCCI has repeatedly drawn the attention of the stakeholders regarding the need for providing financial access to women entrepreneurs and for that, facilities such as project mortgage loans, subsidised loans and refinancing should be made easy and effective.

President of FNCCI Lumbini, Krishna Prasad Sharma said that the conference was organised to listen to the problems of women entrepreneurs from across the country and get support for entrepreneurship development. He said that the conference would help in the development of entrepreneurship even outside the federal capital.

Similarly, Kamala Shrestha, Chairperson of the Women Entrepreneurs Development Committee, informed that the conference was organised with the aim of bringing the three levels of government and financial sector together to discuss the situation of women entrepreneurs, existing policy arrangements, practical challenges and solutions.

According to her, the recent increase in the activity of women in entrepreneurship and the increase in the participation of women in the labour force was a matter of happiness. "From 1971 to 2021, the percentage of economically active women over the age of 10 has increased from 29.2 per cent to 60.4 per cent," Shrestha said. 

 Published in The Rising Nepal daily on 17 February 2024.      

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