Sunday, January 26, 2014
Proposal to reduce SAFTA sensitive list to 100
PRABHAKAR GHIMIRE
SAARC countries have put a total of 6,768 and 5,148 goods for Non-Least Developing Countries (NLDCs) and Least Developed Countries (LDCs), respectively, inside the SAARC region under the sensitive lists.  The sensitive lists include products on which huge customs tariffs are imposed by individual member countries so as to protect their domestic industries supplying similar products. Though South Asian Free Trade Area (SAFTA) agreement envisages facilitating intra-regional trade by reducing tariffs and non-tariffs barriers, member nations are still maintaining long lists of sensitive products with high customs duty. SAARC member countries have been showing reluctance to reduce the sensitive lists to protect domestic industries and put their customs revenue intact. The source said those four countries have also proposed to bring down the existing import duties to 0-5 percent by 2022 to ensure greater mobility of goods produced by member countries. “We are soon holding discussion with line ministries and other stakeholders, including the private sector, regarding the proposal of the four countries,” a senior official at the Ministry of Commerce and Supplies (MoCS) told Republica on Sunday. SAARC member countries had decided to reduce the number of goods in their sensitive lists by 20 percent in the second phase a couple of years ago. Of the eight member countries, Bhutan, India, the Maldives and Nepal have already provided the names of goods removed from the sensitive lists to the SAARC Secretariat. Afghanistan, Bangladesh, Pakistan and Sri Lanka are yet to provide the lists. Nepal, which has longest list of goods among SAARC countries, has put 998 and 1,036 goods originating from sensitive lists of LDCs and NLDCs respectively. Before the reduction, Nepal had 1,257 goods for LDCs and 1,295 goods for NLDCs under its sensitive lists. The Maldives has the shortest list with 154 goods included in sensitive list. Similarly, Afghanistan and Bhutan have 850 and 156 goods respectively while Pakistan has 936 goods under its sensitive lists for both LDCs and NLDCs. Bangladesh has 987 and 993 goods for LDCs and NLDCs, whereas India has 25 goods for LDCs and 614 for NLDCs under the sensitive lists. Similarly, Sri Lank has 845 and 906 goods for LDCs and NLDCs respectively. Three SAFTA meeting postponed Three crucial meetings of SAFTA scheduled to be held in Kathmandu in the second week of February have been postponed as per the request of Pakistan. The Special SAARC Meeting of Customs and Commerce Authorities on Verification Mechanism relating to Rules of Origin set to be held on February 10, the Third Meeting of Working Group on Reduction in the Sensitive Lists to be held on February 11-12 and the Eleventh Meeting of Experts Group on SAARC Agreement on Trade and Service (SATIS) was scheduled to be organized under the SAFTA by SAARC Secretariat in Kathmandu have been postponed. The SAARC Secretariat has sent notifications to concerned ministries, including the Ministry of Foreign Affairs and the Ministry of Commerce and Supplies (MoCS), a couple of days ago, stating that the meetings have been postponed due to forthcoming India Show at Lahore on February 14-16. The seventh meeting of the SAFTA Committee of Experts held in Islamabad on January 14-15 2012 had decided to establish an ad-hoc Working Group on Reduction in the Sensitive Lists under implementation of SAFTA. The first and second meetings of the working group were held in Kathmandu on 18 June 2012 and July 30, 2013. |
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Thursday, January 23, 2014
Waning hope of achieving budget targets
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PRABHAKAR GHIMIRE
Nepali business people, political parties and even economist had offered their appreciation to the government for a timely announcement of the annual budget after the process had been mired in hiccups in the previous five years. This had raised hopes for a better economic environment at a time when the country was reeling under the frequent disruptions in budget announcement for the past years. But, government officials are losing hope about achieving some crucial targets set in the budget. “Though we set out to attain 5.5 percent growth in the current fiscal year, it looks this is not possible. But we hope we can achieve 5 percent growth despite a disappointing progress in capital spending,” Finance Secretary Shanta Raj Subedi said at an event in Chitwan last week. In the last fiscal year too, the government had had to revise down the economic growth target to 3.6 percent from 5.1 percent announced in the budget due to low capital spending, resulting in slowing of economic activities in the country. In its ‘Marco-Economic Update 2013’, the Asian Development Bank had said a few months back that Nepal’s target of 5.5 percent growth in Gross Domestic Product (GDP) was ‘ambitious’ and limiting inflation within 8 percent was ‘conservative’. Naoyuki Shinohara, the deputy managing director of the International Monetary Fund (IMF), in his visit to Nepal in November last year also forecast that Nepal would be able to achieve around 4.5 percent growth this year. Despite the announcement of a full-fledged budget, the situation has looked no different from previous years which were marked with low budgetary spending. Though the government spent an overall 30 percent of the total budget, capital spending, which is crucial for pushing up economic growth, has been disappointing this year. During the first six months of the current fiscal year, capital expenditure stood at 13 percent of the total capital budget. Out of a total of Rs 85.09 billion allocated for capital expenditure, only Rs 11.50 billion was spent during the review period. However, regular expenditures reached to around Rs 130 billion out of a total of Rs 353.41 billon allocated under the heading for the fiscal year. “We succeeded in bringing out the annual budget on time but we could not end problems facing the country in implementing development projects on time,” added Subedi. Total commitments for assistance from development partners increased to over Rs 53 billion during the first six months of the current fiscal year, up from around Rs 15 billion recorded during the same period last year. But, slow progress in capital spending has hampered the utilization of development assistance extended by donors. In a clear reflection of growing concern among donors over Nepal’s ability to spend development aid, Australian ambassador Glen White expressed his dissatisfaction during a meeting with Finance Minister Shankar Koirala on Wednesday, stating that Nepal has not been able to spend the health assistance provided by Australia. The trend of slow progress in capital spending is not a new phenomenon in the country. Hosts of problems regarding land acquisition, relocation of squatters from project sites, frequent problems in collection river products used for infrastructure projects and slow progress in awarding contracts, have hampered the progress in capital expenditure. “We came to know that just announcing the budget on time cannot resolve problems that have existed in spending development budget, we need to end several chronic problems that still exit in our budgetary system and implementation process,” said Ram Saran Pudasaini, the chief of the Monitoring and Evaluation Division at the Ministry of Finance (MoF). A team led by Pudasaini, is on tour to different districts in the mid and far-western regions to assess the implementation of big projects. He said disruption in smooth implementation of big development projects is a major factor that has limited capital spending. Sikta Irrigation Project, which is one of the government’s priority projects, has been reeling under prolonged disputes about the compensation against the land acquired for the project. Similarly, the implementation of RaniJamara Irrigation, another ‘most prioritized project’, also hit a roadblock due to persisting problems in resettlement of squatters, who have been occupying project site. “These two crucial irrigation projects are examples of how land acquisition is affecting implementation of national priority projects. We have many other projects that deal with extension of transmission lines and construction of highways which are also facing the same fate,” added Pudasaini. Like his team, two other teams from MoF are traveling to sites of major development projects to assess the real problem for execution of such projects. The teams are submitting reports on implementation of big projects and offering recommendations to deal with the problems identified in the projects. “Our report with recommendations to deal with the problems will be included in the upcoming mid-term review of budget implementation,” he said. He, however, says that the pace of implementation will go up in the coming days as the process to award contracts in most of the big projects has been completed. In the past, development projects used to complain that the government allocated insufficient budget. But, this year the government has allocated sufficient funds and MoF officials have been repeatedly pledging that such highly prioritized projects will not face budget scarcity. Even the National Planning Commission (NPC) – the apex policy-making body of the government -- directly intervened in the budget allocation process for such projects to ensure sufficient budget for them. MoF has identified 68 big projects that the ministry directly wants to specially monitor implementation of. There were high hopes among policymakers, business people and the general populace that the timely budget announcement immediately followed by authorization for spending would boost capital spending unlike in the previous years. As double-digit inflation was hitting the general people hard, the current budget set a target of containing inflation to 8 percent -- an ambitious target right when the value of the Nepali currency hit record lows against the US dollar, cost of production kept rising and energy crisis was persisting. The current budget itself has identified that rising inflation has hit producers and consumers due to rise in prices of commodities and their cost of production. Similarly, the current monitory policy formulated by Nepal Rastra Bank, the central monetary authority -- also stated that the devaluation of the Nepali currency and rising volume of remittance pushed up inflation. But, the recent macro-economic report released by NRB shows that inflation hit 10.3 percent in mid-December. Tools adopted by NRB in its monetary policy are looking ineffective in controlling soaring inflation. India also faced the same plight as Nepal due to the stronger greenback against the Indian rupee, to which the Nepali rupee is pegged. The Reserve Bank of India (RBI), the Indian central Bank, recently made a host of recommendations to limit inflation at 4 percent in the long run and 6 percent within a couple of years. Inflation in India had accelerated to 18.4 percent in September; its highest since mid-2010, mainly contributed by the skyrocketing prices of vegetables, including onions. Given the direct trade relation with India -- which covers two-thirds of Nepal’s trade, inflation in India highly influences the Nepali market. The rising cost of production on the back of the energy crisis, soaring prices of imported raw materials and supply constraints in the domestic market are all set to continue driving up inflation in Nepal which has already spiraled beyond the government’s target of 8 percent. |
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Tuesday, January 21, 2014
Nepali hangouts in Malaysia look deserted
-----------Crackdown on illegal foreign migrants---------------
PRABHAKAR GHIMIRE
Kumud Khanal, vice-president of Nepal Association of Foreign Employment Agencies (NAFEA) in Malaysia, said many restaurants operated by Nepalis in various places including Kuala Lumpur, Kotaraya, Johor Baharu and Penang areas have shut down due to minimal turnout of Nepali customers. “Restaurants are major targets of law enforcement officials. We have reports that more than five dozen Nepali restaurants in Kotaraya alone -- which is one of the major hangouts of Nepali workers-- have been closed. Numbers of Nepali-run restaurants in other areas are also without customers,” Khanal, who has been sending workers to Malaysia, told Republica on Tuesday.  An official at the Nepali embassy in Kuala Lumpur said Nepali restaurant owners themselves have opted to close their establishments to avoid illegal Nepali customers. “A negligible number of Nepali migrants have shown up at their major hangouts since the last few days, leading to the closure of a number of restaurants,” added the official. The Nepali embassy stated that over 1,600 Nepali illegal workers received their travel documents over the last three days to avoid possible arrest by security personnel. However, embassy officials also said there has been confusion over how to repatriate workers who have received their travel documents. “We are making inquiries with the Malaysian authorities about the check-out process for those who have secured travel documents,” the official added. In a massive crackdown against illegal migrants, the Malaysian government arrested a total of 1,565 foreign workers, including over 60 Nepalis, from different parts of Malaysia on Tuesday. Bernama.com--the Malaysian national news agency-- quoted James Musa Singa, Kuala Lumpur´s immigration enforcement division assistant director, as saying that 257 Indonesians, 60 Bangladeshis, 41 Maynmar nationals, 39 Indian, 30 Nepalis, 18 Pakistani, two Vietnamese and one each from Nigeria, Thailand, Yeman and Togo were arrested in Kuala Lumpur alone. The identity of three of the arrested has not been established. | In Melaka, Kedaha and Penang also, around 30 Nepalis were arrested, in addition to workers from other countries. The local security agencies have conducted search operations at major lcalities where migrant populations are high, including Kuala Lumpur, Johor Baharu, Penag, Seremban, Kuala Terengganu, Kuching, Kampung Gersik, Petra Jaya, Demak Laut and Samariang, Bau, Kedah, Serian, Melaka, Perak, Miri, Bintulu, Sibu, Sandakan and Limbang. Malaysian authorities launched fresh operations to flush out foreign workers who failed to register under the special program for the management of illegal migrants. Around 10,000 enforcement officials from the Immigration Department, Royal Malaysia Police and People´s Volunteer Corps (Rela) have been deployed for a nationwide crackdown after the three-month special program ended Monday mid-night. Ahmad Zahid Hamidi, Malaysia´s home minister, said those captured under Standard Operations Procedure (SOP) will be deported within seven days to avoid overcrowding in detention centers. The government has set up 15 immigration depots nationwide and designated a number of places as detention centers to smoothen the process of repatriating illegal workers. | ||||||||||||||||||||||||
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Monday, January 20, 2014
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