Cover Story

Now Is The Challenge Of Getting Right Reinsurer At A Competitive Price

Nov 30, -0001 0 6 minutes 28 seconds to read

…

When The Losses Start Decreasing, The Premium Will Come Down

Nov 30, -0001 0 6 minutes 25 seconds to read

…

Unhealthy Competition Among The Insurance Companies Should Be Stopped

Nov 30, -0001 0 5 minutes 30 seconds to read

…

Airclaims Is A Major Resource For Nepali Civil Aviation

Nov 30, -0001 0 9 minutes 31 seconds to read

…

Sky Is The Limit For Aviation Insurance In Nepal

Nov 30, -0001 0 6 minutes 6 seconds to read

…

Cover Story January 2013

Nov 30, -0001 1 41 minutes 57 seconds to read

…

Learning : The Ropes December 2012

Nov 30, -0001 0 17 minutes 34 seconds to read

…

Cover Story December 2012

Nov 30, -0001 0 42 minutes 4 seconds to read

…

Cover Story November 2012

Nov 30, -0001 1 30 minutes 48 seconds to read

…

Labour Dilemma

Nov 30, -0001 0 48 minutes 31 seconds to read

…

Remittance : Reducing Poverty

Nov 30, -0001 1 42 minutes 43 seconds to read

…

Drug Drive : The Rising Business Pharmaceutical Companies In Nepal

Nov 30, -0001 1 42 minutes 3 seconds to read

…

Open Skies Of Nepal

Nov 30, -0001 0 51 minutes 7 seconds to read

…

Infrastucture :The Basis To Development

Nov 30, -0001 0 8 minutes 40 seconds to read

…

The Government Should Play A Proactive And Facilitating Role

Nov 30, -0001 0 6 minutes 18 seconds to read

…

< previous12345678next >

No Laughing Matter

The Sweet Rewards of Power

By Madan Lamsal

. . .
read more »

NEPSE

Notice (8): Undefined variable: file [APP/View/Elements/side_bar.ctp, line 60]Code Context//    $file = 'http://aabhiyan:QUVLg8Wzs2F7G9N7@nepalstock.com.np/api/indexdata.xml';



    if(!$xml = simplexml_load_file($file)){
$viewFile = '/var/www/html/newbusinessage.com/app/View/Elements/side_bar.ctp'
$dataForView = array(
	'articles' => array(
		(int) 0 => array(
			'Article' => array(
				[maximum depth reached]
			)
		),
		(int) 1 => array(
			'Article' => array(
				[maximum depth reached]
			)
		),
		(int) 2 => array(
			'Article' => array(
				[maximum depth reached]
			)
		),
		(int) 3 => array(
			'Article' => array(
				[maximum depth reached]
			)
		),
		(int) 4 => array(
			'Article' => array(
				[maximum depth reached]
			)
		),
		(int) 5 => array(
			'Article' => array(
				[maximum depth reached]
			)
		),
		(int) 6 => array(
			'Article' => array(
				[maximum depth reached]
			)
		),
		(int) 7 => array(
			'Article' => array(
				[maximum depth reached]
			)
		),
		(int) 8 => array(
			'Article' => array(
				[maximum depth reached]
			)
		),
		(int) 9 => array(
			'Article' => array(
				[maximum depth reached]
			)
		),
		(int) 10 => array(
			'Article' => array(
				[maximum depth reached]
			)
		),
		(int) 11 => array(
			'Article' => array(
				[maximum depth reached]
			)
		),
		(int) 12 => array(
			'Article' => array(
				[maximum depth reached]
			)
		),
		(int) 13 => array(
			'Article' => array(
				[maximum depth reached]
			)
		),
		(int) 14 => array(
			'Article' => array(
				[maximum depth reached]
			)
		)
	),
	'current_user' => null,
	'logged_in' => false
)
$articles = array(
	(int) 0 => array(
		'Article' => array(
			'id' => '870',
			'article_category_id' => '40',
			'title' => 'Now Is The Challenge Of Getting Right Reinsurer At A Competitive Price',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	<strong style="color: rgb(35, 200, 250); font-size: 16px; text-align: right;">‘When the losses start decreasing, the premium will come down’</strong></p>
<p style="text-align: justify;">
	<strong><img align="right" alt="Kewal Krishna Shrestha, Everest Insurance" height="316" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/kewal_cover_feb2013.jpg" style="margin: 0 0 0 10px;" width="250" /></strong></p>
<address style="text-align: right;">
	<strong>Kewal Krishna Shrestha&nbsp;</strong></address>
<address style="text-align: right;">
	<strong>President, Nepal Insurers Association &amp;</strong></address>
<address style="text-align: right;">
	<strong>CEO, Everest Insurance</strong></address>
<p style="text-align: justify;">
	<strong><br />
	</strong></p>
<p style="text-align: justify;">
	<strong>What is the size of the aviation insurance market in Nepal?</strong></p>
<p style="text-align: justify;">
	The market size is around Rs 420- 500 million in terms of the premium we collect from our clients.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What about your company’s stake in the market?</strong></p>
<p style="text-align: justify;">
	We own around 25-30 per cent share in Nepal’s aviation insurance market.&nbsp;</p>
<p style="text-align: justify;">
	<strong>It is said that some insurance companies are trying to form a pool to collectively handle the claims on aviation insurance. Are you aware of the latest progress in this regard?</strong></p>
<p style="text-align: justify;">
	I don’t think the pool is what we need to improve the aviation insurance business. Now we are competing to get the lowest rate from reliable companies (reinsurers) but if such a pool is formed, there would be monopoly in the insurance market and there would be no competition. Insurance companies could syndicate the aviation insurance business and the situation could worsen further. The premium will be at a high rate and the airliners will raise the ticket price which in turn will make air travelling difficult. It seems beneficial to all of us but if we view it minutely it is only a means of syndicating that could affect the whole country economically. &nbsp;</p>
<p style="text-align: justify;">
	However, if such pool is sure to be formed we could form this pool in two ways. One, we can calculate certain risks in the aviation industry and other, we can focus on the risks involved in the hull, baggage etc. However creating such a pool needs lots of vision.&nbsp;</p>
<p style="text-align: justify;">
	Beema Samiti recently organized an interaction programme on the possibilities of merger between &nbsp;insurance companies. This interaction was a good initiation in the insurance business but I think both the government and Beema Samiti should be well prepared on it. It needs lots of homework and researches whether to form a pool or to merge the insurance companies.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What future do you see for the aviation insurance business in Nepal?</strong></p>
<p style="text-align: justify;">
	The prospects of aviation business in Nepal depend on the growth of the airliners. The more airlines are there, the better for the aviation insurance business. The theory of demand and supply is applied in the aviation business also. Many airlines are not functioning well and some of them have registered but have not started their operation yet. If new airliners start operating it would benefit both the airliners and the aviation industry. &nbsp;Development of airports and runways in a sustainable way can also sustain airliners. And the development of airliners ultimately grows the aviation insurance business. Since there is a lot of prospects in the tourism sector, I see bright future of aviation insurance business.&nbsp;</p>
<p style="text-align: justify;">
	<strong>Aviation insurance premium in Nepal is said to be one among the highest in the world? Why is it so high?</strong></p>
<p style="text-align: justify;">
	No, I disagree with this. We used to pay 8-9 per cent premium some 10 years ago and we were able to reduce that as low as 2 per cent later. Now again the reinsurance companies are charging the same old rate or even higher. It is mainly because of the risk factors in the aviation industry of Nepal and I don’t think it is unjustifiable. The terrain, safety measures in the aviation industry in Nepal and lack of maintaining safety standards by all the stakeholders involved in the aviation industry are some of the reasons behind the increment of premium. We lack the standard safety measures in spite of ICAO advice.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What do you expect from the Beema Samiti or the government for that matter to facilitate the aviation insurance business in the country? &nbsp;</strong></p>
<p style="text-align: justify;">
	The government can enforce the safety standards. It can properly manage the runways, ground handling, and certify efficiency of the people and the equipment used in the aircraft or for the aircraft maintenance. If you see how the baggage in airports is handled, you will find how improperly things are done. The baggage is loaded in tractors and the insurer has to pay if there is a damage. Furthermore, the international airport in Nepal is very crowded. I think the TIA should now be shifted to some convenient place.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What are the key challenges and issues facing the aviation insurance industry in Nepal?</strong></p>
<p style="text-align: justify;">
	Now is the challenge of getting the right reinsurer at a competitive price. The aviation business is anyway running though the reinsurers are charging up to 12 per cent. But what if they charge 20-25 per cent? I don’t think aviation in Nepal could bear such high premium rates. Moreover, the environment could be such that even the high premium might not draw reinsurers into confidence. Because of the high risk involved in this business, the reinsurers could add more clauses which could affect the overall aviation business in Nepal. And then it will be hard to find reliable reinsurers and we will have to reinsure with whichever party we find. When the claim increases, the premium market becomes hard and reinsurers hesitate to do business. And aviation insurance is driven by reinsurers. Unless the scenario of this seller-driven market changes, we won’t have any other alternative.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What needs to be done to address these challenges?</strong></p>
<p style="text-align: justify;">
	CAAN has to be strong. All the stakeholders of the aviation industry should maintain the safety standards prescribed by ICAO in terms of physical amenities, ground handling, aircraft maintenance, tracing of the aircraft personnel etc. Maintaining the safety standard is the foremost requirement. Everybody in the aviation industry should strictly follow the policies and run under rules and regulations of the government. &nbsp;</p>
<p style="text-align: justify;">
	<strong>The annual claims payout in the aviation section has been constantly rising. This is bound to further increase the already significantly high aviation insurance premium. How are we going to tackle this problem?</strong></p>
<p style="text-align: justify;">
	This is not a problem; it’s an outcome which is natural. When claims payout in the aviation sector starts increasing, increment in the premium is normal internationally. &nbsp;And when the claims start rising, the party is affected and slowly it affects other airliners. When the risk is found the reinsurer loads the premium and that is considered normal in the insurance business.&nbsp;</p>
<p style="text-align: justify;">
	When safety measures are properly followed the risk has to go down. For this, all the stakeholders in the aviation industry should come together and contribute. &nbsp;Evaluation of our work and adopting things that make this business ideal as well as searching ways of perfection in the aviation business is a must.&nbsp;</p>',
			'published' => true,
			'created' => '2013-03-16',
			'modified' => '2013-03-16',
			'keywords' => '',
			'description' => 'Now we are competing to get the lowest rate from reliable companies (reinsurers) but if such a pool is formed, there would be monopoly of the insurance companies and there would be no competition.',
			'sortorder' => '754',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 1 => array(
		'Article' => array(
			'id' => '869',
			'article_category_id' => '40',
			'title' => 'When The Losses Start Decreasing, The Premium Will Come Down',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	<strong style="color: rgb(35, 200, 250); font-size: 16px; text-align: right;">‘When the losses start decreasing, the premium will come down’</strong></p>
<p>
	<img align="right" alt="Pronab Sen, National Insurance Company Ltd" height="317" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/pronab_cover_feb2013.jpg" style="margin: 0 0 0 10px;" width="250" /></p>
<address style="text-align: right;">
	<strong>Dr Pronab Sen&nbsp;</strong></address>
<address style="text-align: right;">
	<strong>Chief Executive Officer,&nbsp;</strong></address>
<address style="text-align: right;">
	<strong>Nepal</strong><strong>National Insurance Company Ltd</strong></address>
<p>
	 </p>
<p style="text-align: justify;">
	<strong>What is your company’s stake in the aviation insurance portfolio?</strong></p>
<p style="text-align: justify;">
	We are moving very selectively in the aviation insurance in Nepal. Previously, Guna Air was 100 per cent with us and now Simrik Air has taken it over. There are some airliners which are having reinsurance support from our corporate office in India- like Buddha Air. We have around five percent market share in the aviation portfolio. Agni Air is co-insured with Shikhar Insurance – 60 percent with them and 40 per cent with us. Another airline in Pokhara has insured 49 per cent with us and 51 per cent with Shikhar. We are now negotiating with Simrik because Guna was with us. &nbsp;</p>
<p style="text-align: justify;">
	We are the direct branch of a reinsurance company in India governed by the Indian Government. We have high retention capacity. We reinsure the portion to other reinsurance companies that is beyond our financial strengths. This is a worldwide phenomenon in insurance business. It depends on portfolios and varies from risk to risk. Sometimes, we retain 20 per cent and sometimes 90- depending on the risks.</p>
<p style="text-align: justify;">
	<strong>Is it true that the insurance companies in Nepal have not been able to make profits from aviation insurance? Why?</strong></p>
<p style="text-align: justify;">
	Yes it is true. And the reason is there are a number of airliners which are very small in size. It may be also because of the weather and terrain of Nepal. Small airliners and aviation companies do not afford expertise and there are few airliners where I have seen the full expertise – this is the biggest challenges for the Nepali aviation sector. Many of the aircraft are also very old. &nbsp;</p>
<p style="text-align: justify;">
	Some of the insurance companies have retention capacity of 0.4 per cent and rest is reinsured. These companies are getting only the reinsurance commission. &nbsp;</p>
<p style="text-align: justify;">
	<strong>Some insurance companies are trying to form a pool to collectively handle the aviation insurance claims. What is your view on this proposal?</strong></p>
<p style="text-align: justify;">
	It is still in the pipeline. Nothing concrete has come out so far. But if such a pool is formed, it will help both the aviation insurers as well as the airliners. After the formation of the pool, they don’t have to run around different countries trying to find out the lowest rate. Once the pool is formed, they know that they have to approach only one office which will organize everything. And the office will be the consortium of a number of insurance companies.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What future do you see for aviation insurance business in Nepal?</strong></p>
<p style="text-align: justify;">
	The future is good because there is a tremendous growth in the tourism sector in Nepal. The tourism sector has a tremendous scope and the more this sector grows, the more the aviation sector expands. More people prefer to travel by air in Nepal considering the time taken in travelling by roads. By air you reach Pokhara in 20-25 minutes.But if you take a bus, it takes 5- 6 hours. And the growth of airliners has paved the road for growth of the aviation insurance companies.&nbsp;</p>
<p style="text-align: justify;">
	<strong>Almost whatever the insurance companies earn from the aviation segment goes to the reinsurance companies abroad. Some are even said to be making losses in the aviation segment. It is said that the companies know that they are not going to make profits from the aviation segment. But they do aviation insurance just to show high insurance premium collection. What do you say?</strong></p>
<p style="text-align: justify;">
	It is not like that. The premium is based on the past losses. If you see the statistics, almost every year there is an air crash and some years, there are around two air crashes in Nepal. And the rate of premium is governed by the reinsurance market. Because of the air accidents, some of the reinsurers were hesitant to do business in Nepal. The aviation summit last month also put forth lots of similar issues in the aviation industry- the dos and the don’ts. Beyond that, the aviation business has a very bright future.&nbsp;</p>
<p style="text-align: justify;">
	<strong>Aviation insurance premium in Nepal is said to be one among the highest in the world? Why is it so high?</strong></p>
<p style="text-align: justify;">
	Yes. As I already said, insurance premiums are based on the past losses. Because of the crashes, the premium has been rising. The recent crashes of Sita Air and Agni Air were a serious concern for the reinsurers.&nbsp;</p>
<p style="text-align: justify;">
	<strong>Are those high premium rates justifiable?&nbsp;</strong></p>
<p style="text-align: justify;">
	The loss is calculated based on the coverage offered by the insurance companies. Suppose there is a loss. You pay some percent of the loss. You pay for the hull losses and the machinery parts or you pay for the passenger liabilities. Passenger liability losses are much higher than the hull losses depending on the kind of passengers. The liability losses are much higher if the passengers are from the US or Canada, and lower if they are from the SAARC countries. The liability losses vary from people to people because of theirs living standard. While finalizing the rates, reinsurers study these things.&nbsp;</p>
<p style="text-align: justify;">
	Airliners not only fly Nepali people or SAARC people but also other foreigners. For example, most of the people in the mountain flights are from European countries. Furthermore, airliners have different premiums depending on their types, aircraft, and management facilities they have.&nbsp;</p>
<p style="text-align: justify;">
	<strong>How can we lower the high insurance premium?</strong></p>
<p style="text-align: justify;">
	It’s a million dollar question. It has to be high, otherwise it won’t be viable. We are not totally dependent on our own companies. We may not have the capacity, so we need to approach other markets for reinsurance. When the losses start decreasing, the premiums will simultaneously come down. For example in India, the fire premium rate was very high in the past. Many studies were conducted. And when they calculated the total premium over a period of time, and how much profit they generated- then the premium started coming down. Likewise, though the premium is high at the moment, it will definitely go down every year if the risk is reduced. In the present scenario, you don’t have any choice. Until the reinsurer accepts the business, how can you reinsure?</p>
<p style="text-align: justify;">
	<strong>The country’s first-ever aviation insurance summit was organized in the capital recently. How helpful was this summit?</strong></p>
<p style="text-align: justify;">
	I think it was helpful. We got to know the perspectives of different reinsurers present there. It was the first of its kind event in Nepal and was helpful for everyone involved in the aviation industry.&nbsp;</p>',
			'published' => true,
			'created' => '2013-03-16',
			'modified' => '2013-03-16',
			'keywords' => '',
			'description' => 'We have high retention capacity. We re-insure the portion to other reinsurance companies that is beyond our financial strengths.',
			'sortorder' => '753',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 2 => array(
		'Article' => array(
			'id' => '868',
			'article_category_id' => '40',
			'title' => 'Unhealthy Competition Among The Insurance Companies Should Be Stopped',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	<span style="color:#23c8fa;"><span style="font-size: 16px;"><strong>‘Unhealthy competition among the insurance companies should be stopped’</strong></span></span></p>
<p>
	<strong><img align="right" alt="Prem Bahadur Maharjan, Rastriya Beema Sansthan" height="307" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/prem_cover_story_feb2013.jpg" style="margin:0 0 0 10px;" width="250" /></strong></p>
<address style="text-align: right;">
	<strong>Prem Bahadur Maharjan&nbsp;</strong></address>
<address style="text-align: right;">
	<strong>Chairman</strong></address>
<address style="text-align: right;">
	<strong>Rastriya Beema Sansthan</strong></address>
<div>
	 </div>
<p style="text-align: justify;">
	<strong>What is your company’s stake in the aviation insurance market?</strong></p>
<p style="text-align: justify;">
	The amount of insurance is calculated in foreign currency. We own around USD 2 million business which constitutes 30 to 40 per cent of the total aviation insurance business. We are the only insurance company insuring big aircraft including jet planes. We have insured the Jet planes of the national flag carrier, Nepal Airlines, and BB Airways lately. We have succeeded in acquiring the largest proportion of insurance share in the market because national airlines is insured with us. &nbsp;&nbsp;</p>
<p style="text-align: justify;">
	<strong>Is it true that the insurance companies have not been able to make profits from aviation insurance? Why?</strong></p>
<p style="text-align: justify;">
	I don’t agree with this. &nbsp;In our case, we feel that there is some harsh competition including in the premium rates. And particularly in the private airlines sector, we have witnessed a number of air crashes. That might have contributed to the loss in the overall aviation insurance business but it is not the case of Beema Sansthan. We have not gone through such loss. Nor &nbsp;have our clients faced such air crashes.&nbsp;</p>
<p style="text-align: justify;">
	<strong>Some insurance companies are trying to form a pool to collectively handle the claims on aviation insurance. When could we see such a pool?</strong></p>
<p style="text-align: justify;">
	I have also heard about it. I guess the practice of collectively handling the aviation insurance claims is yet to materialize. It would be good if such a pool is formed. It will help prevent unhealthy competition.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What future do you see for aviation insurance business in Nepal?</strong></p>
<p style="text-align: justify;">
	I see a lot of potential for this business. &nbsp;The aviation market has grown in Nepal over the years and with it, the aviation insurance business, too, has grown. The other big reason is that Nepal is promoting tourism by organizing many events. This has increased the number of air passengers to Nepal and thus helped the aviation insurance in the country.&nbsp;</p>
<p style="text-align: justify;">
	<strong>Almost whatever the insurance companies earn from the aviation segment goes to the reinsurance companies abroad. Some are even said to be making losses in the aviation segment. It is said that the companies know that they are not going to make profits from the aviation segment. But they do aviation insurance just to show high insurance premium collection. What do you say?</strong></p>
<p style="text-align: justify;">
	In a way, it is true. Since we don’t have a strong financial institution that can cover the aviation insurance, we depend on foreign reinsurance companies. Though the percentage of commission from premium collection that we collect seems minimal, we are able to sustain the operation. Though the commission might be less in comparison to the bigger amount of insurance premium; we have other indirect benefits as well. It is because we have to reinsure &nbsp;with very reliable reinsurance companies recognized internationally. There are very few reliable reinsurance companies. Beema Sansthan has found a re-insurer based in the United Kingdom.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What do you expect from the Beema Samiti or the government for that matter to facilitate the aviation insurance business in the country? &nbsp;</strong></p>
<p style="text-align: justify;">
	There is unhealthy competition among the insurance companies at present. They tend to take the aviation insurance business at low rates ignoring the risk factors. The situation is such that some companies might collapse if something bad happens to the airlines they have insured. Moreover, I have heard that some insurance companies are even unable to pay out the claims. Beema Samiti, being the regulatory body, can set some standards to avoid such kind of unhealthy competition. Beema Sansthan is a government-owned institution. So, it does not need to jump into this unhealthy competition. Though aviation insurance is growing, almost all the premium collected here goes abroad. We get only a fraction of it as commissions. I think this is the time that Beema Samiti should form a government-owned re-insurance company in Nepal. It will help us to stop or decrease the amount of money going outside the country.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What are the key challenges and issues facing the aviation insurance industry in Nepal?</strong></p>
<p style="text-align: justify;">
	As I already mentioned, the first challenge is unhealthy competition among some insurance companies. The risk factor is also growing and it is making premiums costlier. We have witnessed many air crashes in a quite short period of time. It is not only about insurance, it is also about the safety of the people.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What needs to be done to address these challenges?</strong></p>
<p style="text-align: justify;">
	There has to be a strict monitoring mechanism for air traffic discipline. People involved in the aviation business should be given safety education. Pilots should also be alerted not to take any sort of risks.&nbsp;</p>
<p style="text-align: justify;">
	Moreover, unhealthy competition among the insurance companies should be stopped. And it could be managed since there are very limited insurance companies in the aviation sector. Furthermore, the government should try to establish reinsurance companies here in Nepal itself.</p>
<p style="text-align: justify;">
	<strong>The country’s first-ever aviation insurance summit was organized in the capital recently. How did you find this summit?</strong></p>
<p style="text-align: justify;">
	From educational point of view, the summit was quite fruitful to the people involved in the aviation insurance sector. It was successful in raising the issues related to the risk factors in the aviation insurance and about the premiums that are in practice. Such summits are helpful in making people aware about the things happening in the aviation insurance market. I expect such events to continue.&nbsp;</p>',
			'published' => true,
			'created' => '2013-03-16',
			'modified' => '2013-03-16',
			'keywords' => '',
			'description' => 'The first challenge is unhealthy competition among some insurance companies.The risk factor is also growing and it is making premiums costlier.',
			'sortorder' => '752',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 3 => array(
		'Article' => array(
			'id' => '867',
			'article_category_id' => '40',
			'title' => 'Airclaims Is A Major Resource For Nepali Civil Aviation',
			'sub_title' => '',
			'summary' => null,
			'content' => '<address>
	<strong style="text-align: right;"><font color="#23c8fa" size="3"><span style="font-style: normal;">‘Airclaims is a major resource for Nepali civil aviation’</span></font></strong></address>
<address>
	<strong style="text-align: right;"><font color="#23c8fa" size="3"><span style="font-style: normal;"><br />
	</span></font></strong></address>
<address>
	<strong>Douglas G Cavannagh</strong></address>
<address>
	<strong>Risk and Safety Manager</strong></address>
<address>
	<strong>Airclaims&nbsp;</strong><strong>(A UK-based leading reinsurance company)</strong></address>
<p style="text-align: justify;">
	<strong><br />
	</strong></p>
<p style="text-align: justify;">
	<strong>How long has your company been involved in the insurance business in Nepal?&nbsp;</strong></p>
<p style="text-align: justify;">
	Airclaims is the leading provider of claims, risk management and asset management services to the global aviation industry. Founded in 1964 Airclaims has been handling aviation insurance claims in Nepal since the late 1960s. Airclaims currently handles in excess of 2500 assignments each year though a global network of 20 offices. Airclaims is the leading provider of such expertise worldwide.&nbsp;</p>
<p style="text-align: justify;">
	In terms of Airclaims risk and safety consulting services this service offering was initially utilised by aviation insurance underwriters to assess the risk profile of different operators. The initiation of these studies was often a consequence of a serious accident or a deteriorating loss record on the part of an operator.&nbsp;</p>
<p style="text-align: justify;">
	As our capability grew these services were expanded to include risk and safety assessments of maintenance, repair and overhaul facilities, helicopter operators, ground handling companies and airports. During the past 20 years many of these services have also been utilised by petroleum and mining companies who use our expertise to assess the risk of different contractors that they use. Airclaims is now one of the leading providers of operator risk assessments in this sector. Our experience is often in demand from investors who require a bespoke due diligence study to assist them to better understand the risks associated with a potential acquisition and to provide valuations and condition surveys of aircraft to potential purchasers or those who wish to update the value of their aviation assets. We also undertake a considerable amount of work for airlines and operators who require a completely impartial assessment of their operation and a worldwide perspective to help them improve their own internal safety capability. This ranges from the initial assessment and needs analysis, to project management, training, coaching and final assessment.&nbsp;</p>
<p style="text-align: justify;">
	In today’s challenging asset management environment, the demand is for a business partner that not only has a strong reputation and broad capability but also the consistency of approach.&nbsp;</p>
<p style="text-align: justify;">
	Our integration of what are typically considered separate functions, such as project management, airworthiness oversight, powerplant services and risk management are all combined to form ten core modules, providing a unique capability&nbsp;</p>
<p style="text-align: justify;">
	<strong>How do you differentiate yourself from other companies?</strong></p>
<p style="text-align: justify;">
	We differentiate ourselves by:&nbsp;</p>
<ul>
	<li style="text-align: justify;">
		Drawing on ‘real world’ experience gained from our involvement in the aftermath of many of the largest aviation accidents and losses during the past 50 years.&nbsp;</li>
	<li style="text-align: justify;">
		Being able to recommend bespoke solutions to mitigate risk based on our work with all the different parties involved in aviation, not just airlines and operators.&nbsp;</li>
	<li style="text-align: justify;">
		Using our international experience gained from working with many different nationalities and cultures, to train and coach organisations on how to achieve the same objectives using alternative methods.&nbsp;</li>
	<li style="text-align: justify;">
		Using our exposure to accident sites and our knowledge of emergency response services to tailor procedures to the reality of what actually happens during these events.&nbsp;</li>
</ul>
<p style="text-align: justify;">
	<strong>The size of your business in Nepal at present?&nbsp;</strong></p>
<p style="text-align: justify;">
	That really depends on how often there is an accident. Unfortunately for some that has been a little too often. If there was to be a reduction in the number of accidents as a result of Airclaims providing Risk Management rather than Claims Management Services then that would be fine with us too. We are currently the preferred aviation claims handling company for the national airline and a number of domestic operators in Nepal and also most International carriers who operate services to Kathmandu. Our presence in Nepal over many decades has enable Airclaims to build up much valued relationships.&nbsp;</p>
<p style="text-align: justify;">
	<strong>Why is the insurance premium in aviation so high in Nepal?&nbsp;</strong></p>
<p style="text-align: justify;">
	There are a number of factors that affect the rate at which the insurance premium is calculated in any market. Some of those factors are loss record, operating environment and the type and value of the aircraft being insured.&nbsp;</p>
<p style="text-align: justify;">
	Nepal is undoubtedly a challenging operating environment for operators and crews in terms of terrain, weather and infrastructure and these factors do mean that along with a loss record that reflects these challenges, insurance costs will be higher. However, with improvements in infrastructure, training and operations, it is quite possible to address many of these factors and in doing so ensure that the cost of insurance is maintained at a reasonable level.&nbsp;</p>
<p style="text-align: justify;">
	There is also the factor of insurance market capacity something which cannot be directly influenced in Nepal. Worldwide, it could be said that there is a good deal of capacity i.e. insurers who want to underwrite aviation risks. Capacity and competition help keep the price down although, Nepal is seen as a higher risk region because of the factors already mentioned above.&nbsp;</p>
<p style="text-align: justify;">
	We know that all parties involved in aviation in Nepal are keen to support the improvements that are needed to ensure risk is reduced and Airclaims are ready to play its part in the provision of not just loss management services but also risk management services.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What are the challenges faced by the aviation insurance business in Nepal?&nbsp;</strong></p>
<p style="text-align: justify;">
	The challengers faced by the aviation insurance business in Nepal are the challenges that face the aviation operators as well. The biggest challenge is to reduce operational risk. Despite the significant challenges that are faced, Nepal is clearly serious in its desire to reduce risk and consequently improve safety. It can be done.&nbsp;</p>
<p style="text-align: justify;">
	The main challenges facing aviation in Nepal are:&nbsp;</p>
<ul>
	<li style="text-align: justify;">
		Infrastructure improvement. There needs to be a significant investment in better basic airport facilities (i.e. runways, navigation aids, etc.)&nbsp;</li>
	<li style="text-align: justify;">
		Weather reporting. There is a requirement for a significant number of automatic weather stations to report the weather being experienced in real time, via satellite link, in the more remote parts of the country.&nbsp;</li>
	<li style="text-align: justify;">
		Better operational control being exercised by the operators. It needs to become a complete team effort especially when difficult decisions are needed associated with dispatch of aircraft in the difficult operational environment that exists.&nbsp;This will become even more important over the next decade or so as the average age and experience levels of pilots are reduced.&nbsp;</li>
	<li style="text-align: justify;">
		More and better training to help reduce the effect of the loss of highly experienced pilots over the next ten years.&nbsp;</li>
</ul>
<p style="text-align: justify;">
	<strong>What can Nepal do to overcome these challenges?&nbsp;</strong></p>
<p style="text-align: justify;">
	The system of regulation that has been in place for the past 50 plus years may have reached its maximum effectiveness. Regulation by requiring compliance with rules and regulations has probably got as good as it will get globally. The adoption of a more proactive and predictive Safety Management System (SMS) is needed by the operators and aviation authorities in Nepal. Having an effective way of safety oversight such as through adoption of a Safety Management System (SMS) has been proved to improve safety and risk management culture. Such a system can be used to support airline owners, airline managers, pilots &amp; engineers and all who are involved in aviation; this includes the regulators who must have a key role in supporting new ways of looking at risk and safety management and oversight.&nbsp;</p>
<p style="text-align: justify;">
	<strong>The annual claims payout in the aviation section has been constantly rising. This is bound to further increase the already significantly high aviation insurance premium. How are we going to tackle this problem?&nbsp;</strong></p>
<p style="text-align: justify;">
	The current global picture is interesting with record low levels of claims for successive years. Unfortunately this trend has not been seen in Nepal. Tackling the problem will require leadership on the part of the regulating authorities towards resetting the scene for risk and safety management such as through improvement in the operational management operators. The regulating authorities can and need to play a leading role in improving oversight and ensuring that all operators are able to take advantage of an open and even handed approach to improvement of infrastructure and operational standards. Operators investing in good safety systems and management should be supported and those that are failing to do this need to be provided with proper advice and if necessary some forms of sanction up to and including withdrawal of AOC.&nbsp;</p>
<p style="text-align: justify;">
	New approaches and thinking will bring positive benefits. We can’t just keep doing business as we have always done and expect things to get better on their own. Change is inevitable in all businesses not least aviation and the benefits to Nepal can be significant in terms of social and economic reward.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What prospects do you see for aviation insurance business in Nepal in the future?&nbsp;</strong></p>
<p style="text-align: justify;">
	The prospects for aviation insurance business in Nepal are bright. There is a capable and knowledgeable local market which has good relationships with the global insurance community. The present level of risk is too high but there are enough insurers willing to support the market, albeit currently at a higher cost than in some other places. What is perceived as the current high cost of insurance can and should be reduced for operators who demonstrate a good safety culture and record, adopt a Safety Management Programme that is working well and can prove that it is making a difference.&nbsp;</p>
<p style="text-align: justify;">
	<strong>Is there anything else that you would like to say?&nbsp;</strong></p>
<p style="text-align: justify;">
	As a leading provider of Claims Handling and Risk and Asset Management Services and with our long association with Nepal aviation, Airclaims can help make a safer environment for all stakeholders in aviation in Nepal, but it has a cost. Therefore, we are ready to work with the leaders of aviation in Nepal to support Nepal in the development of its aviation capability and ambitions with safety as the focus of any plan. Once it happens all of Nepalese society will reap the benefits.&nbsp;</p>',
			'published' => true,
			'created' => '2013-03-16',
			'modified' => '2013-03-16',
			'keywords' => '',
			'description' => 'Nepal is undoubtedly a challenging operating environment for operators and crews in terms of terrain, weather and infrastructure and these factors do mean that along with a loss record that reflects these challenges, insurance costs will be higher.',
			'sortorder' => '751',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 4 => array(
		'Article' => array(
			'id' => '866',
			'article_category_id' => '40',
			'title' => 'Sky Is The Limit For Aviation Insurance In Nepal',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p style="text-align: justify;">
	<img align="right" alt="Prakash Panday, Shikhar Insurance Company Ltd" height="276" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/prakash_panday_cover_feb2013.jpg" style="margin: 0px 0px 0px 10px;" width="235" /></p>
<address style="text-align: right;">
	<strong style="color: rgb(35, 200, 250); font-size: 16px; font-style: normal;">‘Sky is the limit for aviation insurance in Nepal’</strong></address>
<address style="text-align: right;">
	 </address>
<address style="text-align: right;">
	<strong>Dip Prakash Panday</strong></address>
<address style="text-align: right;">
	<strong>CEO</strong></address>
<address style="text-align: right;">
	<strong>Shikhar Insurance Company Ltd</strong></address>
<p>
	 </p>
<p style="text-align: justify;">
	<strong>What is the size of the aviation insurance market in Nepal?</strong></p>
<p style="text-align: justify;">
	The total size of the aviation insurance market of the domestic private sector in Nepal is around USD 8.5 -9 million.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What about your company’s stake in the market?</strong></p>
<p style="text-align: justify;">
	We have around 70-75% market share.</p>
<p style="text-align: justify;">
	<strong>Is it true that the insurance companies have not been able to make profits from the aviation insurance? Why?</strong></p>
<p style="text-align: justify;">
	Aviation Insurance in Nepal has been a loss making portfolio for all the insurers involved. &nbsp;This has been because of the losses in the last couple of years. Nepal is being taken as a high risk zone for aviation insurance.&nbsp;</p>
<p style="text-align: justify;">
	<strong>It is said that some insurance companies are trying to form a pool to collectively handle the aviation insurance claims. What is the latest progress in this regard?</strong></p>
<p style="text-align: justify;">
	It is a very good concept. Reinsurance companies support about 99.5 per cent insurance and only 0.5% is handled by the local insurance companies. The main idea behind forming this pool is to take the advantage of the volume and also to get quality reinsurers so that losses get paid in a timely manner and also to have standardization in all the policies. &nbsp;This can also help in some investment in safety features.&nbsp;</p>
<p style="text-align: justify;">
	<strong>How is this pool going to help the insurance companies, if and when it is formed?</strong></p>
<p style="text-align: justify;">
	It is still in the planning process. Insurance companies and operators have to come together with full support from the regulators before such a pool can be formed. &nbsp;</p>
<p style="text-align: justify;">
	<strong>What future do you see for aviation insurance business in Nepal?</strong></p>
<p style="text-align: justify;">
	Sky is the limit for aviation insurance in Nepal. The only thing is that safety factors have to be improved. Nepal’s aviation sector is classified as the highest risk zone for reinsurers. We want to see Nepal as a safe destination. When a pool of insurers is going to own the overall aviation insurance, more responsibility shall be felt. Risk management is very important.&nbsp;</p>
<p style="text-align: justify;">
	<strong>Almost whatever the insurance companies earn from the aviation segment goes to the reinsurance companies abroad. Some are even said to be making losses in the aviation segment. It is said that the companies know that they are not going to make profits from the aviation segment. But they do aviation insurance just to show high insurance premium collection is. What do you say?</strong></p>
<p style="text-align: justify;">
	We are not sending money, we are transferring risk. The reason that the companies are still in profit is because the money is flowing in from the reinsurers abroad. Since they agreed to take the risk, they bear the losses as well. But after eight consecutive years of losses, they are getting scared. Some of the reinsurers have already withdrawn from the Nepali aviation market.</p>
<p style="text-align: justify;">
	<strong>How can we lower the high insurance premium?</strong></p>
<p style="text-align: justify;">
	It will take time. It is important to win the confidence of the reinsurers and prove that Nepal’s aviation sector is a safe zone for investment. This can be done only by reducing the losses. Fear is a very dangerous thing. Our terrains are difficult, which has sent a wrong perception. Similarly, loss is also a perception and this can be changed. All we need is 2 to 3 years of good loss ratio.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What do you expect from the Beema Samiti or the government for that matter to facilitate the aviation insurance business in the country? &nbsp;</strong></p>
<p style="text-align: justify;">
	It would be great if the Beema Samiti would help in the process of making an Aviation Pool. Active participation and support is required from them and the Civil Aviation Authority of Nepal (CAAN), especially on the safety side. This should not be only on papers but also in practice.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What are the key challenges and issues facing the aviation insurance industry in Nepal?</strong></p>
<p style="text-align: justify;">
	CAAN has to take the lead role. CAAN and the private airline operators should be more alert. There should be an improvement in monitoring flight data, safety infrastructure etc. For example, many airports in Nepal are not black-topped. When the weather is bad, flights should be aborted and airports should be closed. Individual behavior should be monitored by the operators. We also need to invest in training and skill development of the people involved in the aviation business.&nbsp;</p>
<p style="text-align: justify;">
	<strong>The annual claims payout in the aviation section has been constantly rising. This is bound to further increase the already significantly high aviation insurance premium. How are we going to tackle this problem?</strong></p>
<p style="text-align: justify;">
	There should be a considerable investment in safety measures. I feel that the only way out now is to produce good results for the reinsurers. Losses do happen but the frequency of losses in our country is high. If we go jointly, I feel that this will be a good beginning and we can produce significant results. &nbsp;</p>
<p style="text-align: justify;">
	<strong>There are various types of aviation insurance policies in the world. Are all of them available in Nepal?</strong></p>
<p style="text-align: justify;">
	Three basic types of aviation products are available in Nepal. These are basically for Hull, Liability including Passengers and Crew Personnel Accident and Hull War. Hull insurance covers the insurance of aircraft. Till last year, Combined Single Limit Liability insurance required was USD 60 million per aircraft which has now been revised. Hull War insurance is used in case of war, hijacking etc. &nbsp;</p>
<p style="text-align: justify;">
	<strong>The country’s first-ever aviation insurance summit was organized in the capital recently. How helpful was this summit?</strong></p>
<p style="text-align: justify;">
	Reinsurers came to the market and studied it. Their perception has changed. We took them to see our infrastructures including a mountain flight and had discussions on the current issues of the aviation market. We are trying our best to boost the reinsurers’ confidence. We feel that the summit has helped to bring some positive change in their risk perception of our country.</p>
<div style="text-align: justify;">
	 </div>',
			'published' => true,
			'created' => '2013-03-16',
			'modified' => '2013-03-16',
			'keywords' => '',
			'description' => 'The reason that the companies are still in profit is because the money is inflowing from the reinsurers abroad. Since they agreed to take the risk, they bear the losses as well.',
			'sortorder' => '750',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 5 => array(
		'Article' => array(
			'id' => '782',
			'article_category_id' => '40',
			'title' => 'Cover Story January 2013',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p style="text-align: justify;">
<!--[if gte mso 9]><xml>
 <w:WordDocument>
  <w:View>Normal</w:View>
  <w:Zoom>0</w:Zoom>
  <w:TrackMoves/>
  <w:TrackFormatting/>
  <w:AutoHyphenation/>
  <w:PunctuationKerning/>
  <w:ValidateAgainstSchemas/>
  <w:SaveIfXMLInvalid>false</w:SaveIfXMLInvalid>
  <w:IgnoreMixedContent>false</w:IgnoreMixedContent>
  <w:AlwaysShowPlaceholderText>false</w:AlwaysShowPlaceholderText>
  <w:DoNotPromoteQF/>
  <w:LidThemeOther>EN-US</w:LidThemeOther>
  <w:LidThemeAsian>X-NONE</w:LidThemeAsian>
  <w:LidThemeComplexScript>X-NONE</w:LidThemeComplexScript>
  <w:Compatibility>
   <w:BreakWrappedTables/>
   <w:SnapToGridInCell/>
   <w:WrapTextWithPunct/>
   <w:UseAsianBreakRules/>
   <w:DontGrowAutofit/>
   <w:SplitPgBreakAndParaMark/>
   <w:DontVertAlignCellWithSp/>
   <w:DontBreakConstrainedForcedTables/>
   <w:DontVertAlignInTxbx/>
   <w:Word11KerningPairs/>
   <w:CachedColBalance/>
  </w:Compatibility>
  <w:BrowserLevel>MicrosoftInternetExplorer4</w:BrowserLevel>
  <m:mathPr>
   <m:mathFont m:val="Cambria Math"/>
   <m:brkBin m:val="before"/>
   <m:brkBinSub m:val="--"/>
   <m:smallFrac m:val="off"/>
   <m:dispDef/>
   <m:lMargin m:val="0"/>
   <m:rMargin m:val="0"/>
   <m:defJc m:val="centerGroup"/>
   <m:wrapIndent m:val="1440"/>
   <m:intLim m:val="subSup"/>
   <m:naryLim m:val="undOvr"/>
  </m:mathPr></w:WordDocument>
</xml><![endif]-->	<span style="font-size:14px;"><img alt="coverstory" border="1" height="281" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/international.jpg" vspace="10" width="400" /></span></p>
<p class="MsoNormal" style="text-align: justify;">
	<strong><span style="font-size:14px;"><span class="A8"><span style="font-family: ">By Sushila Budhathoki</span></span></span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<strong><span style="font-size:14px;"><span class="A8"><span style="font-family: ">&nbsp;</span></span></span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<strong><span style="font-size:14px;"><span class="A9">International <span style="line-height: 115%; font-family: ">Degrees in Nepal International Degrees in Nepal</span></span></span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<strong><span style="font-size:14px;"><span class="A9"><span style="line-height: 115%; font-family: ">&nbsp;</span></span></span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span class="A16">G</span><span style="color: black;">one are the days when students had no choice but to go abroad for foreign degrees, thanks to the increasing number of foreign educational institutions which are providing internationally recognized education in Nepal.</span><br />
	<br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">With the growing popularity of A Level, international affiliation has become important for the brand value of the Nepali educational institutions. According to the Ministry of Education (MoE), the importance of foreign affiliation for higher education emerged to the fore zone six years ago in BS 2063 and currently there are 87 educational institutions affiliated to foreign institutions. Among them, 36 institutions are providing Bachelor level and above Degrees (see table). Dr Keshav Kumar Shrestha, Executive Director, Curriculum Development Centre (CDC) of Tribhuvan University, says getting affiliations to foreign universities has seen an upsurge in Nepal in recent years. “These institutions are helping students to broaden their knowledge and make them more practical as well as assisting them to complete the courses more efficiently keeping in mind that the world is turning into a global village,” he says.<br />
	<br />
	<img alt="coverstory" border="1" height="314" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/coverstory(4).jpg" vspace="10" width="469" /></span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">These colleges have emerged at a time when going abroad for study has become a common phenomenon. The foreign institutions operating in Nepal are expected to lower this trend as enrolling in these institutions is more accessible and affordable. According to a government publication titled “Nepal Education in Figures 2012”, a total of 11,912 students applied for permission to go to 53 different countries during fiscal year 2011/12. Among them, 3,759 were female and 8153 were male students. Samjana Basnyat, Principal of International School of Tourism and Hotel Management, says, “As education is vital, a degree from a reputed institution is a feather in your cap. General Nepalis cannot afford to go abroad for higher studies.”</span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">International exposure is one of the factors that helps to make an individual qualified globally. The foreign-affiliated institutions in the country provide an international exposure as well as an international degree to the students. They get the same certificate which the students who go abroad can hope to get. According to Kshitij Regmi, Business Development Director at Islington College, though the fee structure of the foreign-affiliated colleges is a little higher than that of the other local colleges, the students get double advantage when they enroll in foreign-affiliated institutions like Islington. He says, “We are giving a world class British degree here in Nepal and for that we have world class infrastructure and resources. Getting the same degree in Europe requires a lot of resources and is unmatched to what we give here.”</span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">Islington College runs BBA and other specialized courses like BIT- Bachelor in Multi-media, Computing, Networking and IT Security. The college produces 300 plus graduates a year. Regmi adds, “Education is an investment. Now the students have to start building a career right after the Bachelor level unlike till the recent past when one would not bother about a career before completing the Master level. Therefore, they have to invest more to learn earlier and faster. And it’s not only money that they are expected to invest in their education; they need to invest time and planned efforts as well.”<br />
	<br />
	<br />
	<img alt="featured" border="1" height="1002" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/foregin.jpg" vspace="10" width="500" /></span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">The demand for higher level education is growing in Nepal is apparent in the statistics on the students’ number in Nepal. More than 300,000 students appear in the SLC exam every year, and about half of them pass it. Around 100,000 pass the +2 level every year. However, the number of educational institutes providing higher level studies is insufficient to accommodate them all. According to Nepal Education in Figures 2012, there are 9 universities and 3383 higher secondary schools - 2,499 public and 884 private schools. Similarly, there are 1,102 colleges of the universities including 90 public and 1,012 private colleges, 3 medical institutions and 418 Technical Education and Vocational Training (TEVT) institutions. At the existing universities, which offer education up to the PhD level, faculties like humanities, management, education, science and technology and engineering are popular among the students. The international institutions operating in Nepal have included varieties of courses in these fields in addition to other international courses.<br />
	<br />
	<br />
	<img alt="coverstory" border="1" height="169" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/coverstory12.jpg" vspace="10" width="292" /></span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">The education ministry says, while granting permission to students to go abroad or to foreign institutions to open their affiliated institutions here, it gives priority to the subjects which are rare at the Nepali educational institutes. There are different courses for the students to choose from in the fields of management, Information Technology, Hospitality, Science, Computer Science and Fashion Designing. Some of the colleges also run specialized courses. For example, Kathmandu Forestry College runs M.Sc.in Geo- Information; International School of Tourism and Hotel Management runs Master of Innovation and Management in Tourism. Similarly, such institutions are running courses as per the need of time and market. As there is a high demand particularly in the field of management, many of these colleges are running BBA or MBA classes. Human biology is the latest course that is popular among the students.<br />
	<br />
	<br />
	<img alt="coverstory" border="1" height="439" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/coverstory1.jpg" vspace="10" width="450" /></span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">Dr Dev Raj Adhikari, Dean of Central Department of Management, Tribhuvan University (he is also a member of the Expert Committee formed under the Ministry of Education for the monitoring and evaluation of foreign universities), feels the need for welcoming good foreign universities since the trend of global education has already started. According to him, as we have entered into the WTO regime, it is not appropriate to restrict foreign universities from coming to Nepal. He says, “The presence of top quality universities in Nepal will encourage Nepali universities to raise their standards and be on a par with their foreign counterparts. It will also motivate Nepali colleges to increase the quality of their education in order to compete and sustain in the market.”</span></span></p>
<p class="MsoNormal" style="text-align: justify;">
	<strong><span style="font-size:14px;">&nbsp;</span></strong></p>
<p class="Pa15" style="margin-top: 5pt; text-align: justify;">
	<strong><span style="font-size:14px;"><span style="color: black;">Growing popularity</span></span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">The institutions are running international courses particularly because of the demand driven market. According to Biplav Singh, Senior Programme Manager at King’s College, the trend of enrolling in foreign institutions is increasing fast. King’s College which started BBA classes in 2009 has produced 12 MBA graduates and the number of intake this year is 66. Similarly, Lord Buddha Education Foundation which started MBA classes in 2000 has produced around 400 MBA graduates. Dr Tulasi Thapaliya, Under Secretary at the Ministry of Education, says these institutions are fulfilling the demand of those students who are opting for internationally recognized courses. He says, “Colleges are coming to us for the approval of a range of subjects. The colleges also see huge prospects in these courses. That is why they are investing huge amounts to establish their institutions.”</span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">High chances of job placement after the completion of the courses are also luring the students. Timely completion of the courses and possibility of credit transfer to a college abroad are the other attractions. Many colleges are providing skill development trainings beyond their academic courses to enable the students to compete in the international market. King’s College runs an MBA entrepreneurship course for those who are running their own business or planning to start a business on their own. Singh says, “We are working intensively for the placement of our graduates in the job market. We have already started Chinese language classes and a 2-year compulsory English class for MBA students.” Similarly, Islington College organizes job fairs where they call the prospective employers and the chances of students getting jobs are high. Regmi says, “Co-operation from the government and job providers is increasing. Currently we have tie-ups with many national and multinational companies for student placement and internship programmes. Some of our students are earning more than Rs 200,000 per month.”<br />
	<br />
	<br />
	<br />
	<img alt="coverstory" border="1" height="216" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/coverstroy13.jpg" vspace="10" width="193" /></span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">Started in 2004, International School of Tourism and Hotel Management basically produces hotel management graduates, Many of its students are working at the assistant or even executive level positions in many five star hotels in Nepal and abroad, according to Samjana Basnyat, Principal of the College. She says, “We focus on shaping the overall personality of the students because inculcating positive attitude is a must in today’s competitive age. This positive attitude does make an individual far more superior than others.” The college has a high number of students in Higher Diploma in Hotel Management (Equivalent to Bachelors Degree) course.</span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">Many of these colleges are providing full time faculty support which helps students learn beyond their curriculum. The resource centers of these colleges like libraries, computer-labs, science-labs etc are also available full time. Some colleges are offering customized curricula to suit the needs and demand of the Nepali market. Courses like Diploma in Hotel and Restaurant Management, Bachelor in Hotel and Catering Management, Diploma in Travel and Tourism Management etc are being provided by these institutions as the tourism sector is seeing a shortage of qualified manpower. On the other hand, some courses are more advanced than that of Nepali universities, especially the courses offered by the British and American universities. However, the curriculum is not everything about the offered courses, say the experts. Adhikari says, “The quality of faculty and teaching- learning methodology plays a crucial role in setting the quality of the offered degrees. The quality of graduates is equally dependent on the quality of faculty members and the quality of pedagogy practiced.”</span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><strong>&nbsp;<img alt="coverstory 2012" border="1" height="284" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/coverstroy14.jpg" vspace="10" width="260" /></strong></span></p>
<p style="text-align: justify;">
	 </p>
<p class="MsoNormal" style="text-align: justify;">
	<strong><span style="font-size:14px;"><span style="color: black;">Weak monitoring<br />
	</span>&nbsp; <br />
	</span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">The growing demand has led to some unethical practices too. Some colleges are found admitting students beyond their capacities and running courses without any government approval. In September 2012, some 72 colleges across the country including some foreign institutes were found running management, IT and natural science courses without approval from the MoE. Among them, many were reputed foreign institutes and renowned colleges. San Institute of Nursing, the first institute to get foreign affiliation, lost its good reputation when the college could not run smoothly. The college established in 2060 BS (some nine years ago) closed down soon after producing its first batch. According to Basnyat, the failure of the international educational institutes in maintaining academic discipline is becoming a threat for the education sector. She says, “The international educational institutes in Nepal should emphasize on quality education. Failure to maintain academic discipline and merely going for quantity will take us nowhere.”</span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">The government publishes the list of colleges affiliated to foreign institutions after providing affiliations and permission for operating in Nepal. Dr Tulasi Thapaliya, says, “It is high time that we started regulating these international institutions so that they could offer quality education in Nepal.” Many of the parents and students are unaware of the fact that if the institution has not got its courses or curriculum approved from the government, the institution or the course becomes invalid and the students will not get the degree. Without government authorization, the degrees are not recognized. By law, the institutions need government permission before adding courses or branches. However, there are many instances of the colleges not following the rules. Some of the colleges have been found to collect fees from the students or publish advertisements without any assurance that the classes will actually start. Likewise, many of these colleges are offering courses that are beyond their capacity and without permission from the authorities while some are busy in promotions rather than providing quality education.</span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">The ‘Directive for Foreign Educational Institutions Running Higher Level Education, 2059’ has laid down the requirements and procedures needed to be followed to run such colleges. There are provisions laid down in the directive to apply for opening an institution, getting foreign affiliation and adding courses and programmes. The directive has also set down the rules for human resource requirement in the institution, credibility of the university concerned and the relevance of the courses offered in Nepal. However, it is a different matter that MoE has not been able to handle these issues properly.<br />
	<br />
	<br />
	<img alt="cover story january 2012" border="1" height="324" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/glacier15.jpg" vspace="10" width="284" /></span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">Foreign educational institutions that want to operate in Nepal must be accredited by the law of the country of origin, according to the existing Nepali law. The institutes cannot close down its operation before the end of the academic year. They should be purely educational institutions and should follow the directives of 2059 BS. There are norms for all educational institutes. For example, there are separate specific norms set for GCE A Level, Engineering B.E. &amp; IT, Nursing and Hotel Management. There is a committee at the Ministry of Education (MoE) to scrutinize the quality of the international degrees offered in Nepal and the foreign universities that the Nepali colleges are affiliated to. But the committee has not been able to carry out its responsibilities, say the critics. They also point out that many of the colleges are violating the norms. Moreover, they also complain that there is no law to penalize such colleges operating without the government’s approval. The existing Education Act 1971 lacks clear provisions to check such lawbreakers. A bill to amend the Act awaits the parliament’s go-ahead.</span> <br />
	</span></p>
<p style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">Although the international courses have good credibility in the international market, freedom to choose and decide the curriculum by colleges themselves may invite negative consequences, say the experts. They further add that it is necessary to carefully inspect and monitor the standard and quality of pedagogy and courses introduced here. There is an academic council at TU that develops the courses to be run by Nepali colleges. The council also helps to implement the courses developed by foreign universities in Nepal. Dr Shrestha says, “We have also kept in mind the need for course revision at every department. Such courses should also meet national and international market demand.” <br />
	</span></span><span style="font-size:14px;"> </span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">There are many foreign-affiliated colleges in Nepal that are having administrative problems. “Many colleges are in the reviewing process due to the lack of documents. And many of them have been suspended for their failure to prove credibility,” says an officer at MoE, requesting anonymity. According to him, weak monitoring and regulation has helped these colleges to run without proper documentation, infrastructure, capacity, credibility and meeting other required criteria. There is no clear policy on the number of faculties and programmes a colleges can run. The MoE officer adds,” We are reviewing all these colleges for their exact status.” On the other hand, the institutions say that the red tapism in the Nepali bureaucracy is the main problem in timely the updating of their statuses.<br />
	<br />
	<br />
	<img alt="coverstory" border="1" height="198" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/hospital.jpg" vspace="10" width="182" /></span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">A lot of problems are seen in the tuition fees that these institutions raise. There are different fee structures for different faculties. The fees also vary from college to college. Many of these colleges have not properly mentioned how much fee is collected from each student. However, according to Roj Nath Pandey, Assistance Spokesperson for the MoE, there are no written complaints against these institutions for taking high tuition fees. He says, “We would instantly take action if any complaint is lodged in this regard. They cannot take fees more than what they have mentioned in their applications seeking our approval for the course.”&nbsp;&nbsp;</span></span></p>
<p class="MsoNormal" style="text-align: justify;">
	<strong><span style="font-size:14px;"><span style="color: black;">The way forward</span></span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">Many of these colleges have just started their sessions and the results are yet to come. Yet, it should be recognized that these emerging affiliates of international institutions have raised the hope of developing Nepal as an international education hub. “If we carry forward the mission to fulfill this dream, it is possible to make Nepal an educational hub,” opines Dr Shrestha. According to him, the basic infrastructure to develop Nepal as an education hub must be there and the academic calendar should be updated. He says, “Activities like padlocking and protests at TU are a huge setback to this mission. The resources within the universities should be well managed first to start the mission of developing the country into an international education hub. Also, a timely change in the curriculum is a must.”</span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">International affiliations have also opened the door to the international training institutes. Linked with The London Chamber of Commerce and Industry (LCCI), LCCI Nepal has been working with around 15 colleges, mostly with foreign affiliation. “Ours is a new initiative. We work in the Nepali education sector as an outsourced knowledge provider. Our training enables students to gain knowledge beyond the course. They can work in whichever country they go because they are trained professionally,” shares Dikshanta Bhatta, Assistant Manager at LCCI Nepal. He adds, “Our programmes are so popular that we are now targeting also the colleges that are affiliated to Nepali universities.”</span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">The college operators are also hopeful of a bright future in Nepal. They believe that if they focus on providing quality education to the Nepali students and offer a moderate fee structure, they will be able to get enough number of students. Regmi says, “Nepal is a strategically located country. It has good links to various countries including neighbouring India, China, Pakistan and Bangladesh. Technical subjects such as IT have good prospects.” He demands policies facilitating the global system which he says is a basic requirement of the global market. Regmi says, “We are in an open market and have a dynamic future. We could work better than this if we had more friendly policies.”</span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">The MoE, on the other hand, is planning to intensify the monitoring process this year. Dr Thapaliya Says, “Now we are taking action against some of the colleges which are found admitting more students than they can effectively handle. We are also reviewing the performances of these colleges.” The Supreme Court has also recently issued an 11-point order seeking to regulate the freewheeling private schools and colleges including the foreign institutions in response to a writ filed by advocates. This verdict will have a strong impact on the colleges which are not performing well.</span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="line-height: 115%; color: black;">Some of the institutions are also conducting monitoring and evaluation by themselves for quality assurance. However, the bad image of some colleges is casting a shadow on the good private colleges operating in Nepal under affiliation from foreign universities. The colleges, too, are afraid that the wrong deeds of a few colleges might ruin all of them. Basnyat shares, “Our plan is to keep upgrading ourselves in terms of infrastructure, quality education etc and provide the necessary facilities to the students as well as increase collaboration with the international players and get affiliations from different hospitality outlets so that our graduates could get multiple avenues.”</span></span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="line-height: 115%; color: black;">&nbsp;</span></span></p>
<p class="MsoNormal" style="text-align: justify;">
	<strong><span style="font-size:14px;"><span class="A3">‘There is a need to regulate and maintain foreign colleges to </span><span class="A3">prevent unfair </span><span class="A3"><span style="line-height: 115%; font-family: ">Competition’</span></span></span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<strong><span style="font-size:14px;"><span class="A3"><span style="line-height: 115%; font-family: "><br />
	&nbsp;<img alt="tulsi" border="1" height="307" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/tulsi.jpg" vspace="10" width="269" /></span></span></span></strong></p>
<address>
	<span style="font-size:12px;"><strong><span style="color: black;">DR TULASI THAPALIYA </span></strong></span></address>
<address>
	<span style="font-size:12px;"><strong><span class="A0" style="">Under Secretary </span></strong></span></address>
<address>
	<span style="font-size:12px;"><strong><span class="A0" style=""><span style="line-height: 115%;">Ministry of Education</span></span></strong></span></address>
<p class="MsoNormal" style="text-align: justify;">
	<strong style="font-size: 14px;"><span style="color: black;">How did the trend of establishing colleges with international affiliations begin in Nepal?</span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">Globalization of education compelled many countries to run academic programmes which are popular internationally. The charm of studying foreign courses in one’s own country and getting a certificate recognized globally at the end is high in any country. It looks so normal today that it has become something of a trend. Nepal, too, could not remain unaffected from this charm as more and more colleges in Asia started introducing international courses through affiliations with foreign colleges/universities. Nepal took its cue from this international trend.</span><br />
	<br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><strong><span style="color: black;">What has been the contribution of these foreign affiliated colleges? Has the Ministry made any evaluation?</span>&nbsp; </strong><br />
	</span></p>
<p class="Pa10" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">The Ministry is yet to carry out any evaluation of that sort. However, there are some good aspects that these colleges have brought about. For example, the students in Nepal have exposure to international curricula. They don’t need to go abroad for the foreign courses which are already available in Nepal, thanks to these foreign-affiliated colleges. Another advantage is that they get choices in the curriculum. And the most important thing is that the institutions providing higher education in Nepal can learn from the experiences of these foreign-affiliated colleges.</span></span></p>
<p class="MsoNormal" style="text-align: justify;">
	<strong><span style="font-size:14px;"><span style="color: black;"><br />
	</span></span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<strong><span style="font-size:14px;"><span style="color: black;">How does the MoE monitor the foreign-affiliated colleges?</span></span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">We have a monitoring mechanism. There is a committee at the MOE to monitor these institutions. We are planning to intensify the monitoring process this year. The monitoring process will be more regular in the days to come.</span><br />
	<br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><strong><span style="color: black;">What are the criteria for permitting colleges to get foreign affiliations?</span> <br />
	</strong></span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">Colleges in Nepal are running international courses because of the market demand. If there were no students demanding these courses, then these institutions would not come to us to get these courses approved by the ministry. The MoE gives the approval for these courses but this approval is subject to consent from the University Grant Commission.</span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">There are a number of criteria for getting foreign affiliations for Colleges. The process begins with the institutions wishing to run the academic programmes of international universities applying to the MoE. Their applications must include the consent of the University Grant Commission and other professional bodies. Then we observe the overall status of the applying colleges. We have a scrutiny mechanism to see whether the college is really in a position to offer the intended courses or not. We look at their physical facilities, infrastructure, human resource, credibility and validity of the international institutions offering affiliations.</span> <br />
	</span></p>
<p style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">Sometimes, the foreign institutions offering affiliations to Nepali institutions may not have much credibility back in their own countries. We also consider the demand of the said courses in Nepal. Particularly, we encourage those courses that are not offered by the Nepali universities. These are some of the conditions and criteria that we follow. There is a guideline already approved by the cabinet that the criteria in detail. </span><br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><strong><span style="color: black;">There are a range of subjects from management and hospitality to information technology to culinary arts. But many of the foreign-affiliated colleges are running BBA or MBA classes. Why?</span> <br />
	</strong></span></p>
<p style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">It is not about the BBA or MBA classes; it is about the demand of the students. However, there are two different ways of regulating and managing educational programmes. One, you could run trial courses to see what courses are in demand. The other option is the colleges come forward with proposals seeking approval for the courses they want to teach. The main idea is the demand for the subject by the students. If the demand rises, these subjects could be offered by many colleges. Yesterday only, I got a proposal for running micro-biology classes by one of the colleges. Many colleges are planning to run different management courses. </span></span><span style="font-size:14px;"> </span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa23" style="margin-top: 5pt; text-align: justify;">
	<span style="font-size:14px;"><strong><span style="color: black;">It is often complained that foreign affiliations are hampering the higher education system in Nepal. What do you have to say? </span></strong></span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">There are two sides to this complaint. One is because of the rise in the number of foreign affiliated colleges, many students are choosing them instead of colleges that teach courses of Nepali universities. This could be affecting the education system of Nepal.</span> <br />
	</span></p>
<p class="Pa23" style="margin-top: 5pt; text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">The other side is a positive one. The existing colleges and universities in Nepal get the chance to learn from the foreign-affiliated colleges and their new courses. Foreign-affiliated colleges can create an environment of completion where the colleges teaching courses of Nepali varsities, too, can become innovative in their courses and/ or curricula. Of course, there is a need to regulate these institutions properly to prevent unfair competition.<br />
	<br />
	<br />
	</span><strong><span style="color: black;"> </span></strong></span></p>
<p class="Pa23" style="margin-top: 5pt; text-align: justify;">
	<span style="font-size:14px;"><strong><span style="color: black;">It is said that the trend to go abroad for studies among Nepali students would have been low had there been foreign-affiliated colleges in Nepal in the past, say as back as a decade or so? What do you think?</span></strong></span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">It could have, perhaps, but I am not sure. It’s not only for the reason of education that the Nepali students go for abroad studies; there are other reasons as well. For example, they go abroad to earn while they learn. They might even want to learn beyond the courses they are enrolled to. Students even go to different countries to learn the same courses; they pick the country of their choice. International exposure and other opportunities are other important factors behind the current trend of going for abroad studies.</span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="line-height: 115%; color: black;">So, the presence of foreign-affiliated colleges in Nepal may not lower the abroad study graph very drastically. It could, however, contribute to some extent in lowering the number of students going abroad for studies. But it cannot completely stop the trend.</span></span></p>
<p class="MsoNormal" style="text-align: justify;">
	 </p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:16px;"><span style="line-height: 115%; color: black;">&nbsp;</span></span><strong style="font-size: 16px;"><span class="A3">‘Timely revision of <span style="line-height: 115%; font-family: ">curriculum is a must’</span></span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span class="A3"><span style="line-height: 115%; font-family: "><img alt="keshav" border="1" height="305" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/keshavkumar.jpg" vspace="10" width="300" /><br />
	</span></span></span></p>
<address>
	<span style="font-size:14px;"><strong><span style="color: black;">DR KESHAV KUMAR SHRESTHA </span></strong></span></address>
<address>
	<span style="font-size:14px;"><strong><span class="A0">Executive Director </span></strong></span></address>
<address>
	<span style="font-size:14px;"><strong><span class="A0"><span style="line-height: 115%; font-family: ">Curriculum Development Centre (CDC), TU</span></span></strong></span></address>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><strong><span class="A0"><span style="line-height: 115%; font-family: ">&nbsp;</span></span></strong></span></p>
<p class="MsoNormal" style="text-align: justify;">
	<strong style="font-size: 14px;"><span style="color: black;">Why do Nepali colleges need affiliations with foreign universities?</span></strong></p>
<p style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">Nepali colleges have joined the trend of getting affiliated to foreign universities lately. The foreign courses taught by these colleges have helped the Nepali students in broadening their knowledge and getting, perhaps, more practical education. Today, the world has become a global village; everything is globalised, including education. Colleges in one country get affiliated with foreign universities in order to teach foreign courses. This trend has helped the Nepali students in more than one way. </span><br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa23" style="margin-top: 5pt; text-align: justify;">
	<strong><span style="font-size:14px;"><span style="color: black;">Why doesn’t the CDC develop such courses on its own? </span></span></strong></p>
<p style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">Tribhuvan University has its own way and process of developing curricula. CDC develops courses on the basis of their need. For example, if there is a four-year course, we discuss its merits and demerits in depth. With the teamwork of ‘subject committees’, CDC not only develops curricula but also conducts seminars, orientation programmes and workshops to help the teaching and learning of foreign courses in the country. We are also careful about updating and even revising the TU courses from time to time. There is an Academic Council at TU that oversees the course developing process. Such courses should also meet national and international market interests. I think TU needs to implement the credit hours requirement system for its courses too. </span><br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><strong><span style="color: black;">Are the foreign courses beneficial for the Nepali students in the long run?</span></strong> <br />
	</span></p>
<p class="Pa10" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">There are professional as well as academic benefits for the Nepali students from the foreign courses. These courses also ensure better career opportunities and future for the students. </span></span></p>
<p style="text-align: justify;">
	<strong><span style="font-size:14px;"><span style="color: black;"><br />
	What are the possibilities of developing Nepal into an educational hub?</span></span><br />
	</strong></p>
<p class="Pa10" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">This is a broad topic to discuss. First, we need the basic infrastructure to develop Nepal as an education hub. The academic calendar should be updated and other new changes should be introduced. Recent activities like padlocking and protests happening at TU are a huge setback to such a m mission. Before Nepal can be developed into an international education hub, we should be able to manage the resources within the Nepali universities well. And, I repeat, timely changes in the curricula are a must. </span></span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;">&nbsp;</span></p>
<p style="text-align: justify;">
	<span style="font-size:14px;"><strong><span style="color: black;">How is CDC supporting the students’ educational freedom to take courses of their choice?</span></strong> </span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">We definitely pay attention to the interests of the students by keeping ourselves abreast with the market demand. The basic thing here is to enhance the quality of education. The students are given utmost freedom to choose from the available courses. TU has eight-semester BBA and four-semester MBA courses. Along with the freedom, the students should not forget the competition in the market and the credibility of the available courses.</span></span></p>
<p class="MsoNormal" style="text-align: justify;">
	<strong><span style="font-size:14px;">&nbsp;</span></strong></p>
<p class="Pa23" style="margin-top: 5pt; text-align: justify;">
	<strong><span style="font-size:14px;"><span style="color: black;">What changes in TU courses is CDC bringing in the coming days?</span></span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">A change may not always mean an immediate broad adjustment. We change existing courses or introduce new ones by analyzing the needs and demands in the market. For example, we have paid much attention to developing and bringing new courses in of Information Technology, Hotel Management, BBA and others. There is a demand for these courses as they are more likely to give the students a secured career.</span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<strong><span style="font-size:14px;">&nbsp;</span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<strong><span style="font-size:14px;"><span style="color: black;">There is a common complaint that the annual system hasn’t work well in the education sector. What is CDC doing to address this complaint?</span> <br />
	</span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">The annual system focuses on mass education. However, it needs to be changed according to time. Recently, we have developed a new course, Tea Technology and Management (BSC Tea Technology), at Mechi Multiple Campus, Jhapa.</span> <br />
	</span></p>
<p style="text-align: justify;">
	<span style="font-size:14px;"><br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><strong><span style="color: black;">Are the foreign courses more practical and skill-oriented?</span> <br />
	</strong></span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="line-height: 115%; color: black;">The most important thing is that these courses have a good reputation in the market. However, it is also true that only a few percent of fresh graduates get good jobs in the market. So, it’s high time to ensure the production of quality and competitive manpower by domestic as well as foreign-affiliated colleges.</span></span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;">&nbsp;</span></p>
<p style="text-align: justify;">
<!--[if gte mso 9]><xml>
 <w:LatentStyles DefLockedState="false" DefUnhideWhenUsed="true"
  DefSemiHidden="true" DefQFormat="false" DefPriority="99"
  LatentStyleCount="267">
  <w:LsdException Locked="false" Priority="0" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Normal"/>
  <w:LsdException Locked="false" Priority="9" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="heading 1"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 2"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 3"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 4"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 5"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 6"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 7"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 8"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 9"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 1"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 2"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 3"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 4"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 5"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 6"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 7"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 8"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 9"/>
  <w:LsdException Locked="false" Priority="35" QFormat="true" Name="caption"/>
  <w:LsdException Locked="false" Priority="10" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Title"/>
  <w:LsdException Locked="false" Priority="1" Name="Default Paragraph Font"/>
  <w:LsdException Locked="false" UnhideWhenUsed="false" Name="Body Text"/>
  <w:LsdException Locked="false" Priority="11" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Subtitle"/>
  <w:LsdException Locked="false" Priority="22" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Strong"/>
  <w:LsdException Locked="false" Priority="20" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Emphasis"/>
  <w:LsdException Locked="false" Priority="59" SemiHidden="false"
   UnhideWhenUsed="false" Name="Table Grid"/>
  <w:LsdException Locked="false" UnhideWhenUsed="false" Name="Placeholder Text"/>
  <w:LsdException Locked="false" Priority="1" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="No Spacing"/>
  <w:LsdException Locked="false" Priority="60" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Shading"/>
  <w:LsdException Locked="false" Priority="61" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light List"/>
  <w:LsdException Locked="false" Priority="62" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Grid"/>
  <w:LsdException Locked="false" Priority="63" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 1"/>
  <w:LsdException Locked="false" Priority="64" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 2"/>
  <w:LsdException Locked="false" Priority="65" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 1"/>
  <w:LsdException Locked="false" Priority="66" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 2"/>
  <w:LsdException Locked="false" Priority="67" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 1"/>
  <w:LsdException Locked="false" Priority="68" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 2"/>
  <w:LsdException Locked="false" Priority="69" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 3"/>
  <w:LsdException Locked="false" Priority="70" SemiHidden="false"
   UnhideWhenUsed="false" Name="Dark List"/>
  <w:LsdException Locked="false" Priority="71" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Shading"/>
  <w:LsdException Locked="false" Priority="72" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful List"/>
  <w:LsdException Locked="false" Priority="73" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Grid"/>
  <w:LsdException Locked="false" Priority="60" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Shading Accent 1"/>
  <w:LsdException Locked="false" Priority="61" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light List Accent 1"/>
  <w:LsdException Locked="false" Priority="62" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Grid Accent 1"/>
  <w:LsdException Locked="false" Priority="63" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 1 Accent 1"/>
  <w:LsdException Locked="false" Priority="64" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 2 Accent 1"/>
  <w:LsdException Locked="false" Priority="65" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 1 Accent 1"/>
  <w:LsdException Locked="false" UnhideWhenUsed="false" Name="Revision"/>
  <w:LsdException Locked="false" Priority="34" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="List Paragraph"/>
  <w:LsdException Locked="false" Priority="29" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Quote"/>
  <w:LsdException Locked="false" Priority="30" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Intense Quote"/>
  <w:LsdException Locked="false" Priority="66" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 2 Accent 1"/>
  <w:LsdException Locked="false" Priority="67" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 1 Accent 1"/>
  <w:LsdException Locked="false" Priority="68" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 2 Accent 1"/>
  <w:LsdException Locked="false" Priority="69" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 3 Accent 1"/>
  <w:LsdException Locked="false" Priority="70" SemiHidden="false"
   UnhideWhenUsed="false" Name="Dark List Accent 1"/>
  <w:LsdException Locked="false" Priority="71" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Shading Accent 1"/>
  <w:LsdException Locked="false" Priority="72" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful List Accent 1"/>
  <w:LsdException Locked="false" Priority="73" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Grid Accent 1"/>
  <w:LsdException Locked="false" Priority="60" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Shading Accent 2"/>
  <w:LsdException Locked="false" Priority="61" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light List Accent 2"/>
  <w:LsdException Locked="false" Priority="62" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Grid Accent 2"/>
  <w:LsdException Locked="false" Priority="63" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 1 Accent 2"/>
  <w:LsdException Locked="false" Priority="64" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 2 Accent 2"/>
  <w:LsdException Locked="false" Priority="65" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 1 Accent 2"/>
  <w:LsdException Locked="false" Priority="66" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 2 Accent 2"/>
  <w:LsdException Locked="false" Priority="67" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 1 Accent 2"/>
  <w:LsdException Locked="false" Priority="68" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 2 Accent 2"/>
  <w:LsdException Locked="false" Priority="69" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 3 Accent 2"/>
  <w:LsdException Locked="false" Priority="70" SemiHidden="false"
   UnhideWhenUsed="false" Name="Dark List Accent 2"/>
  <w:LsdException Locked="false" Priority="71" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Shading Accent 2"/>
  <w:LsdException Locked="false" Priority="72" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful List Accent 2"/>
  <w:LsdException Locked="false" Priority="73" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Grid Accent 2"/>
  <w:LsdException Locked="false" Priority="60" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Shading Accent 3"/>
  <w:LsdException Locked="false" Priority="61" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light List Accent 3"/>
  <w:LsdException Locked="false" Priority="62" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Grid Accent 3"/>
  <w:LsdException Locked="false" Priority="63" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 1 Accent 3"/>
  <w:LsdException Locked="false" Priority="64" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 2 Accent 3"/>
  <w:LsdException Locked="false" Priority="65" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 1 Accent 3"/>
  <w:LsdException Locked="false" Priority="66" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 2 Accent 3"/>
  <w:LsdException Locked="false" Priority="67" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 1 Accent 3"/>
  <w:LsdException Locked="false" Priority="68" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 2 Accent 3"/>
  <w:LsdException Locked="false" Priority="69" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 3 Accent 3"/>
  <w:LsdException Locked="false" Priority="70" SemiHidden="false"
   UnhideWhenUsed="false" Name="Dark List Accent 3"/>
  <w:LsdException Locked="false" Priority="71" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Shading Accent 3"/>
  <w:LsdException Locked="false" Priority="72" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful List Accent 3"/>
  <w:LsdException Locked="false" Priority="73" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Grid Accent 3"/>
  <w:LsdException Locked="false" Priority="60" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Shading Accent 4"/>
  <w:LsdException Locked="false" Priority="61" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light List Accent 4"/>
  <w:LsdException Locked="false" Priority="62" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Grid Accent 4"/>
  <w:LsdException Locked="false" Priority="63" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 1 Accent 4"/>
  <w:LsdException Locked="false" Priority="64" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 2 Accent 4"/>
  <w:LsdException Locked="false" Priority="65" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 1 Accent 4"/>
  <w:LsdException Locked="false" Priority="66" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 2 Accent 4"/>
  <w:LsdException Locked="false" Priority="67" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 1 Accent 4"/>
  <w:LsdException Locked="false" Priority="68" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 2 Accent 4"/>
  <w:LsdException Locked="false" Priority="69" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 3 Accent 4"/>
  <w:LsdException Locked="false" Priority="70" SemiHidden="false"
   UnhideWhenUsed="false" Name="Dark List Accent 4"/>
  <w:LsdException Locked="false" Priority="71" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Shading Accent 4"/>
  <w:LsdException Locked="false" Priority="72" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful List Accent 4"/>
  <w:LsdException Locked="false" Priority="73" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Grid Accent 4"/>
  <w:LsdException Locked="false" Priority="60" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Shading Accent 5"/>
  <w:LsdException Locked="false" Priority="61" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light List Accent 5"/>
  <w:LsdException Locked="false" Priority="62" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Grid Accent 5"/>
  <w:LsdException Locked="false" Priority="63" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 1 Accent 5"/>
  <w:LsdException Locked="false" Priority="64" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 2 Accent 5"/>
  <w:LsdException Locked="false" Priority="65" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 1 Accent 5"/>
  <w:LsdException Locked="false" Priority="66" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 2 Accent 5"/>
  <w:LsdException Locked="false" Priority="67" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 1 Accent 5"/>
  <w:LsdException Locked="false" Priority="68" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 2 Accent 5"/>
  <w:LsdException Locked="false" Priority="69" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 3 Accent 5"/>
  <w:LsdException Locked="false" Priority="70" SemiHidden="false"
   UnhideWhenUsed="false" Name="Dark List Accent 5"/>
  <w:LsdException Locked="false" Priority="71" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Shading Accent 5"/>
  <w:LsdException Locked="false" Priority="72" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful List Accent 5"/>
  <w:LsdException Locked="false" Priority="73" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Grid Accent 5"/>
  <w:LsdException Locked="false" Priority="60" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Shading Accent 6"/>
  <w:LsdException Locked="false" Priority="61" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light List Accent 6"/>
  <w:LsdException Locked="false" Priority="62" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Grid Accent 6"/>
  <w:LsdException Locked="false" Priority="63" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 1 Accent 6"/>
  <w:LsdException Locked="false" Priority="64" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 2 Accent 6"/>
  <w:LsdException Locked="false" Priority="65" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 1 Accent 6"/>
  <w:LsdException Locked="false" Priority="66" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 2 Accent 6"/>
  <w:LsdException Locked="false" Priority="67" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 1 Accent 6"/>
  <w:LsdException Locked="false" Priority="68" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 2 Accent 6"/>
  <w:LsdException Locked="false" Priority="69" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 3 Accent 6"/>
  <w:LsdException Locked="false" Priority="70" SemiHidden="false"
   UnhideWhenUsed="false" Name="Dark List Accent 6"/>
  <w:LsdException Locked="false" Priority="71" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Shading Accent 6"/>
  <w:LsdException Locked="false" Priority="72" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful List Accent 6"/>
  <w:LsdException Locked="false" Priority="73" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Grid Accent 6"/>
  <w:LsdException Locked="false" Priority="19" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Subtle Emphasis"/>
  <w:LsdException Locked="false" Priority="21" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Intense Emphasis"/>
  <w:LsdException Locked="false" Priority="31" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Subtle Reference"/>
  <w:LsdException Locked="false" Priority="32" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Intense Reference"/>
  <w:LsdException Locked="false" Priority="33" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Book Title"/>
  <w:LsdException Locked="false" Priority="37" Name="Bibliography"/>
  <w:LsdException Locked="false" Priority="39" QFormat="true" Name="TOC Heading"/>
 </w:LatentStyles>
</xml><![endif]--><!--[if gte mso 10]>
<style>
 /* Style Definitions */
 table.MsoNormalTable
	{mso-style-name:"Table Normal";
	mso-tstyle-rowband-size:0;
	mso-tstyle-colband-size:0;
	mso-style-noshow:yes;
	mso-style-priority:99;
	mso-style-qformat:yes;
	mso-style-parent:"";
	mso-padding-alt:0in 5.4pt 0in 5.4pt;
	mso-para-margin-top:0in;
	mso-para-margin-right:0in;
	mso-para-margin-bottom:10.0pt;
	mso-para-margin-left:0in;
	line-height:115%;
	mso-pagination:widow-orphan;
	font-size:11.0pt;
	font-family:"Calibri","sans-serif";
	mso-ascii-font-family:Calibri;
	mso-ascii-theme-font:minor-latin;
	mso-hansi-font-family:Calibri;
	mso-hansi-theme-font:minor-latin;
	mso-bidi-font-family:"Times New Roman";
	mso-bidi-theme-font:minor-bidi;}
</style>
<![endif]-->	<span style="font-size:14px;"><br />
	</span></p>',
			'published' => true,
			'created' => '2013-02-07',
			'modified' => '2013-03-15',
			'keywords' => '',
			'description' => 'Gone are the days when students had no choice but to go abroad for foreign degrees, thanks to the increasing number of foreign educational institutions which are providing internationally recognized education in Nepal.',
			'sortorder' => '671',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 6 => array(
		'Article' => array(
			'id' => '774',
			'article_category_id' => '40',
			'title' => 'Learning : The Ropes December 2012',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
<!--[if gte mso 9]><xml>
 <w:WordDocument>
  <w:View>Normal</w:View>
  <w:Zoom>0</w:Zoom>
  <w:TrackMoves/>
  <w:TrackFormatting/>
  <w:PunctuationKerning/>
  <w:ValidateAgainstSchemas/>
  <w:SaveIfXMLInvalid>false</w:SaveIfXMLInvalid>
  <w:IgnoreMixedContent>false</w:IgnoreMixedContent>
  <w:AlwaysShowPlaceholderText>false</w:AlwaysShowPlaceholderText>
  <w:DoNotPromoteQF/>
  <w:LidThemeOther>EN-US</w:LidThemeOther>
  <w:LidThemeAsian>X-NONE</w:LidThemeAsian>
  <w:LidThemeComplexScript>X-NONE</w:LidThemeComplexScript>
  <w:Compatibility>
   <w:BreakWrappedTables/>
   <w:SnapToGridInCell/>
   <w:WrapTextWithPunct/>
   <w:UseAsianBreakRules/>
   <w:DontGrowAutofit/>
   <w:SplitPgBreakAndParaMark/>
   <w:DontVertAlignCellWithSp/>
   <w:DontBreakConstrainedForcedTables/>
   <w:DontVertAlignInTxbx/>
   <w:Word11KerningPairs/>
   <w:CachedColBalance/>
  </w:Compatibility>
  <w:BrowserLevel>MicrosoftInternetExplorer4</w:BrowserLevel>
  <m:mathPr>
   <m:mathFont m:val="Cambria Math"/>
   <m:brkBin m:val="before"/>
   <m:brkBinSub m:val="--"/>
   <m:smallFrac m:val="off"/>
   <m:dispDef/>
   <m:lMargin m:val="0"/>
   <m:rMargin m:val="0"/>
   <m:defJc m:val="centerGroup"/>
   <m:wrapIndent m:val="1440"/>
   <m:intLim m:val="subSup"/>
   <m:naryLim m:val="undOvr"/>
  </m:mathPr></w:WordDocument>
</xml><![endif]-->	<span style="font-size:12px;"><img alt="learningtheropes" border="1" height="181" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/rashesh.jpg" vspace="10" width="338" /><br />
	<br />
	<br />
	<img alt="telephone" border="1" height="165" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/camels.jpg" vspace="10" width="249" /><br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:12px;"><span color:="" myriad="" style="font-family: ">By Rashesh Vaidya</span></span></p>
<p class="MsoNormal">
	<span style="font-size:12px;"><span color:="" myriad="" style="font-family: ">&nbsp;</span></span></p>
<p class="Pa9">
	<strong><span style="font-size:12px;"><span style="color: black;">Camels and Eagles </span></span></strong></p>
<p class="MsoNormal">
	<strong><span style="font-size:12px;"><span class="A28"><span style="line-height: 115%; font-family: ">The rating system identifies the problematic banks which are in need of increased supervision.</span></span></span></strong></p>
<p class="MsoNormal">
	<strong><span style="font-size:12px;"><span class="A28"><span style="line-height: 115%; font-family: ">&nbsp;</span></span></span></strong></p>
<p class="Default">
	<span style="font-size:12px;"><span class="A4">A </span><span style="color: black;">commercial bank’s performance can be measured in terms of its ability to meet the expectations of its owners, employees, depositors and borrowers. A bank’s performance can be evaluated by analysing its financial reports- report of condition and report of income. The bank’s management has to protect the interests of all concerned parties - creditors, owners and others. They have to ensure minimum operating efficiency and keep the bank’s risks at a minimum level. Their survival depends upon their operating performance.</span> <br />
	</span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:12px;"><span style="color: black;">Commercial banks are the most regulated of all the institutions in the financial system because of the direct impact of their activities on the economy. Every commercial bank is regulated and governed by their regulator i.e. the Nepal Rastra Bank (NRB), the country’s central bank. The NRB inspects and supervises (on-site and off-site) the banks and financial institutions (BFIs) to ensure that the banks operate in a safe and sound manner. Sections 49(1) and 49(2) and 52(1) to 52(5) of the Bank and Financial Institution Act (BAFIA), 2006 and sections 76 to 88 of the Nepal Rastra Bank Act, 2006 have given full authority to the NRB to direct, supervise and inspect the BFIs it has issued licenses to.&nbsp;&nbsp; </span></span><span style="font-size:12px;"> <span style="color: black;"><br />
	</span></span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">For this purpose, the regulators have developed a uniform numerical rating system called CAMELS Rating, which is based on the financial statements of the banks and on-site examinations. The Bank Supervision Department of NRB can carry out on-site examination of commercial banks in Nepal by sending examination teams to the commercial banks. Onsite examination can be either corporate level covering all aspects of the functioning of the bank or can be a targeted branch-level inspection. On completion of the on-site –examination, examiners perform CAMELS rating of the bank. This rating is exclusively used for supervisory purpose and is not revealed to the general public.&nbsp;&nbsp; </span></span><span style="font-size:12px;"> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">The examiners or inspection team evaluates a bank’s health on the basis of the overall rating based on capital adequacy, assets quality, management quality, earning ability, liquidity position and sensitivity to market risks (systematic risks). The Federal Reserve Regulators in the USA developed the numerical CAMELS rating system in the early 1970s to help structure their bank examination process.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">The BFIs are categorised into different groups based on their overall strength, quality and operating soundness. The rating system identifies the problematic banks which are in need of increased supervision. In the CAMELS rating system, each bank is assigned two sets of ratings:</span><br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">&nbsp;&nbsp;&nbsp;&nbsp; 1.<span font-size-adjust:="" font-stretch:="" font-style:="" font-variant:="" font-weight:="" line-height:="" new="" style="font-family: " times=""> </span></span><span style="color: black;">Performance Ratings, which comprise six individual ratings that address each of the CAMELS components; and</span> <br />
	</span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:12px;"><span style="color: black;">&nbsp;&nbsp;&nbsp;&nbsp; 2. An overall Composite Rating, which is a single rating based on a comprehensive assessment of the bank’s overall condition.Both the&nbsp;&nbsp; ratings are scored on a numerical scale of 1 to 5 in the ascending order of supervisory concern where “1” represents the best rating and “5” the worst. </span></span></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:12px;"><span style="color: black;">Here is a description of the rating scores for each of the six components: </span></span></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span></p>
<p class="Pa7" style="text-align:justify">
	<strong><span style="font-size:12px;"><span style="color: black;">Rating 1 (A) indicates very strong performance </span></span></strong></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp;</span></strong></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">Rating 2 (B) indicates above-average performance that adequately provides for a safe and sound operation of the BFIs.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">Rating 3 (C) indicates performance that is flawed to some degree.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">Rating 4 (D) indicates unsatisfactory performance which, if left unchecked, could threaten the solvency of the BFIs.</span> <br />
	</span></p>
<p class="Pa7" style="text-align:justify">
	<span style="font-size:12px;"><span style="color: black;">Rating 5 (E) indicates very unsatisfactory performance and calls for immediate remedial attention for the survival of the BFIs. </span></span></p>
<p class="Default">
	<span style="font-size:12px;"><br />
	<span style="color: black;">The rating of banks can be further developed by giving a score to each component of the CAMELS, known as the Composite CAMELS Rating Score. The Composite CAMELS Rating can be calculated as:</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">Composite CAMELS Rating= C(0.25)+A(0.25)+M(0.25)+E(0.10)+ L(0.10)+S(0.05)</span> <br />
	</span></p>
<p>
	 </p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">Each of the above six parameters can be weighted on a scale of 1 to 100 and contains a number of sub-parameters with individual weightage. The banks should be rated on a five-point scale (A to E) based on the lines of the international CAMELS rating model.</span><br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">The CAMELS system evaluates banks on the following six parameters:</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1.<span font-size-adjust:="" font-stretch:="" font-style:="" font-variant:="" font-weight:="" line-height:="" new="" style="font-family: " times="">&nbsp;&nbsp; </span></span><span style="color: black;">Capital Adequacy: Capital adequacy has been the main pillar of existence of any bank. Banks have to maintain a proper mix of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; different types of capitals to avoid pressure on their dividend policies and inadequacy of total capital funds against the risk exposure. Capital adequacy is measured by the ratio of capital to risk-weighted assets (CRAR). A sound capital base strengthens the confidence of depositors.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">2. Asset Quality: One of the indicators for asset quality is the ratio of non-performing loans to total loans (Gross Non-Performing Assets - GNPA). The gross non-performing loans to gross advances ratio is more indicative of the quality of credit decisions made by bankers. A higher GNPA is indicative of poor credit decision-making.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">3. Management: The ratio of non-interest expenditures to total assets can be one of the measures to assess the working of the management. This variable, which includes a variety of expenses, such as payroll, workers’ compensation and training investment, reflects the management policy stance.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">4. Earnings: It can be measured as the return on asset ratio.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">5. Liquidity: The cash maintained by a bank and balances with the central bank to the total asset ratio is an indicator of the bank’s liquidity. In general, banks with a larger volume of liquid assets are perceived safe, since these assets would allow them to meet unexpected withdrawals.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">Section 38 of BAFIA, 2006 provides for maintaining a good liquidity position by the BFIs. Commercial banks are required to maintain CRR (cash reserve ratio) at 5 per cent of their total deposits. The NRB monitors the CRR weekly, and the liquidity profile on a quarterly basis.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">6. Sensitivity to Market Risks/Systems and Control: Risks associated with adverse movements in the exchange rates (including gold positions), interest rates, liquidity and investment in equity are covered under market risk management. A bank faces market risks either from its investments in government securities and bonds or from the exchange rate risk that persist in matching position. The market risk is managed by the banks’ Asset and Liability Committee (ALCO) which assesses policies and levels of risk appetite.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">However, the CAMELS approach has inherent indeterminacy and subjectivity. There can be instances when an examination of the accounting records cannot decide whether to give an average or below average score. The ‘good’ and ‘bad’ indicators are easy to spot, but the ‘in-betweens’ are not. This is a problem of indeterminacy. But when bank inspectors are forced to make a judgment, it leads to the second problem of subjectivity and hence these ratings could come up with differing levels of expectations and perspectives. Among the six variables, ‘M’ has been missing - the one which assesses the management quality and corporate governance. This has been a paradox because most of the failures of the banks are related with the quality and efficiency of their management. The problem arises while trying to quantify the management quality in the due course of analyzing and evaluating the performance of the BFIs. Thus, the central bank of Taiwan, has been using CARSEL instead of CAMELS to measure the management ability and sensitivity to market to fullfil the Regulatory Compliance and Stability criteria, respectively.</span><br />
	</span></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp;<img alt="camels" height="389" src="http://newbusinessage.com/ckfinder/userfiles/Images/camelsan.jpg" width="500" /></span></strong></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp;</span></strong></p>
<p class="Pa13" style="margin-top:5.0pt">
	<strong><span style="font-size:12px;"><span style="color: black;">About EAGLES</span></span></strong></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">The EAGLES system is able to measure and compare banks’ performance in a more determinate, objective and consistent manner. The name is derived from the key success factors confronting banks today, i.e. Earning ability, Asset quality, Growth, Liquidity, Equity and Strategy. This approach has been pioneered and has gained credibility among the banking community and fund management industry in Asia, for competition analysis and investment planning, respectively. The authenticity and popularity of EAGLES increased after it was able to predict the Asian financial crisis of the 1980s.</span> <br />
	</span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:12px;"><span style="color: black;">The effective management of a bank strategy is indicated by the Strategic Response Quotient (SRQ). It is an intriguing ratio because it assesses the management’s ability to lend, garner deposits, generate fee-based income and manage the operating cost. An appropriate balance of the three core banking activities will depend on the bank’s strategy. The SRQ is obtained by dividing the interest margin by net operating cost (that is, the total operating cost minus fee income). The higher figure the better combined with excellent risk controls. <br />
	<br />
	<br />
	<img alt="eagles" border="1" height="560" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/camesl.jpg" vspace="10" width="429" /><br />
	</span></span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">EAGLES evaluates banks on the following six parameters:</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">1.<span font-size-adjust:="" font-stretch:="" font-style:="" font-variant:="" font-weight:="" line-height:="" new="" style="font-family: " times="">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span><span style="color: black;">Earning Ability: Earning ability is shown by three noteworthy indicators – Return on Assets (ROA), Return on Shareholders’ Fund (ROSF) and Income/Overheads Ratio (IOR). The importance of IOR is usually not well understood. The main point lies in that income depends on external market forces, while overheads is highly influenced by internal staffing. So, the bank must know how to adjust the staffing according to the market demand for its products and services.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">This is shown by three indicators - ROA, Return on Net worth (RONW) and IOR. Usually, the importance of IOR is that income depends on external market forces, while overheads is highly influenced by internal staffing. So, the bank must know how to adjust the staffing according to the market demand for its products and services.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">2. Asset Quality: Asset quality is best assessed by on-site inspection of the bank’s loan portfolio. If this is not possible, asset quality can be measured by the level of bad debt provisions, that is, bad and doubtful debts (BDD) as a percentage of total loans. A conservative approach will dictate that the quantum of provision to err on the high side is rather low.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">This is best judged by the level of bad debt provisions, that is, bad and doubtful debts as a percentage of total loans. A conservative approach will dictate that the quantum of provision is on the high side is rather low.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">3. Growth: Growth rates of loans and core deposits are the most important indicators of how a bank wants to position itself in the market. A high growth loan book without a corresponding growth in the deposit base signifies an intention to increase interest margins. A higher deposit growth without a corresponding growth in loans means that the bank is suffering from low interest margins. For some banks, lower interest margins could hamper their overall profitability.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">Growth rates of loans and core deposits are the most important indicators of how a bank wants to position itself in the market. A high growth loan book without a corresponding growth in the deposit base signifies an intention to increase interest margins. A higher deposit growth without a corresponding growth in loans means that the bank suffers from low interest margins.<br />
	<br />
	<br />
	<br />
	<img alt="composite" border="1" height="524" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/composite.jpg" vspace="10" width="500" /></span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">4. Liquidity: Liquidity can be described as the ability of a bank to have sufficient funds to meet cash demands for loans, deposit withdrawals and operating expenses. For this reason, a balance should be made between the amount of deposits garnered and the quantum of loans extended. The indicator is the deposit-to-loan ratio or credit-deposit ratio (CD Ratio). It is important for a bank, therefore, to maintain a balance between the amounts of deposits garnered and the quantum of loans extended. Also, investment to deposit ratio is used as an efficient indicator of liquidity.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">5. Equity: Equity level and capital adequacy have a profound impact on the bank. There is an international guideline (Basel II) that stipulates a bank must have a minimum capital equivalent to 8 per cent of the risk adjusted assets. Even the central bank of Nepal, the NRB, has mentioned a comfort zone of 6 and 10 per cent of core capital and total capital funds, respectively, based on the risk-weight assets (percent). Many banks are restricted to open additional branches unless they meet the minimum capital requirements.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">Similarly, sections 31(1) and (2) of BAFIA, 2006 have also categorized the financial institutions into four classes, namely: A, B, C and D based on their minimum capital requirements. And sections 42(1) to 42(5) have clearly explained the provision of capital adequacy for the BFIs in Nepal.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">6. Strategy: The effective management of a bank’s strategy is indicated by the strategic response quotient (SRQ). It assesses the management’s ability to lend, garner deposits, generate fee based income and manage the operating cost. As to what is an appropriate balance of the three core banking activities depends on the bank’s strategy. The SRQ is obtained by dividing the interest margin by net operating cost (that is, total operating cost minus fee income). The higher figure the better combined with excellent risk controls.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">Each of the six parameters is divided into sub-parameters for effective evaluation. The EAGLES rating, unlike CAMELS, is based purely on arithmetical ratios and hence does not involve grades or ratings. Thus, there is no subjectivity involved in EAGLES and banks are judges purely on the ratio outputs and ranked highest to lowest based on these parameters. Each bank is ranked highest to lowest on each of the sub-parameters. The bank with higher ranks on more sub-parameters will be ranked the highest in that particular parameter. Accumulating all the parameters, the bank that gets the highest rank on more parameters stands on the top of the list.</span><br />
	<br />
	<img alt="camsel" border="1" height="560" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/camesl(1).jpg" vspace="10" width="429" /><br />
	</span></p>
<p class="Default">
	<strong><span style="font-size:12px;"><span style="color: black;">About MACRO</span> <br />
	</span></strong></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">MACRO is a rating system formerly used by examiners to evaluate the safety and soundness of savings institutions. MACRO is an acronym for the five elements that were evaluated: Management, Assets quality, Capital adequacy, Risk management and Operating results. Based on the examiner’s evaluation, each element would be rated on a scale of 1 to 5, and the institution would be assigned an overall MACRO rating of 1 to 5. The indications of MACRO rating were:</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">The MACRO Rating System was used by the Federal Thrift Examiners from (exact date) 1984 to August 15, 1994, before it was replaced by the CAMELS Rating System.</span><br />
	<br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:12px;"><b style="mso-bidi-font-weight:normal"><span style="line-height: 115%; color: black;">Vaidya is a Researcher associated with New Business Age (P) Ltd. He can be contacted at rashesh_vaidya@hotmail.com</span></b> <br />
	</span></p>',
			'published' => true,
			'created' => '2013-01-22',
			'modified' => '2013-01-22',
			'keywords' => '',
			'description' => 'A commercial bank’s performance can be measured in terms of its ability to meet the expectations of its owners, employees, depositors and borrowers. A bank’s performance can be evaluated by analysing its financial reports- report of condition and report of income. The bank’s management has to protect the interests of all concerned parties - creditors, owners and others. They have to ensure minimum operating efficiency and keep the bank’s risks at a minimum level. Their survival depends upon their operating performance.',
			'sortorder' => '664',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 7 => array(
		'Article' => array(
			'id' => '768',
			'article_category_id' => '40',
			'title' => 'Cover Story December 2012',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	 </p>
<p>
<!--[if gte mso 9]><xml>
 <w:WordDocument>
  <w:View>Normal</w:View>
  <w:Zoom>0</w:Zoom>
  <w:TrackMoves/>
  <w:TrackFormatting/>
  <w:PunctuationKerning/>
  <w:ValidateAgainstSchemas/>
  <w:SaveIfXMLInvalid>false</w:SaveIfXMLInvalid>
  <w:IgnoreMixedContent>false</w:IgnoreMixedContent>
  <w:AlwaysShowPlaceholderText>false</w:AlwaysShowPlaceholderText>
  <w:DoNotPromoteQF/>
  <w:LidThemeOther>EN-US</w:LidThemeOther>
  <w:LidThemeAsian>X-NONE</w:LidThemeAsian>
  <w:LidThemeComplexScript>X-NONE</w:LidThemeComplexScript>
  <w:Compatibility>
   <w:BreakWrappedTables/>
   <w:SnapToGridInCell/>
   <w:WrapTextWithPunct/>
   <w:UseAsianBreakRules/>
   <w:DontGrowAutofit/>
   <w:SplitPgBreakAndParaMark/>
   <w:DontVertAlignCellWithSp/>
   <w:DontBreakConstrainedForcedTables/>
   <w:DontVertAlignInTxbx/>
   <w:Word11KerningPairs/>
   <w:CachedColBalance/>
  </w:Compatibility>
  <w:BrowserLevel>MicrosoftInternetExplorer4</w:BrowserLevel>
  <m:mathPr>
   <m:mathFont m:val="Cambria Math"/>
   <m:brkBin m:val="before"/>
   <m:brkBinSub m:val="--"/>
   <m:smallFrac m:val="off"/>
   <m:dispDef/>
   <m:lMargin m:val="0"/>
   <m:rMargin m:val="0"/>
   <m:defJc m:val="centerGroup"/>
   <m:wrapIndent m:val="1440"/>
   <m:intLim m:val="subSup"/>
   <m:naryLim m:val="undOvr"/>
  </m:mathPr></w:WordDocument>
</xml><![endif]--></p>
<p>
	<strong><span style="font-size:14px;"><span class="A13">By Gaurav Aryal (With inputs from Rashesh Vaidya, Sushila Budhathoki, Abha Dhital and Bivek Dhakal)</span></span><span style="font-size:14px;"> </span></strong></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;</span></span></strong></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span style="line-height: 115%; color: rgb(22, 144, 186);">Nepali Economy</span></span></strong></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">Before and After Maoist Insurgency</span></span></strong></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;<br />
	<img alt="" border="1" height="240" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/coverstory15.jpg" vspace="10" width="400" /><br />
	</span></span></strong><span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">Five years before the Maoist insurgency started in Nepal in 1996, Nepal’s GDP growth rate was approximately 5.34 percent per annum. The growth rate plunged to 3.36 percent per annum in 2006, the year the underground Maoists came over-ground following the success of the peaceful April Uprising (Jana Andolan II) and the subsequent restoration of the dissolved House of Representatives in April 2006. The economy’s growth rate kept fluctuating over the next five years till 2011.</span></span></p>
<p class="Pa7" style="text-align:justify">
	<span style="font-size:14px;"><span class="A4">N</span><span style="color: rgb(34, 30, 31);">epal is yet to witness a ‘healthy’ growth rate, which has so far fluctuated between 3.3 and 4.5 percent in this millennium, with the exception of 6.10 percent in 2008. Perhaps nobody is happy with the country’s slow growth rate, but the economists are probably the most worried lot. They lament the fact that the country’s economy has continued the downward trend even after the peace deal between the government and the Maoist guerrillas signed on November 21, 2006. A majority of Nepali economists cite the lack of new investments as the major reason for this poor show of the Nepali economy. They blame an ‘unfavourable investment climate’ created by the political uncertainty for the lack of new investments – foreign as well as domestic. However, it is not that every sector slackened over the past one and a half decades. Some sectors have witnessed encouraging growth rates. (it would be better if you could cite some examples)</span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;"><img alt="cover story december 2012" border="1" height="258" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/agriculturalproduction.jpg" vspace="10" width="400" /><br />
	<br />
	<br />
	<br />
	<span style="color: rgb(34, 30, 31);">Despite the political upheavals which include a decade-long armed insurgency, sectors such as telecommunications, education, information technology, road construction, and remittance have registered significant growths over this period. In the education sector, the literacy rate has continued a steady growth. This is mainly because of the rise in private sector investment in education, and the top priority attached to the sector by the government which allocates the largest share of the national budget to education. <br />
	<br />
	</span></span><span style="font-size:14px;"><img alt="cover story december 2012" border="1" height="244" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/totaltourist.jpg" vspace="10" width="400" /></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;"><br />
	<span style="color: rgb(34, 30, 31);">Remittance has become the lifeline of the Nepali economy in recent times. Despite huge trade deficits, the country’s Balance of Payment has remained positive, barring some hiccups. The remittance inflow has fuelled the growth of the banking sector and helped in the reduction of poverty and increase in the people’s living standard, believe the economists and experts.<br />
	<br />
	</span></span><span style="font-size:14px;"><img alt="cover story december 2012" border="1" height="310" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/totalroadlenght.jpg" vspace="10" width="500" /></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;"><br />
	<span style="color: rgb(34, 30, 31);">However, energy and tourism, arguably the two most prospectful sectors in the country, have not grown as expected. The entry of the private sector through Public Private Partnership (PPP) and Power Purchase Agreement with the state-owned Nepal Electricity Authority (NEA) has shown some hopes in the hydropower sector. However, the hope to resolve the power crisis that has only intensified since 2006 is still out of sight. <br />
	<br />
	</span></span><span style="font-size:14px;"><img alt="cover story december 2012" border="1" height="266" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/totalremittance.jpg" vspace="10" width="500" /></span></p>
<p>
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Similarly tourism, another sector widely tipped as the basis for Nepal’s economic development, could not improve as expected over the years. A veteran of Nepal’s tourism sector and Chairman Emeritus of Hotel Soaltee Crowne Plaza, Prabhakar SJB Rana notes that though the tourism industry gained some ground over the past one decade, “there are plenty of areas where we could not do anything at all”. Rana as well as other analysts attribute this failure mainly to Nepal’s inability to promote and advertise itself as an exciting tourist destination in the world’s tourist originating markets. <br />
	<br />
	</span></span><span style="font-size:14px;"><img alt="cover story december 2012" border="1" height="217" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/telephonelandlineexpansion.jpg" vspace="10" width="400" /></span><br />
	<span style="font-size:14px;"> </span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Economists as well as development planners seem to be disappointed with the latest political and economic developments. Deependra Bahadur Kshetry, Vice-chairman of the National Planning Commission, says, “The country is moving backward instead of going forward”. Referring to the difficulties of the current government led by Dr. Baburam Bhattarai in bringing out a full national budget for fiscal year 2012/13, he added, “The kind of hindrance created by the opposition parties in Nepal (in the presentation of the national budget) is seen nowhere in the world.” The size of the budget this year has shrunk compared to that of the previous year. Kshetry blames the ‘non-cooperation’ by the opposition parties for the sluggish growth of the Nepali economy in recent years. <br />
	<br />
	</span></span><span style="font-size:14px;"><img alt="cover story december 2012" border="1" height="279" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/landbought.jpg" vspace="10" width="500" /><br />
	</span></p>
<p>
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Several other analysts echo Kshetry’s concerns and cite the example of the Maoist obstruction to the presentation of the national budget last year by the then government led by CPN-UML leader Jhalanath Khanal. </span></span><span style="font-size:14px;"> </span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span></p>
<p>
	<strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">The Good Old 90s</span></span></strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);"><br />
	<br />
	Mid 1990s was a time when the scenario was much brighter with the economic growth rate hovering around five percent. From 1990, the year democracy was restored to 1995, Nepal’s overall situation improved, according to senior economist Dr Dilli Raj Khanal. But in the years after 1995, the Nepali economy witnessed a slowdown which turned into a negative growth during 2000-2005. Recalling the situation of the 1990s, economist Prof. Dr. Bishwambher Pyakuryal says, “There was devaluation of the Nepali currency, economic imbalance, and unemployment but the economy continued to grow - albeit at a modest rate - even during the insurgency in the late 1990s. The donors were supporting the development projects; ongoing projects were being given continuity. But, the donors cut their financial support to Nepal by 48 percent in the last fiscal year, compared to the previous year.”</span></span><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);"><br />
	<br />
	</span></span><br />
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);"><span style="font-size:14px;"><img alt="cover story december 2012" border="1" height="247" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/goverment.jpg" vspace="10" width="400" /></span> <br />
	Dr. Khanal adds, “Nepal’s economic growth rate, which was already slow, further deteriorated during the period of 2000 - 2005. The Maoist insurgency, which escalated during these years, is to blame to a great extent for today’s flagging economy.” Another economist, Dr Chiranjibi Nepal observes, “Although there was little economic progress from 1996 to 2000, the country was faring well, so to speak. But after 2000, there was a massive decline in economic activities, followed by the closure of several industries and slowdown in the manufacturing sector. The cumulative negative impact of all this on the economy was too heavy.” </span></span><span style="font-size:14px;"> </span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;">&nbsp;</span></strong><span style="font-size:14px;"><img alt="cover story december 2012" border="1" height="240" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/GDP.jpg" vspace="10" width="400" /><br />
	<br />
	<br />
	</span></p>
<p class="Pa13" style="margin-top:5.0pt">
	<strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Sri Lankan Comparison </span></span></strong></p>
<p>
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Economists and development experts often compare the economic situations of Nepal and Sri Lanka, for both countries have gone through violent armed insurgencies in recent history. When Nepal was passing through an armed Maoist conflict, Sri Lanka was going through the LTTE violence. In fact, Sri Lanka’s insurgency-related problems were far bigger than those of Nepal, in terms of both size and scale. For example, the Sri Lankan conflict took the life of its then head of the state and aeroplanes parked at the international airport in the capital were blown off in LTTE attacks. Nothing of that sort happened in Nepal. (The massacre of King Birendra and his family was not a terrorist act.)</span></span><span style="font-size:14px;"><br />
	<br />
	</span><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Dr. Nepal says, “It is amazing that Sri Lanka achieved five percent growth rate even when the armed conflict there was in full swing. What’s more, the island country’s growth rate crossed seven percent after the LTTE violence was brought to an end. In stark contrast, Nepal has continued with its poor show in terms of economic progress even after so many years of the start of the peace process.”</span></span><span style="font-size:14px;">&nbsp;</span><span style="font-size:14px;"> </span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);"><br />
	Former finance minister Dr. Prakash Chandra Lohani explains the reasons. “Political uncertainty and chaos has been at the root of the sorry state of the Nepali economy. It’s unfortunate that the same reasons still prevail and are hindering Nepal’s economic progress,” he says. </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;"><br />
	&nbsp;<span style="color: rgb(34, 30, 31);">The lack of any worth-noting investment in the major sectors of the economy has been another hurdle to Nepal’s economic progress. Neither domestic nor foreign investment worth mentioning has been made since the start of the peace process in the country. According to Dr. Pyakuryal, no significant amount of foreign direct investment (FDI) has come to Nepal over this period because of the feeling of insecurity and lack of confidence in the government. </span></span></p>
<p class="Pa13" style="margin-top:5.0pt">
	<span style="font-size:14px;">&nbsp;<br />
	</span><br />
	<span style="font-size:14px;"><span style="font-size:14px;"><img alt="cover story december 2012" border="1" height="255" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/budget.jpg" vspace="10" width="400" /><br />
	<br />
	</span> <span style="color: rgb(34, 30, 31);">However, all hopes are not lost for Nepal. Analysts still see the possibility of a double digit growth for the Nepali economy, provided that the state can ensure political stability and policy predictability for foreign as well as domestic investors. Some instances in the recent past support this optimism. For example, a number of foreign investors flocked Nepal – some of them wanted to explore investment opportunities while others came with concrete proposals in their hands – immediately after the government and the Maoist guerrillas signed the comprehensive peace accord on November 21, 2006. Similarly, many foreign investors applied and got the permission to conduct detailed surveys for developing a number of hydropower projects of different capacities. But many of these investors haven’t been able to go ahead with their projects, thanks to the hurdles posed by different vested interest groups. Successive governments over the years have not been able to deal effectively with these ‘project spoilers’, perhaps because of the uncertainty looming large over their own future.</span></span></p>
<p class="Pa13" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">&nbsp; <br />
	</span></span></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">&nbsp;</span><span style="color: rgb(34, 30, 31);">Human Development Index</span> </span></strong><br />
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Nepal’s Human Development Index (HDI) value for 2011 is 0.458 and the country is positioned 157th out of 187 countries included in the Index. According to a report of UNDP, between 1990 and 2011, Nepal’s HDI value increased from 0.340 in 1990 to 0.509 in 2006 and 0.458 in 2011.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">The analysts say remittance has a lot to do with poverty reduction and consequent improvement in HDI over the years. According to the Human Development Report 2011, life expectancy at birth in 1995 was 57.5 years and it increased to 65.6 in 2005 and to 68.8 in 2011. Improved health condition due to availability of health services and improved awareness are considered as contributing factors for increased life expectancy.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span><span style="font-size:14px;"><img alt="cover story december 2012" border="1" height="320" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/electricity.jpg" vspace="10" width="500" /></span></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Remittance&nbsp;&nbsp;&nbsp; </span></span></strong><span style="font-size:14px;"><br />
	</span></p>
<p>
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">The role of remittance in Nepali economy is increasing continuously. When most of the sector of the economy are showing downward trend, remittance inflow has constantly increased. This on the other hand has kept the Nepali economy going, say analysts. Remittance inflow that was Rs 239.388 billion in the fiscal year 1995/96 made a steep rise to Rs 413.428 billion in 2000/01 and to Rs 430.396 billion in 2001/02. Though the following five years till 2004/05 saw a near stagnation in remittance inflow, it registered a sharp rise to Rs 1246.423 billion in 2010/11. The trend shows that it is likely to keep on growing in the years to come too.</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">The remittance inflow in 1995/96 was equivalent to 1.79 percent of the GDP. That ratio shot up to 10.97 percent in 2001/02 and 18.69 per cent in 2010/11, according to the statistics provided by Nepal Rastra Bank.&nbsp;&nbsp; <br />
	<br />
	Remittance is credited to be one of the most important contributor to reduction of poverty incidence which, according to the Nepal Living Standards Survey III (NLSS-III), published in 2011, stands at 25.2 per cent, down from 31 percent a decade earlier.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Number of Nepali youth going abroad for employment increased during the insurgency and in the following years. Upon publication of the NLSS-II which showed poverty reduced to 31 percent from 42 percent shown in the NLSS-I in 1996, analysts had expressed fear that the poverty incidence may shoot back to 42 percent or above if the peace process started by then encouraged the migrant workers to go back to the village and discouraged further migration out of the village. But it seems that the outflow of the people from the villages is not likely to be reversed in the foreseeable future.</span><br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;<br />
	</span><span style="font-size:14px;"><img alt="cover story december 2012" border="1" height="162" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/human.jpg" vspace="10" width="500" /><br />
	</span></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Trade&nbsp;&nbsp; </span></span></strong><br />
	<br />
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Nepal’s international trade has continuously been in deficit in the absence of low industrial base. Measures for trade promotion have not brought significant improvement. Trade analysts say that easy availability of cheap Chinese goods has displaced many industries though it has helped in improving the lifestyle of the people. Nepal’s readymade garments industry (one of the major export industries) lost its American and European market due to the combination of two reasons that struck it simultaneously. One, the quota facility it enjoyed in these markets till late 1990s was lost with the phase out of the multi-fibre agreement in international trade. Second, the severe labour unrest instigated by the Maoists during the insurgency as well as after they came overground following the success of Jana Andolan II, disrupted the supply chain that forced the buyers to search other sources of supply.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">According to data from Trade and Export Promotion Centre (TEPC) and NRB, between fiscal years 1995/96 and 2011/12, it was only in 1999/2000 and 2000/01, the trade was measured surplus. The surplus in 1999/2000 and 2000/01 was by Rs 18.43 billion with India and Rs 40.24 billion with other countries and by Rs 19.18 billion with India and Rs 40.85 billion with other countries respectively.</span> <br />
	</span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Nepal’s international trade has been concentrating more and more in India in the recent years. While the share of countries other than India in Nepal’s total international trade was higher than with India till fiscal year 2001/02, then after India’s share started to be higher than that of other countries. </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span><br />
	<strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Government Budget&nbsp;&nbsp; </span></span></strong><span style="font-size:14px;"><br />
	</span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Capital expenditure in the government budget during the insurgency (from 1995/96 till 1998/99) was low and almost stable. But it was higher than the recurrent expenditure. However, in years after 1999/2000, recurrent expenditure has zoomed up while capital expenditure remained almost stagnant until the fiscal year 2005/06. One of the reasons behind such scenario was concentrated priorities of the government to calm the heightening conflict. For that purpose, expenditure was diverted to investment in security purpose; as a result, development projects were affected. It was also complained that the environment was not favourable for successful completion of the projects by the project executors during the conflict era. In the last six years recurrent expenditure has been growing substantially, reads the data provided by the Office of the Comptroller General.</span></span></p>
<p>
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Analysing this, Prof. Dr. Bishwambher Pyakuryal says, after the peace process started, many projects were either postponed or discontinued because of lack of trust in the government by donors. For example, last year the donors decreased their financial support by 48 per cent. Deficit budget is financed through foreign loan and internal loan. The amount of foreign borrowings in 2000/2001 (Rs 12.044 billion) was almost equal to the borrowings in 2010/11 (Rs 12.075 billion) while it decreased to Rs 4.546 billion in 2002/03. Similarly, the internal borrowing reached a record high in 2010/11 with Rs 42.515 billion. In the fiscal year 2009/10 it was Rs 29.914 billion and in 2006/07 it was Rs 17.892 million.</span></span><span style="font-size:14px;"><br />
	<br />
	&nbsp;</span><span style="font-size:14px;"> </span></p>
<p class="Pa13" style="margin-top:5.0pt">
	<strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Roads </span></span></strong></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);"><br />
	One of the areas where Nepal registered a good growth was in the expansion of roads network. The total length of roads has doubled over the fifteen years period between 1996 and 2012. The growth had slowed down when the conflict was at its worst. However, the growth never really ceased. Many remote parts of Nepal have been connected by road over these years. The growth is particularly in the length of fair weather roads. One reason for this increasing trend is initiative taken by local people. Growth is seen also in the length of gravelled roads that have helped in improving accessibility. In the recent years it can be noticed that the length of black-topped roads has outpaced other kinds of roads.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Electricity </span></span></strong><span style="font-size:14px;"><br />
	<br />
	<span style="color: rgb(34, 30, 31);">Electricity shortage has hamstrung industrial growth and made city life miserable. And the history reveals very interesting facts. In 1990, the installed capacity of hydropower generation in the country was 0.73 million MW which increased to 0.86 million MW in 1995/96 which gives an addition of 0.15 million MW within six years. This increased to 1.76 million MW in 2005/2006 – an increase of 0.9 million MW in ten years. Now in 2012 it stands at 2.36 million MW.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa13" style="margin-top:5.0pt">
	<strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Telecommunication </span></span></strong></p>
<p>
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">There has been a good increase in the telephone coverage across the country over the last 15 years. And this expansion is speedier in cellular mobile phones. According to the census 2011, 7.37 per cent of Nepali population uses landline telephone though this is heavily concentrated in urban areas where 22.66 per cent population uses it. In rural areas only 3.77 per cent of the population there has landline telephone. Similarly 64.63 per cent of total population of Nepal uses cellular mobile phone. This ratio is 84.07 per cent in urban areas and 59.98 per cent in rural areas. According to the census 2011 report published in November 2012.</span></span><br />
	 </p>
<p class="Pa13" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">The telephone sector suffered a lot during the insurgency. For example, many telephone towers were blown up by Maoist insurgents. However, this sector gained the most after the peace process started.</span></span></p>
<p class="Pa13" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">&nbsp;</span></span></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">&nbsp;</span><span style="color: rgb(34, 30, 31);">Agriculture&nbsp; </span></span></strong><span style="font-size:14px;"><br />
	</span></p>
<p>
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">The Agriculture sector saw stagnant trend during the period between 1995/96- 2011/12. The cash crops sub-sector did better – the production of cash crops doubled during the period. Within the cash crop subsector, the major crops that recorded substantial growth were tea, coffee and cardamom. </span></span><span style="font-size:14px;"> </span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">According to Sheela Thapa, Deputy Director at AEC (Agro Enterprise Center), consistent growth in the agricultural production was mainly because of the good weather and high rate of seed replacement. She says, “We don’t have pest problems. Farmers are increasingly using hybrid seeds as well as improved seeds which have positive impact in the production figures.” </span></span></p>
<p>
	<span style="font-size:14px;"><br />
	<span style="color: rgb(34, 30, 31);">Within this period, the year 2008 was the best in terms of weather and the availability of fertilizers while the drought and flood in 2006/ 07 resulted in a slump in agricultural production. </span></span><span style="font-size:14px;"> </span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Durga Prasad Upreti, Senior Economist at Agricultural Commodity Export Promotion Program says though there were no direct effects of armed conflict or the subsequent peace process in agricultural production, the country has lagged behind six to seven years in terms of agricultural sector development due to the conflict. He attributes the subsistence farming system for no effect of the conflict or the subsequent peace process in agriculture. According to him, had there been commercial farming with large scale farms producing the goods for the market, Nepal’s agricultural sector would have certainly suffered huge losses due to that conflict. </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span><strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Irrigation&nbsp;&nbsp; </span></span></strong><span style="font-size:14px;"><br />
	</span></p>
<p>
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">There were noticeable changes in the irrigation sector with the start of Maoist civil war in 1995/96. The hilly region saw massive decline in the growth of additional land irrigated. About 10,600 hectares of additional land were brought under irrigation in 1995/96, but it was only 1,620 hectares in 2006/07 and only 1,345 hectares in the first nine months of the fiscal year 2011/12. In Terai region, 36,084 hectares additional land was brought under irrigation in 1995/96. It was 16,782 hectares in 2005/06 and 16,101 hectares in the first nine months of the fiscal year 2011/12. </span></span><span style="font-size:14px;"> </span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Similarly, the method of irrigation has also been varied since 1995/96 with the increase in the use of ground water system. The canal water irrigation system was the main source of irrigation, irrigating 33,898 additional land in 1995/96, 5,460 hectare in 2006/07 and 12,935 hectares in the first nine months of the fiscal year 2011/ 12. On the other hand, the ground water irrigation system was 12,231 hectares in 1995/96, 21,024 hectares in 2006/07 and 4,512 hectares in the first nine months of the fiscal year 2011/12 respectively. According to the Economy Survey 2011/12, about 67 per cent of the total agricultural land is covered by irrigation.</span> <br />
	</span></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;">&nbsp;</span></strong></p>
<p class="Pa13" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Manufacturing</span></span></p>
<p>
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Manufacturing sector was the greatest sufferer due to the conflict and it is still the same. The problem started to be more pronounced from the year 2003/04 since when there was massive decline is recorded in the production of manufactured goods. </span></span><span style="font-size:14px;"> </span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span></p>
<p>
	<strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Education&nbsp;&nbsp;</span></span></strong></p>
<p class="MsoNormal">
	<br />
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Education sector too was badly affected by the conflict that forced many schools to close down, particularly in remote rural areas, and the students there were forced to join the Maoist army. However, that triggered the private sector to open new schools and colleges (mainly plus two colleges) in the cities, particularly in the capital. The conflict also encouraged the students to go abroad for studies. Now, colleges in Nepal have started getting affiliation with foreign universities and offering their courses here.</span> <br />
	</span></p>
<p>
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">According to the latest National Census 2011, the country’s literacy rate stood 65.9 percent, up from the 54.1 percent in 2001. However, this trend indicates that that it will take over three decades for Nepal to achieve the Millennium Development Goal (MDG) of 100 percent literacy, whereas that goal is actually set for 2015. </span></span><span style="font-size:14px;"> </span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa13" style="margin-top:5.0pt">
	<strong><span style="font-size:14px;"><span class="A0">National Census-2011 </span></span></strong></p>
<p class="Pa18">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Overall literacy rate (age-5 and above) =65.9% </span></span></p>
<p class="Pa18">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Male literacy=75.1% </span></span></p>
<p class="Pa18">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Female literacy=57.4% </span></span></p>
<p class="Pa18">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Highest Literacy Rate (Kathmandu=86.3%) </span></span></p>
<p class="Pa18">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Lowest Literacy Rate (Rautahat=41.7%) </span></span></p>
<p class="Pa18">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Education Above SLC=10.2% (Total Pop.) </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Tourism</span> </span></strong></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Tourism industry was not affected in the initial years of the armed conflict. So, till the end of the millennium, Nepal got good number of foreign tourists. One reason for that was the Visit Nepal Year campaign of 1998. According to the given data, it was after the millennium the tourism sector in Nepal witness a negative growth for few years. The government declared the year 2011 as ‘Nepal Tourism Year’ expecting similar effects as those of Visit Nepal Year -1998, but it was largely a failed exercise. The tourist arrival in that year was 736,215, much less than the expected one million, though nearly double the number of 1996 or 2006.</span><br />
	<br />
	</span></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Civil Aviation&nbsp; </span></span></strong><span style="font-size:14px;"><br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Decade-long conflict adversely affected civil aviation industry as well. Many Air traffic control towers were destroyed in the conflict. For example, the ‘West Locator Tower-Dharke’ was completely destroyed and it is still in the dilapidated state.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Another effect of the conflict was in the international flight movement to and from Kathmandu. Driven out of their villages, Nepali youth started going abroad for work and that increased the demand for international flights. Consequently foreign airlines started increasing their flights to Kathmandu. However, Nepal’s flag carrier Nepal Airline Corporation could not benefit from this as it suffered from lack of aircraft. Consequently, Nepal could not derive as much benefit as could have from this boom in international air traffic.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa13" style="margin-top:5.0pt">
	<strong><span style="font-size:14px;"><span class="A0">Air operator’s certificate </span></span></strong></p>
<p class="Pa18">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Total AOC issued – 69 </span></span></p>
<p class="Pa18">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Valid AOC – 39 </span></span></p>
<p class="Pa18">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Invalid and Cancelled –30 </span></span></p>
<p class="Pa18">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Airline in Operation –34 </span></span></p>
<p class="Pa18">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">AOC Valid but Not in Operation – 5 </span></span></p>
<p class="Pa18">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Helicopter Operator with Valid AOC –8 </span></span></p>
<p class="Pa18">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Fixed Wing Operator with Valid AOC –14 </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">Aviation Sports with Valid AOC –17</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;</span></span></p>
<p class="MsoNormal">
	<span style="font-size:16px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;</span></span></p>
<p class="MsoNormal">
	<span style="font-size:16px;"><strong><span color:="" myriad="" style="line-height: 115%; font-family: ">‘We must strengthen our democracy’</span></strong></span></p>
<p class="MsoNormal">
	 </p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span color:="" myriad="" style="line-height: 115%; font-family: ">&nbsp;<img alt="cover story december 2012" border="1" height="227" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/PRABHAKAR-SJB-RANA.jpg" vspace="10" width="200" /></span></span></p>
<p class="Pa0">
	<span style="font-size:14px;"><span class="A0">PRABHAKAR SJB RANA </span></span></p>
<p class="Pa0">
	<span style="font-size:14px;"><span class="A0">Chairman Emeritus </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A0"><span style="line-height: 115%; font-family: ">Soaltee Hotel Ltd, Crowne Plaza Kathmandu</span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A0"><span style="line-height: 115%; font-family: ">&nbsp; <br />
	</span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Sri Lanka, too, suffered from an armed insurgency which was more intense and persisted for a longer period than the Maoist conflict in Nepal. But Sri Lanka has been doing well in recent times, following the end of the violence there. In comparison, Nepal is not doing that well though the decade-long conflict was said have ended six years ago. In my view, our socio-economic condition is going downward at present. To become a prosperous nation with robust economy, we must groom and strengthen our democracy.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">As a matter of fact, the economy and social factors are inseparable and proportional to each other. At present, the inflation is on the rise and the main factor behind the gloomy picture is the decreasing exports. The political instability has held the nation a hostage. On the one hand, there is a positive progress in the tourism sector, while on the other, we haven’t made much difference. According to the October statistics, the international tourism market has witnessed a fall. So, we must acknowledge the fact that it’s high time that we became self-dependent and started thinking how to raise our market at the global level. <br />
	</span></span></p>
<p class="MsoNormal">
	<strong><span style="font-size:16px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;</span></span></strong></p>
<p class="MsoNormal">
	<strong><span style="font-size:16px;"><span color:="" myriad="" style="line-height: 115%; font-family: ">‘Peace process did not bring optimism for investment’</span></span></strong></p>
<p class="MsoNormal">
	 </p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span color:="" myriad="" style="line-height: 115%; font-family: ">&nbsp;<img alt="cover story december 2012" border="1" height="205" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/DR-PRAKASH-CHANDRA-LOHANI.jpg" vspace="10" width="200" /></span></span></p>
<p class="Pa0">
	<span style="font-size:14px;"><span class="A0">DR PRAKASH CHANDRA LOHANI </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A0"><span style="line-height: 115%; font-family: ">Economist</span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A0"><span style="line-height: 115%; font-family: ">&nbsp;</span></span></span></p>
<p class="MsoNormal">
	The average growth rate of the Nepali economy was around five percent during the 1990-2000 decade, despite the beginning of the decade-long Maoist civil war in 1996. However, after the peace process, there was a slowdown in the economy, mainly because of the lack of new investments. One reason for this might be there were an increasing number of improper investments, misuse of money and leakage in investments.</p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Post the peace process, the government had no plan for investment and it could not guarantee the investors for business in Nepal. There were ongoing big budget programmes but with no productivity. A lot of money was wasted in unproductive sectors which led to the failure of Nepali economy to achieve even the minimum growth.</span> <br />
	</span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">The peace process, unlike the people’s expectations, did not bring optimism and as a result, the economy could not prosper in the post-conflict period. Uncertainty and political unrest were the major reasons behind this. </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">Now, the country has no regular income source because of high rate of unemployment. Young people are wandering all over the world like never before - only to earn. Unless they are employed, the country cannot generate income. If we want to reform our economy we need to minimize the political risks. Drafting the new constitution and creating conducive environment for investors will surely bring positive changes in the Nepali economy.</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;</span></span></p>
<p class="MsoNormal">
	<strong><span style="font-size:16px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;</span><span color:="" myriad="" style="line-height: 115%; font-family: ">‘Intra- party consensus on economic issues’</span></span></strong></p>
<p class="MsoNormal">
	 </p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span color:="" myriad="" style="line-height: 115%; font-family: ">&nbsp;<img alt="cover story december 2012" border="1" height="225" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/PROF-DR-BISHWAMBHER-PYAKURYAL.jpg" vspace="10" width="200" /></span></span></p>
<p class="Pa0">
	<span style="font-size:14px;"><span class="A0">PROF DR BISHWAMBHER PYAKURYAL </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A0"><span style="line-height: 115%; font-family: ">Economist</span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A0"><span style="line-height: 115%; font-family: ">&nbsp; <br />
	</span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Historically there seems to have been positive relation between economic development and political stability in Nepal. However, it is difficult to find the exact relation in the current scenario. It is mainly because Nepal could not prosper after the peace process when compared to the time of conflict. For example, Iraq, a country in Western Asia is achieving a double digit growth despite such a shaking unrest. We don’t find a relation between political instability and economic growth there.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Nepal’s growth rate was four percent during the years 1997- 2003 and three percent during 2003- 2008. Before the Maoist war, the average growth rate was four percent, but it decreased by one percent after the peace process. During the insurgency, there was an increase in unemployment, devaluation of the Nepali currency, economic imbalance etc but the economic growth was not that uncertain and many development projects were going on. However, after the peace process, many projects were either postponed or discontinued because of the lack of trust in the government. Last year only, donors decreased their assistance by 48 per cent.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Political stability is supposedly the backbone of economic stability. Therefore, politicians should understand that politicization of economic agendas is never fruitful. With the erosion of political credibility, the trend of Nepalis investing outside the country has been on the rise. The government has fallen short of motivating and inspiring the private sector. Even more alarming, perhaps, is the ever rising exodus of the productive population – the age group of 16 to 29 – for foreign employment. Remittance, a not-so-dependable source in today’s global politico-economy, has kept the Nepali economy afloat so far.</span> <br />
	</span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">The common people do not care which party or person is in power; all that they care about, perhaps, is how the inattention to the country’s economic agendas is affecting their lives. Now the economic situation is unpredictable. If this situation continues, the possibilities of less production, labour migration, capital flight, uncertainty, insecurity for investors will rise for sure. Economic issues should not become the victim of anybody’s vested political interest. We can have a continuous growth in the economy if the political leaders are ready for it. </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">There should be an inter-party consensus on high priority sectors such as health and education. This has become very urgent and it’s high time that the politicians felt this urgency. There should be consensus at the policy level for the implementation of the economic agendas. This is the only way to regain the people’s support and trust which is very vital for sustaining the political change and preventing economy flight. Our policies and legal framework, too, should be predictable. I wonder why our politicians couldn’t learn to agree on the common economic agendas. However, I am optimistic that they will, someday.<br />
	</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;</span></span></p>
<p class="MsoNormal">
	<span style="font-size:16px;"><strong><span color:="" myriad="" style="line-height: 115%; font-family: ">‘Stable government is a must for development’</span></strong></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span color:="" myriad="" style="line-height: 115%; font-family: ">&nbsp;<br />
	<img alt="cover story december 2012" border="1" height="257" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/DR-CHIRANJIBI-NEPAL.jpg" vspace="10" width="200" /><br />
	</span></span></p>
<p class="Pa0">
	<span style="font-size:14px;"><span class="A0">DR CHIRANJIBI NEPAL </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A0"><span style="line-height: 115%; font-family: ">Economist</span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A0"><span style="line-height: 115%; font-family: ">&nbsp;</span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Economic activities in Nepal were highly affected during the years 1996- 2000, leading to a low economic growth. The economy’s downward spiral started in 1996, and after the year 2001, the changes became noticeable with the growth turning negative. It was when Nepal started being compared with conflict-hit countries such as Burundi and North Korea.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">The worst-hit sectors were industry and manufacturing, declining from 16 per cent in 2001 to six per cent in 2006. This massive decline in economic activities and closure of the industries hit the economy hard. The resulting negative growth introduced foreign employment as a major business. Weak export and nil employment were the main features of the economy back then. The trend of foreign employment peaked while export saw a massive decline from 2000 to 2006. The contribution of remittance to the GDP was higher than that of total export. After 2006, the situation was expected to improve. But it did not, with the economic growth rate hovering around barely above six per cent. The growth rate saw a downward trend again in the years 2008-2012, with an average of three per cent.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Nepal is losing its international credibility, thanks to the current political mismanagement. A clear indicator for this is the decline in the annual foreign direct investment (FDI) inflow which has decreased from Rs 9 billion nine years back to around Rs 7 billion at present. For survival, the country depends as much on remittance as the Netherlands once relied on its oil resource. If the remittance inflow follows a downward trend, what will be the future of Nepal?</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Remittance is simply undependable as a means to sustain the economy in the long run. Also, its inflow which depends on a number of external factors is unpredictable. It is a kind of slow poison which ultimately kills a nation in the course of time. The government has no strategies to generate employment in the country. When there is no productivity, how can we have growth? This is why our international trade comprises of 85 per cent import and a mere 15 per cent export. There is no fixed time for presenting the country’s annual budget, which has been delayed over and again. Meanwhile, the budget deficit has reached Rs 3. 87billion.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">It seems amazing that Sri- Lanka, which was growing at about five percent during the LTTE conflict, has been able to achieve a growth rate of more than seven per cent post the conflict. But Nepal, on the other hand, has failed to achieve any impressive growth rate even after the peace deal. I don’t understand why Nepal hasn’t witnessed a healthy economic growth though the decade-long armed insurgency here ended six years ago. Our major problem, perhaps, has been unstable government. Moreover, economic growth also depends on policy consistency and stability; Nepal lacks long-term government policies.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">Nepal has huge prospects in many sectors, including hydropower and tourism, which await their effective exploitation. For the past few years, Nepal’s average annual hydropower generation capacity has been only six mega-watts. At this rate, it will take us a century to produce 600 MW of hydropower. Our total hydropower potential is up to 63,000 MW. I am confident that we can bring about impressive changes over the next five years – there is no need to wait for another 25 years as suggested by some politicians - if we have a government stability and policy consistency. <br />
	</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);"><br />
	</span></span></p>
<p class="MsoNormal">
	<strong><span style="font-size:16px;"><span color:="" myriad="" style="line-height: 115%; font-family: ">‘We lack clear economic policies’</span></span></strong></p>
<p class="MsoNormal">
	<img alt="cover story december 2012" border="1" height="222" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/DR-DILLIRAJ-KHANAL.jpg" vspace="10" width="200" /></p>
<p class="Pa0">
	<span style="font-size:14px;"><span class="A0">DR DILLIRAJ KHANAL </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A0"><span style="line-height: 115%; font-family: ">Economist</span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A0"><span style="line-height: 115%; font-family: ">&nbsp;</span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Compared to other Asian countries, Nepal always has had a slow growth rate. Nepal’s economy started slowing down further after 1995; the effects of this were quite visible during the years 2000-2005. The armed Maoist insurgency certainly had some impact on the Nepali economy, but it was only a marginal impact.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Unlike in many African nations which have been through conflicts, the negative impacts of the Maoist insurgency on Nepal’s economy became more perceptible after the beginning of the peace process. Nepal hasn’t seen the kind of economic growth which normally follows the establishment of peace after a long period of conflict in any country. This is mainly because we could not give priority to our economic issues.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">The fact that the political parties in Nepal cannot agree on even presenting the country’s full national budget on time speaks volumes about our current problems. The country could not get its annual budget on time, except for one fiscal year, after the start of the peace process in 2006. It is unfortunate that the politicians have failed to focus on the country’s economic agendas over this period. Their concern for the worsening economy is limited to slogans and speeches only. In reality, their only concern is how to get the reins of power. Power is what they have been fighting for all these years, after the signing of the peace deal.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">We don’t have the pre-requisite for development, either. For example, we lack the infrastructures that are a must for a big-budget project to run smoothly. We haven’t been able to encourage local as well as foreign investors to invest in the country. High transaction costs, power shortage and water scarcity have made it further difficult to sustain the industry. In addition, the investors find the overall environment in the country not conducive for investment.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">There is uncertainty in the global environment and the political instability in Nepal has made achieving economic prosperity further difficult. My research on finding the sources of economic growth also suggests the need to have proper economy and to make good policies to implement them. If we do it, we can have high growth rate in coming 10 years- and we don’t need to wait for 2030. Nepal can benefit from the development of global economic hubs like China and India as well. We could increase our income by five times what we earn today. We can have better economy than the newly emerged economies like Malaysia, UAE and other Gulf countries.</span> <br />
	</span></p>',
			'published' => true,
			'created' => '2013-01-04',
			'modified' => '2013-02-07',
			'keywords' => '',
			'description' => 'Five years before the Maoist insurgency started in Nepal in 1996, Nepal’s GDP growth rate was approximately 5.34 percent per annum. The growth rate plunged to 3.36 percent per annum in 2006, the year the underground Maoists came over-ground following the success of the peaceful April Uprising (Jana Andolan II) and the subsequent restoration of the dissolved House of Representatives in April 2006. The economy’s growth rate kept fluctuating over the next five years till 2011.',
			'sortorder' => '658',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 8 => array(
		'Article' => array(
			'id' => '739',
			'article_category_id' => '40',
			'title' => 'Cover Story November 2012',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	COVER STORY</div>
<div>
	<span>By Pinaki Roy (with inputs from Sushila Budhathoki, Bivek Dhakal and Abha Dhital)<br />
	<br />
	<br />
	<img alt="coverstory" border="1" height="362" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/coverstory(3).jpg" vspace="10" width="400" /><br />
	</span></div>
<div>
	 </div>
<div>
	Corporate Buildings</div>
<div>
	<span>Customised Business Premises as Corporate Fad</span></div>
<div>
	 </div>
<div>
	<b>Corporate houses in Nepal are attracted towards having their own buildings with a vision to make business operations easier and less time consuming among a host of other reasons. The trend of getting customized buildings constructed has caught up fast with the corporate entities in the last one-and-a-half decade or so, observe analysts.</b></div>
<div>
	 </div>
<div>
	<span>G</span>etting a building constructed for business purposes is becoming a onetime and long-term investment for the corporate groups in the country. Om Rajbhandary, the Chairman of Brihat Investments Pvt Ltd credits the banking sector for starting the trend. He says, “The banks were among the first ones to have their own buildings constructed while the other sectors followed suit in the last 15 years or so.”</div>
<div>
	 </div>
<div>
	 </div>
<div>
	Operating from rented offices is becoming a thing of the past. By having their own buildings, corporate big-wigs are focusing more on creating an impression on their business associates and the clientele at large. People usually perceive a corporate house to be of a certain standard if it owns a building. Kumar Lamsal, the CEO of Sanima Bank believes, “It directly relates to the image of a company that can neither be built nor destroyed in a day.” He explains that though one has to spend a huge amount in constructing own building, “The benefits are for many years to come and the cost will be ultimately compensated in the long run.”</div>
<div>
	 </div>
<div>
	 </div>
<div>
	From a global perspective too, the need of the hour for businesses is to opt for high rise buildings. It is more so in the case of Nepal where there is little land to spare in urban areas, especially in Kathmandu, where most corporate houses operate from. The multi-storied corporate buildings serve as easy means to minimize uncontrolled urbanization as well as the completion cost of the buildings. “I believe that the corporate big-wigs building skyscrapers for their organizations is a positive initiation given the rapid flow of unmanaged urbanization in Kathmandu,” says Bishnu Panthee, the Vice President of the Society of Nepalese Architects (SONA). He adds that there aren’t any viable options other than building high rises in the capital as the city needs to adapt to the latest trend and move ahead with the times.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	The charm of working when you are using your own resources makes the working environment more conducive and also boosts the workers’ moral spirit. Working environment plays a vital role in productivity and a good infrastructure certainly leaves a good impression on the minds of the internal as well as external customers. A well furnished and equipped office space helps to maintain reputation and image of the companies. Round the clock CCTV and security system, high speed elevators, fire fighting system, emergency exits, telephone facilities on demand, adequate parking space, power back-up system, earthquake resistant structures and external finishing are features and facilities that the corporate buildings provide.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	There is a deep-rooted concept in the psyche of a regular Nepali that people who have their own houses are stable. “Having own building for corporate and business purpose feels no different and hence, can’t be termed as an exception,” asserts Rajbhandary. He adds, “It is high time indeed for the corporate houses to move on with their own resources.” Lamsal agrees and cites the convenience of conducting business operations from own premises as an overriding reason for the decision to have ‘Alakapuri’, Sanima Bank’s corporate headquarters. He adds, “For a bank, owning a building means a lot and having it has always been one of our priorities. We needed the building to run our business in the most efficient manner possible.”</div>
<div>
	 </div>
<div>
	The trend for owning customized buildings has emerged as a requirement for the Nepali corporate houses. To have your own building makes you feel like you have everything in your business, say experts. “You are comfortable in that building because it’s made as per your requirements and hence, it has become common for corporate houses these days to treat this factor on a prioritized basis.” The sense of pride and ownership in having one’s own office premises is a temptation that most corporate companies are finding hard to resist and one that promises to grow stronger as time passes.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	 </div>
<div>
	 </div>
<div>
	<span>Sanima Bank<br />
	<br />
	<img alt="sanima bank" border="1" height="346" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/sanimabank(1).jpg" vspace="10" width="400" /><br />
	<br />
	</span></div>
<div>
	Commonly known as Sanima Bank building, the ‘Alakapuri’ building is situated in Naxal. Designed by Architect Dr Prakash Bir Singh Tuladhar of New Progressive Designers, it has a contemporary design with structural glazing facade. While Vastu has been adhered to, it also has a fountain and basement parking. This six storied building with a total area of approximately 47,000 sq ft can accommodate up to 300 work station at one time. It also has elevator and automatic sensor doors in each floor. Approximately, Rs 350 million was invested in the building which took three years to complete and came into operation in January this year.</div>
<div>
	 </div>
<div>
	<br />
	 </div>
<div>
	<span>Butwal Power Company<br />
	<br />
	<img alt="butwal power company" border="1" height="149" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/butwal-power-company(1).jpg" vspace="10" width="171" /><br />
	<br />
	</span></div>
<div>
	Butwal Power Company (BPC), located in Buddhanagar, is designed by Innovative Createers Pvt Ltd. This nine storied building with a basement and gross area of 50,000 sq ft can accommodate up to 300 employees. While the building is mostly based on Vastu, it also portrays the Green Building concept with an objective of being LEED (Leadership in Energy and Environment Design) certified project to be issued by USGBC (US Green Building Council). The BPC building has Earth Air Tunnel with solar system for continuous hot/cold air, Wind Turbine (3KW capacity) with battery hybrid system, Anaerobic Sewage Filter System, double glazed window system for energy optimization, deep boring for water supply, and LED lights. Its underground parking system can accommodate up to 50 vehicles at a time. It has two elevators and a terrace garden of approximately 15000 sq ft in area. With open office arrangement, the building also has a pantry in each floor. Approximately, Rs 300 million was invested in the building which took three years to complete and came into operation in August this year.</div>
<div>
	<br />
	<br />
	 </div>
<div>
	<span>Bhat Bhateni Super Market<br />
	<br />
	<img alt="bhat bhateni" border="1" height="290" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/bhatbhatenisupermarket(1).jpg" vspace="10" width="338" /><br />
	<br />
	</span></div>
<div>
	The corporate building of Bhat Bhateni Super Market is situated in Tangal. With a total area of 85,000 sq ft, the building has five floors. This Seismic Resistant Structure designed by Tanka Bahadur Shrestha is also based on Vastu. The building that has a massive accommodation capacity was constructed in several phases. It has five escalators and a 13 person capacity elevator. The parking area for customers has room for 75 cars and 400 motorcycles. The building also has a 24 hours generator backup system.<br />
	<br />
	 </div>
<div>
	 </div>
<div>
	<span>Prabhu Finance Company<br />
	<br />
	<img alt="prabhu" border="1" height="340" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/prabhufinancelimited(1).jpg" vspace="10" width="400" /><br />
	<br />
	</span></div>
<div>
	The corporate building of Prabhu Finance Company Limited located in Lainchaur is designed by Dr Prakash Bir Singh Tuladhar. This contemporary building has six floors and an area of 26,300 sq ft. This building can accommodate up to 250 people at a time. A total of Rs 100 million was invested in the construction of the building that took 18 months to complete. The building has pantry, elevator and a basement parking area.<br />
	<br />
	 </div>
<div>
	 </div>
<div>
	<span>Shikhar Biz Centre<br />
	<br />
	<img alt="shirkhar" border="1" height="335" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/shikarfinancelimited(1).jpg" vspace="10" width="391" /><br />
	<br />
	</span></div>
<div>
	Shikhar Biz Centre situated in the heart of Thapathali boasts of seven floors. Designed by Vastukala Paramarsha, the building is vastu friendly. The design of Shikhar Biz Centre has a contemporary look and the owner Shikhar Insurance operates from the fifth, sixth and seventh floors. With an investment of about Rs 200 million, the building took four years to complete construction. The building has an area of 5500 sq ft and includes a small lawn and underground parking. The building has two elevators, a staircase and an emergency staircase.</div>
<div>
	<br />
	<br />
	 </div>
<div>
	<span>Rastriya Banijya Bank<br />
	<br />
	<img alt="rastriya banijya bank" border="1" height="411" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/rastriyabanijyabank(1).jpg" vspace="10" width="485" /><br />
	<br />
	</span></div>
<div>
	The design and supervision of Rastriya Banijya Bank (RBB) was done by Rachana Consulting Architects and Engineers Pvt Ltd. RBB, government owned and the largest commercial bank in Nepal, was established in 1966. According to an RBB source, a French lady was the architect of the building. Located in close proximity to Singha Durbar, the seven storied building has an accommodation capacity of 500 people. With an investment of Rs 110 million, it took two years to complete construction. The main building, built in an area of 11 ropanis, was officially inaugurated in 2055 BS. The building has a parking area, a garden and three big halls. The special feature of building is that all the rooms receive adequate natural light. The Bank also has a cafeteria for the staff and two elevators.<br />
	<br />
	 </div>
<div>
	 </div>
<div>
	<span>Lomus Pharmaceuticals<br />
	<br />
	<img alt="lomus" border="1" height="276" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/lomusparmcuticals(1).jpg" vspace="10" width="320" /><br />
	<br />
	</span></div>
<div>
	Bishnu Panthee, the Vice President of Society of Nepalese Architects (SONA) is the architect of Lomus building situated at Lazimpat. While talking about Vastu, minute details have been taken into consideration and the building has a contemporary look. It has three-and-a-half floors with an overall accommodation capacity of 80 people. It took around seven months to complete the construction of the building. Constructed with an investment of about Rs 40 million, the Lomus building built on an area of 20 annas has been in operation since the last seven years. It also boasts of a spacious parking lot and a big hall.<br />
	<br />
	 </div>
<div>
	 </div>
<div>
	<span>Siddhartha Insurance<br />
	<br />
	<img alt="siddhartha" border="1" height="368" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/siddharthainsurance(1).jpg" vspace="10" width="431" /><br />
	<br />
	</span></div>
<div>
	Vastu Kala Paramarsha designed the building of Siddhartha Insurance Limited located at Babarmahal and is vastu-friendly. The five-storied building has an accommodation capacity of 42 people on each floor. With an investment of approximately Rs 90 million, the construction started in 2066 BS and it took two-and-a-half years to complete. The building came into operation five months ago. The total area of the building is 12000 sq ft and has a double basement parking in addition to two elevators. The fourth and fifth floors of the building are used by Siddhartha Insurance. Similarly, rest of the floors are given on lease. The building has a special ‘Betel Leaf’ shape on the north east direction covering second, third and fourth floors.</div>
<div>
	<br />
	<br />
	 </div>
<div>
	<span>NMB Bank<br />
	<br />
	<img alt="nmb" border="1" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/nmbbanklimited(1).jpg" vspace="10" /><br />
	<br />
	<br />
	</span></div>
<div>
	The building and interior design of NMB Bank located at Babarmahal is done by Architecture Design Firm. The building of NMB is based on vastu and can accommodate around 250 people. The building has five floors and boasts of a contemporary look. It took around one-and-a-half years to complete the building construction, with an investment of Rs 50 million. The total land area of the building is 11529 sq ft with open space covering 6980 sq ft and plinth 4547 sq ft. The bank building has separate parking facilities for two wheelers and four wheelers. Similarly, the building has training and system rooms and has ensured efficient management of space for large number of staff in the main hall. The building also has an elevator.<br />
	<br />
	<br />
	 </div>
<div>
	 </div>
<div>
	<span>Ace Development Bank<br />
	<br />
	<img alt="ace" border="1" height="339" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/acedevelopmentbanklimited(1).jpg" vspace="10" width="400" /><br />
	<br />
	</span></div>
<div>
	The corporate building of Ace Development Bank located at Naxal in Kathmandu is designed by Architect Rajesh Shrestha from Vastukala Paramarsha Nepal. From the direction of the floor face to the positioning of different departments, the structure of the building is completely based on the instruction of Vastu expert Madhav Mangal Joshi. The four-storied building accommodates around 120 employees and is built on two ropanis while the total area of the building is 20,000 sq ft. The first phase of the construction was completed in one-and-a-half years which included the basement, ground floor and first floor. The rest of the construction was completed three months ago. The bank has utilized the space to the maximum; there is a basement with parking capacity for 27 cars, a conference hall with 100 people capacity, a garden inside the compound, and a cafeteria for the staff. It has meeting halls in each floor while rain water harvesting system makes the building unique among other corporate buildings.<br />
	<br />
	 </div>
<div>
	 </div>
<div>
	<span>Nabil Bank</span></div>
<div>
	<br />
	<img alt="nabil" border="1" height="341" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/nabilbanklimited.jpg" vspace="10" width="400" /><br />
	<br />
	 </div>
<div>
	Located at Durbarmarg, the heart of Kathmandu, the corporate building of Nabil bank has a combination of modern design and vastu. The building is designed by Design Cell Pvt Ltd and the annex building took about 12 months for the construction. The total area of the building is 53500 sq ft which has six floors including the basement. The bank shifted in the building in November 2010 which accommodates around 320 staff members. There is a roof top garden, two units of elevators and two staircases in the building. Basement parking is only meant for motorbikes while two other parking spaces behind the building are for other vehicles. The basement parking accommodates around 100 motorbikes while 40 big vehicles could be parked over the ground.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	 </div>
<div>
	 </div>
<div>
	<span>Saakha Halls<br />
	<br />
	<img alt="saakha halls" border="1" height="253" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/saakhahalls.jpg" vspace="10" width="293" /><br />
	<br />
	</span></div>
<div>
	 </div>
<div>
	The five-storied corporate building of Saakha Group located at Tinkune, Kathmandu is built as per pillar system and is contemporary in design. The building is built on 2.5 ropanis while the area of the building stretches about12500 sq ft. Since the building has window glasses on three sides, there is no need to switch on the lights during the day time. The group established their office in this building two years ago that accommodates around 200 people. There is a board meeting room, a visitors room for staff and a business room. Parking facility inside the compound is available with a capacity to accommodate 15 big vehicles and 25 motorbikes. A separate pantry for staff, a 100 KV transformer and lift facility are also part of the building.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	<span>Sarada Group<br />
	<br />
	<img alt="sa" border="1" height="278" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/saradagroup.jpg" vspace="10" width="400" /><br />
	<br />
	<br />
	</span></div>
<div>
	Sarada Group’s corporate building is located at Thapathali. Designed by Architect Rajesh Shrestha of Vastukala Paramarsha, the building is built on an area of two ropanis and stretches to 40000 sq ft. Constructed at a cost of around Rs 100 million, it can accommodate around 300 people. The building has six floors including the basement parking which accommodates around 100 motorbikes and 30 vehicles. There is also a motorbike parking over the ground within the compound area. The group is operating from the third floor of the building since the last three years and has rented other floors to various businesses. It also boasts of an elevator and generator back up.</div>
<div>
	 </div>
<div>
	<br />
	 </div>
<div>
	<span>United Traders Syndicate<br />
	<br />
	<img alt="united" border="1" height="343" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/unitedtradersyndicate.jpg" vspace="10" width="400" /><br />
	<br />
	</span></div>
<div>
	The corporate office of United Traders Syndicate, the sole distributor of Toyota vehicles in Nepal, was built more than 45 years ago. The building was further renovated 15 years ago at a cost of around Rs 50 million. Built from Nepali bricks, the building has the look of a typical Nepali house with a modern design. It accommodates around 120 staff members. The five-storied building has different departments in each floor including the Chairman’s office on the third floor, a conference hall on the fourth floor and a monitoring, controlling and processing room (MCP) on the fifth floor. The parking at the building accommodates around 30 big vehicles and 50 motorbikes. The building is built on six ropanis and also features a small garden, a workshop and a sales office.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	<span>Brihat Investment<br />
	<br />
	<img alt="brihat" border="1" height="359" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/brihatinvestment.jpg" vspace="10" width="415" /><br />
	</span></div>
<div>
	 </div>
<div>
	The corporate building of Brihat investment is designed by Architect Prathana Vaidya. The company has tried its best to incorporate every possible feature based on vastu from office cabin to its desk position. Contemporary in form, the building has features like duplex unit with eight rooms, two board rooms, executive board room and an executive lounge. Lawns, separate parking areas for motorbikes and cars, pantry and a spacious garden are also part of the building. The 3500 sq ft building took one year to complete with an investment of Rs 40 million. The company shifted in this building in 2010 which also has an elevator facility. Brihat Investment itself designed the building with the concept of an open office plan for easy and cross communication between the departments as well as to take maximum advantage of the natural light.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	<span>NIC Bank<br />
	<br />
	<img alt="nicbank" border="1" height="368" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/nicbank.jpg" vspace="10" width="448" /><br />
	<br />
	<br />
	</span></div>
<div>
	 </div>
<div>
	The Biratnagar corporate office of NIC Bank is housed in a classical building on the city’s main road. Internal layout of the building is according to Vaastu and the designing credit goes to Adf Nepal. It is a two-storied building with 17 office rooms including four different halls namely customer services, board room, trade finance and company secretary. The building is built in an area of 7290 sq ft land and the interior of the building measures 6578 sq ft. The parking space at the front is about 750 sq ft which is designated for customers while the parking space behind the building is for the staff. The building has accommodation capacity for 192 employees. There is a small garden and lots of indoor plants in the building.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	Disclaimer</div>
<div>
	 </div>
<div>
	The corporate buildings featured in this article were covered as per the following criteria:</div>
<div>
	 </div>
<div>
	<span>1)<span>       </span></span>Only the corporate buildings that were conceptualized by the owning companies/business groups themselves were taken into account.</div>
<div>
	 </div>
<div>
	2) As per the criteria, the companies were expected to have their own corporate offices in the said buildings.</div>
<div>
	 </div>
<div>
	3) Even if some parts of the buildings were rented out/ leased to other businesses, they must largely reflect the identities of the (respective) majority stakeholders.</div>
<div>
	 </div>
<div>
	Additionally, we could only cover a limited number of corporate buildings for a variety of reasons and hence, the article does not represent an exhaustive list of buildings owned by corporate entities that we have in the country.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	COVER STORY</div>
<div>
	 </div>
<div>
	 </div>
<div>
	<span>‘It’s the Need for Businesses to Opt for Skyscrapers’</span></div>
<div>
	 </div>
<div>
	<img alt="bishnu" border="1" height="323" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/bishnupanday.jpg" vspace="10" width="293" /><br />
	<strong><br />
	</strong></div>
<div>
	<strong><span>BISHNU PANTHEE </span></strong></div>
<div>
	<strong><span>Vice President </span></strong></div>
<div>
	<strong><span>Society of Nepalese Architects (SONA)</span></strong></div>
<div>
	<strong><br />
	</strong></div>
<div>
	 </div>
<div>
	 </div>
<div>
	<strong>How do you comment on the recent trend of corporate houses to have custom built office buildings?</strong></div>
<div>
	 </div>
<div>
	I believe it is a positive initiation given the unmanaged urbanization in Kathmandu. The major factors of zoning and the high and low rise structures, however, should be carefully implemented while constructing custom office buildings. Such initiatives should be approved keeping in mind the safety and security factors first. Nonetheless, there should also be proper implementation of land use maps by abiding the theory of urbanization.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	 </div>
<div>
	<strong><br />
	</strong></div>
<div>
	<strong>Tell us about the experience of SONA while dealing with the corporate houses in such matters?</strong></div>
<div>
	<strong><br />
	</strong></div>
<div>
	The main concern here is the high cost of land in Kathmandu. In rising cities like Kathmandu, such artificial hikes make it difficult for the owners to purchase land for construction. It also adds more challenges on the part of SONA. Being an umbrella association of Nepali architects, SONA has experienced several ups and downs. Sometimes, our designs have also been misused. We use theory, knowledge and modern technologies in our practice. However, we still lag behind when it comes to proper implementation of the same. Ultimately, the high cost of land causes hiccups and the projects become more expensive than is expected.</div>
<div>
	 </div>
<div>
	<strong><br />
	</strong></div>
<div>
	<strong>So what could be the solutions to minimize the risks?</strong></div>
<div>
	 </div>
<div>
	To begin with, legal measures to control the artificial price of land should be taken into consideration. We haven’t strengthened ourselves technically as well as legally. Therefore, infrastructure development should be well governed and monitored by the authorized policy makers to minimize the risks. As we are rich in antique designs, much research should be done to dig into our architectural history that is unknown to most people.</div>
<div>
	 </div>
<div>
	<strong><br />
	</strong></div>
<div>
	<strong>What are the government policies in place given that Kathmandu falls under a fragile seismic zone and is highly prone to earthquakes?</strong></div>
<div>
	<strong><br />
	</strong></div>
<div>
	The government policies don’t reveal much and are also not up to the mark when compared to the global phenomenon. The loose monitoring system and purview sometimes make it so hard for us that we have to take steps to take matters into our own hands. Besides, the lack of tight scrutiny and invigilation cause the projects to fizzle out. Nevertheless, we are doing our best to comply with the basic standards. Regarding the Kathmandu Valley part of the fragile seismic, we believe that there is a solution to every problem. For example, in the case of Japan, there are many high rise buildings and the country is prone to earthquakes. If proper monitoring, quality maintenance, awareness and utilizations are in place, then we can definitely minimize the risks involved.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	<strong>What is your comment on the trend of corporate houses opting to build skyscrapers in the current scenario?</strong></div>
<div>
	 </div>
<div>
	While analyzing the trend from a global perspective, it is the need of the hour for businesses to opt for skyscrapers. In our case, I see the skyscrapers as a welcome respite to the mismanaged urbanization. Additionally, it also minimizes the projects’ completion cost. We don’t have any viable options and must adapt to the latest technologies practiced globally.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	<strong>How is SONA addressing the unethical practices in this business?</strong></div>
<div>
	<strong><br />
	</strong></div>
<div>
	SONA is an independent non-profit and professional association of architects in Nepal. We are the voice for the architects and work to protect their rights. Therefore, we try our best to discourage any unethical practices at all times. We meet and hold discussions within the association as and when any untoward and malicious situation arises. Even though we may not take any official action, we definitely try to expose such practices in the public domain.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	<strong>How do you perceive the artistic choice of the architects themselves while building these corporate offices?</strong></div>
<div>
	 </div>
<div>
	Quite literally, SONA is here to add glitter to gold. An individual architect always strives to seek his/ her identity at some point or the other. It is our responsibility to help realize that vision for every architect. For example, if someone comes with a creative design, then we scrutinize the work and finalize the decision on a bilateral basis. Therefore, the creativity of an architect’s work can be well explored ultimately. The brand value consciousness is also a prime concern for us to safeguard the professional rights and interests of the architects.</div>
<div>
	 </div>
<div>
	<strong><br />
	</strong></div>
<div>
	<strong>What are major points to consider for ideal office buildings in commercially burgeoning cities like Kathmandu?</strong></div>
<div>
	<strong><br />
	</strong></div>
<div>
	The recently built commercial buildings in Kathmandu should be careful that the historical and cultural importance of antique buildings is not disturbed. In the quest for constructing swanky buildings, the artistic values of endangered heritages must not be compromised with. Taking it as our social responsibility, SONA has discouraged such acts. For example, we have been opposing the construction of high rise buildings around Dharahara, for example, and raising our voice to keep ancient art intact while renovating old temples across Kathmandu.</div>
<div>
	<strong><br />
	</strong></div>
<div>
	<strong><br />
	</strong></div>
<div>
	<strong>Do you think the investments made by corporate houses in constructing own buildings pay them in the long run?</strong></div>
<div>
	 </div>
<div>
	This depends on the will power of the investors to cope with the challenges ahead. Given the uncertain political state of the country and ineffective policies as regards the housing sector, our path is full of thorns. The first and foremost concern is the artificial price of land. Therefore, if these issues are properly addressed, the situation may get better for the corporate houses.<br />
	<br />
	<br />
	 </div>
<div>
	 </div>
<div>
	<strong><span>‘Owning a Building Helps a Corporate House Enhance its Brand Image’<br />
	<br />
	</span></strong></div>
<div>
	<strong><br />
	<br />
	<img alt="kumar" border="1" height="320" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/kumar.jpg" vspace="10" width="278" /><br />
	</strong></div>
<div>
	<strong><br />
	</strong></div>
<div>
	<strong><span>KUMAR LAMSAL </span></strong></div>
<div>
	<strong><span>CEO, Sanima Bank</span></strong></div>
<div>
	 </div>
<div>
	 </div>
<div>
	<strong>What is the reason behind naming Sanima Bank’s building ‘Alakapuri’?</strong></div>
<div>
	 </div>
<div>
	It is because Alakapuri refers to the state ruled by Kuber, the lord of wealth. Hence, we decided to name our building after his empire because he is worshipped as an important god when it comes to money and business.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	<strong>How do you envision the latest trend of corporate houses owning swank buildings? Do you perceive this as the need of the hour for corporate houses to construct their own buildings?</strong></div>
<div>
	 </div>
<div>
	I don’t think it is compulsory or urgent for any of us to own buildings. Constructing own building depends on one’s choice and the kind of business they run. However, I think such a trend has emerged as a requirement for corporate houses where it has become increasingly important to own a building. It is a psychological factor where owning a building makes you feel secure and gives a sense of achievement. You are comfortable in that building because you have made it as per your requirements. Hence, it has become common for corporate houses these days to follow this trend.</div>
<div>
	 </div>
<div>
	<strong><br />
	</strong></div>
<div>
	<strong>Specifically speaking, what is it that led Sanima Bank to construct its own building?</strong></div>
<div>
	 </div>
<div>
	For a bank, owning a building means a lot. It leaves a good impression on the public in terms of an enhanced brand image. A bank usually works for a long term and since we are here in this business for a long time now, having our own building has had been one of our priorities. We needed the building mainly to run the business properly.</div>
<div>
	Could you please tell us about the investment that has been made in the construction of your new premises?</div>
<div>
	We have invested around Rs 34 million on the construction of the building which took three years for its completion.</div>
<div>
	<strong><br />
	</strong></div>
<div>
	<strong>Do you think the investments made in their own buildings pay the corporate houses in the long run?</strong></div>
<div>
	 </div>
<div>
	Constructing your own building itself is a long term investment for the corporate houses. It directly relates to the image of the company that can neither be built nor destroyed in a day. Although our cost is higher in comparison to the cost in the rented building that we operated from earlier, the benefits are for many years to come. We have indeed spent a huge amount in constructing the building but in the long run, that cost will be compensated in due course of time. People usually perceive a corporate house to be enjoying a certain standing if it owns a building. And the good news is; our building has started attracting walk-in clients already.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	<strong>How significant is it for you to have constructed your own corporate building and then conducting business operations from it?</strong></div>
<div>
	 </div>
<div>
	It has been significant for us primarily because we have constructed it as per our demand and design. It is based on our choice and the way the building has been constructed meets our business demand too. We are very happy to be operating from our own office and it has certainly fulfilled our expectations. Its interior design is as good as the exterior design and has more space. It is also an attractive and strong structure while the previous building was small and congested. At the end of the day, it is easier to conduct business operations from ‘Alakapuri’.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	<strong><span>‘It’s High Time for Corporate Houses to have their Own Resources’<br />
	<br />
	<br />
	<img alt="om" border="1" height="338" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/om.jpg" vspace="10" width="294" /><br />
	<br />
	</span></strong></div>
<div>
	<strong><span>OM RAJBHANDARY </span></strong></div>
<div>
	<strong><span>Chairman, Brihat Investments Pvt Ltd</span></strong></div>
<div>
	 </div>
<div>
	<strong><br />
	</strong></div>
<div>
	<strong>How old is the trend of corporate entities in Nepal moving from rented premises to their own building?</strong></div>
<div>
	<strong><br />
	</strong></div>
<div>
	If we look at the corporate culture in Kathmandu, much of the credit for this trend goes to the banking sector. They initiated it and for around 15 years now, corporate houses started having their own buildings in Kathmandu. Earlier, it was limited because most of the businesses were family-run entities. Most of the corporate houses today boast of their resources within their own premises.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	<strong>How do you envision the latest trend of corporate houses owning swank buildings? Do you perceive this as need of the hour for corporate houses to construct their own buildings?</strong></div>
<div>
	 </div>
<div>
	Yes it is high time for the corporate houses to move on with their own resources. The vital aspects of a business - property, productivity and perception should not be forgotten at any point of time. While on one hand, we lack productive infrastructure, we are keeping a tight vigil even on minor things like the use of electricity and interior designs on the other. For the entrepreneurs to start new businesses, they must increase the size of their functional area to strengthen productivity. If property area and services planning etc are not done properly, the expenses are going to be that much higher. In the present context, these things amount to savings because of the one-time investment one is putting in. Besides, people’s perception of you is different when you are staying in a rental office and don’t have your own resources. According to our traditional concept, we believe that people who own a house are stable in life. Having one’s own space in the office and possessing the premises saves on the rental.</div>
<div>
	 </div>
<div>
	<strong><br />
	</strong></div>
<div>
	<strong>What is it that led Brihat Investment to construct its own corporate office building?</strong></div>
<div>
	 </div>
<div>
	Brihat is striving to construct environment friendly homes to cater the need of people and to help non-hazardous urbanization. Using your own resources makes the working environment more conducive and also boosts the workers’ spirits. That is the main reason for Brihat Investment to construct its own building.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	<strong>What would be an ideal investment for a corporate building?</strong></div>
<div>
	 </div>
<div>
	The cost depends on requirements and clear vision. The specific need of area, infrastructure and manpower should be the prime aspects to take care of rather than the monetary value itself while investing. Even the minute things like color choice, material choice, electricity and interior designs should be well scrutinized to minimize the ultimate cost. The choices should be clear and cost effective. For example, the trend of using LED lights is for a tangible benefit. If we move forward in a balanced way, it will not be a huge financial burden in the long run.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	<strong>How significant is it for you to have constructed your own building and then conducting business operations from the premises?</strong></div>
<div>
	 </div>
<div>
	When you own a building, all the requirements are met accordingly. People look at safety as the least concerned factor. That is wrong attitude. As Kathmandu lies in an earthquake prone area, certain safety measures should be taken into consideration. The distribution of things according to the need and demand is like an art. Good management is like oxygen, we should have proper utilization of our resources to get palpable benefit. If the structural cost comes around 10- 15 per cent, the cost for safety measures and needed infrastructure only takes an additional three per centof the building cost. Hence, having your own building is of great significance.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	 </div>
<div>
	<strong>Do you think the investments made in own buildings pay the corporate houses in the long run?</strong></div>
<div>
	 </div>
<div>
	This highly depends on the political and economic situation of the country. The real estate business is not going well at present as it used to be few years back. In reality, every flourishing business pays back to the society. Here, the fluctuating political situation and unmanaged policy has affected the business a lot. If the period of uncertainty continues, then the entrepreneurs will be forced to switch over to other business. Recently, some big hotels of Kathmandu have been turned into shopping malls and it can be taken as a good example. With regular and periodical review and a long term vision, the investment in owning buildings will certainly pay off for corporate houses in the long run.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	<strong><br />
	</strong></div>
<div>
	<strong>How challenging is it for you to keep abreast with the growing demand for new designs?</strong></div>
<div>
	 </div>
<div>
	It is challenging but the investors and the designers need to have more healthy discussions on this matter to mitigate those challenges. To me, innovative ideas come first. If a designer is precise about his ideas, he should persuade me to pursue his idea. There should be a fine balance between the designer and the building owners.</div>
<div>
	 </div>',
			'published' => true,
			'created' => '2012-12-06',
			'modified' => '2013-01-04',
			'keywords' => '',
			'description' => 'Corporate houses in Nepal are attracted towards having their own buildings with a vision to make business operations easier and less time consuming among a host of other reasons. The trend of getting customized buildings constructed has caught up fast with the corporate entities in the last one-and-a-half decade or so, observe analysts.',
			'sortorder' => '630',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 9 => array(
		'Article' => array(
			'id' => '718',
			'article_category_id' => '40',
			'title' => 'Labour Dilemma',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
<!--[if gte mso 9]><xml>
 <w:WordDocument>
  <w:View>Normal</w:View>
  <w:Zoom>0</w:Zoom>
  <w:TrackMoves/>
  <w:TrackFormatting/>
  <w:AutoHyphenation/>
  <w:PunctuationKerning/>
  <w:ValidateAgainstSchemas/>
  <w:SaveIfXMLInvalid>false</w:SaveIfXMLInvalid>
  <w:IgnoreMixedContent>false</w:IgnoreMixedContent>
  <w:AlwaysShowPlaceholderText>false</w:AlwaysShowPlaceholderText>
  <w:DoNotPromoteQF/>
  <w:LidThemeOther>EN-US</w:LidThemeOther>
  <w:LidThemeAsian>X-NONE</w:LidThemeAsian>
  <w:LidThemeComplexScript>X-NONE</w:LidThemeComplexScript>
  <w:Compatibility>
   <w:BreakWrappedTables/>
   <w:SnapToGridInCell/>
   <w:WrapTextWithPunct/>
   <w:UseAsianBreakRules/>
   <w:DontGrowAutofit/>
   <w:SplitPgBreakAndParaMark/>
   <w:DontVertAlignCellWithSp/>
   <w:DontBreakConstrainedForcedTables/>
   <w:DontVertAlignInTxbx/>
   <w:Word11KerningPairs/>
   <w:CachedColBalance/>
  </w:Compatibility>
  <w:BrowserLevel>MicrosoftInternetExplorer4</w:BrowserLevel>
  <m:mathPr>
   <m:mathFont m:val="Cambria Math"/>
   <m:brkBin m:val="before"/>
   <m:brkBinSub m:val="--"/>
   <m:smallFrac m:val="off"/>
   <m:dispDef/>
   <m:lMargin m:val="0"/>
   <m:rMargin m:val="0"/>
   <m:defJc m:val="centerGroup"/>
   <m:wrapIndent m:val="1440"/>
   <m:intLim m:val="subSup"/>
   <m:naryLim m:val="undOvr"/>
  </m:mathPr></w:WordDocument>
</xml><![endif]--></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A14"><span style="font-family: ">By Gaurav Aryal</span></span></span></p>
<p>
	<span style="font-size:14px;">&nbsp;</span><span style="font-size:14px;">&nbsp;</span><span style="font-size:14px;"> </span></p>
<p class="Pa9">
	<strong><span style="font-size:14px;"><span class="A15">Labour Dilemma </span></span></strong></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span class="A34"><span style="line-height: 115%; font-family: ">An Analysis of Labour Issues Facing Nepal</span></span></span></strong></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span class="A34"><span style="line-height: 115%; font-family: ">&nbsp;<img alt="labor cover story" border="1" height="495" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/cover2.jpg" vspace="10" width="400" /></span></span></span></strong></p>
<p class="Pa25">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:normal"><span style="color: rgb(34, 30, 31);">On the eve of celebrating Nepal Investment year 2012/13, over unionisation of labour has continued alarming foreign investors and discouraging local investors to venture into new industries. Multiple unions affiliated to more than one political party exist within a company. Such politicisations of labour unions have resulted in inter union and employee-employers rifts that significantly reduce productivity along with losses of working hours. </span></b></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:normal"><span style="line-height: 115%; color: rgb(34, 30, 31);">Political instability, labour problems and power supply are said to be the major causes of poor investment climate in Nepal. According to a survey report of 2009 conducted by enterprisesurveys.org, political instability is the major constraint for doing business followed by power shortage and labour problems respectively.</span></b></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:normal"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;<img alt="political " border="1" height="270" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/cover1(1).jpg" vspace="10" width="257" /></span></b></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A4">A</span><span style="line-height: 115%; color: rgb(34, 30, 31);">ccording to Bishnu Rimal, President of General Federation of Nepalese Trade Unions (GEFONT), there are 353,000 individual members of GEFONT and altogether 29 affiliates. Similarly, there are 800,000 members in All Nepal Trade Union Federation (ANTUF) which has 42 different professional organisations as affiliates., There are around 286 trade unions registered at the Department of Labour (DoL) that are affiliated to 10 trade union federations. A total of 86 new unions have been added after the People’s Movement II, six years ago, when there were 200 unions in the fiscal year 2005/06. According to Manish Agrawal, Vice Chairman of Employers Council at FNCCI, there are 10 authorised trade unions (including GEFONT and ANTUF) at national level in Nepal and they are all affiliated to different political parties. These unions themselves are divided into different categories according to the nature of industry. There are separate unions on tourism, hospitality, service industries, banks and financial institutions and manufacturing sector rather than having branches of a unified labour union that represents overall workers from the entire business sector. <br />
	<br />
	According to World Bank data, labour unrest is one of the contributing factors for adverse investment climate. According to the Global Competitive Index 2012/13 prepared by the World Economic Forum, inadequately educated workforce is one of the major hurdles for doing business in Nepal. The same report ranks Nepal at 125th position on labour market efficiency out of 144 countries. Likewise, poor work ethic in national labour force was placed at 8th most problematic factors for doing business in Nepal.</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">In addition, restrictive labour regulations was placed in the 5th position under the same category. A report by Nepal Business Initiative (NBI) with support of South Asia Enterprise Development Facility presented to the Prime Minister in the last week of September, labour problem ranks as one of the major challenges faced by the Nepali economy. Similarly, the Global Competitiveness Report 2012–2013 lists various aspects related to the labour market of Nepal and their efficiency and their world ranking.</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">(See table).</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);"><img alt="table coverstory" border="1" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/table(1).jpg" vspace="10" />&nbsp;</span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">In nutshell, if the ongoing problem of power shortage is resolved today, labour problem will come up as the biggest hurdle to beat, for making the overall investment environment favourable for new investors and existing corporate houses. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa14" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Wrong Message to Investors </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">The never ending labour problems have given unintended messages to the local as well as foreign investors who are willing to venture into Nepal. Recent dispute in KFC and Pizza Hut has definitely given a wrong message to interested foreign investors. Similarly, Shikhar Shoes was closed after workers manhandled the Managing Director of the company and padlocked its factory at Goldhunga. It seems that labour unrest, one of the major roadblocks to higher investment, will continue unabated in the future too. </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">An investor usually looks to invest where there is favourable business environment. Experts believe that the labour issues have created a hostile environment to investments. Labour trouble experienced in Nepali units of multinational giants like Surya Nepal, Unilever, GMR and Asian Paints have turned off prospective investments to Nepal. A handful of such representative cases are enough to scare away either domestic or foreign investors. Khila Nath Dahal, Former Co-president of Nepal Trade Union Congress Independent (NTUC-I) and former President of Democratic Confederation of Nepalese Trade Union (DECONT) denied, “It is a false assumption that labours are the cause to repel the investment. Labours, investors themselves and the government policy. have roles in r creating threat to investors venturing new business in Nepal. Lack of infrastructural development like roadways, electricity and drinking water has also affected investment.” </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">However, Rimal claims that industrial strikes are in a decreasing trend. He said, “After 2008, the number of industrial strikes has been decreasing. Trade unions have contributed to only six per cent of the total work stoppages last year as around 28 per cent cases of such work stoppages were due to bandhas called by employers and the rest was contributed by political parties and other organisations.” </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Still, leading corporate houses like Chaudhary Group, Golchha Organisation, Dugar Group, among others say that due to unfavourable environment for the manufacturing sector, they have identified service sector as safer areas for investment. Service sector, except from tourism and hospitality, sees very few cases of labour strikes and union problems. These corporate houses have been minimising their foothold on manufacturing sector and moved onto the service sector like hospitality, education, banking and finance, healthcare among others. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp; <br />
	</span></p>
<p class="Pa14" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Over Politicisation of Workers </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Naturally, the private sector companies look to make profits. When the workers are involved in union activities, more than working for the company, it adversely affects the productivity. So, a voice for ‘No Work No Pay’ was raised by the entrepreneurs but it has not been implemented till date as trade unions have strongly opposed this proposal. </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Agrawal said that as per the international norms, the identity of a labour is associated with the industry. “On the contrary, the identity of the worker in Nepal is associated with the trade union to which they belong,” he clarified. </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Due to frequent strikes and even physical assault upon the employers and managers has led to closure of factories and companies. Foreign investors have shut down their industrial units and reduced their presence in the country. Agrawal said that Colgate-Palmolive is one such example. “Nepal is losing many investors because of labour problems. Recently, Surya Garment was also shut down due to labour problems,”. he said. However, Dahal says, “If the demands of employees are fulfilled they would not choose violent way to fulfil their demands. If one side does not provide basic rights of employees as stated in the Labour Law, then the other side would definitely not follow law and order also. This consequently results into imbalance between the employers and the employees.” </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">In many cases, once an issue is resolved at a point of time and place, even more severe ones are raised at the next point of time and place. Numerous industries have closed down and, looking at the recent examples of KFC and Pizza Hut, it cannot be ruled out that similar situation won’t arise in other companies too. </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Unruly unions are protected by the political parties who don’t tire talking about importance of bringing foreign investments. Different unions that belong to different political parties come up with different demands, mostly as dictated by the respective political party. Thus, there is conflict of interest and opinions among the unions themselves. They are primarily guided by party philosophy rather than working for creating a win-win situation for both employers and employees. Agrawal said, “The major problem of the trade unions in Nepal currently is that they are focused on following political ideologies of associated political parties rather than fulfilling the interests of workers.” </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">According to Agni Prasad Thapaliya, Judge at the Labour Court, one union does not allow formation of second union in the company. “In most cases, employees are not allowed to work without taking membership of a trade union and paying a levy to the union and inter-union rivalry has also become problematic. The same person is found involved in numerous unions,” he said. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa14" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Strange Demands </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">In a series of recent events, workers have come up with weird and strange demands. Labour unions at Hotel Greenwich Village, a three star hotel in Lalitpur, recently came up with a demand that their members be felicitated with a gold medal weighing one kilogram. Labour unions affiliated to the Maoists (the party that is leading the present coalition government) and CPN-UML party are pressing the hotel management submitting a 22 point demand paper.. According to the demand paper, employees who have been working for more than 20 years in the hotel should be presented gold medals each weighing more than a kg. Prabin Acharya, Deputy Managing Director at the hotel said, “It is natural to demands an increase in remuneration and compensation but a demand like this was unheard of earlier.” The hotel has resumed its operation.</span> <br />
	</span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Similarly, workers at Thai Airways Nepal office have presented an ultimatum with various absurd demands like paying their income taxes by the airline. Such activities have become a threat to the need of the day – increase investment that will have forward linkages to employment and overall national economic growth. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa14" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Legalities of Strikes </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Although Nepal too has a legal procedure to a strike, there are very few cases of complying with these procedures before a strike is held. Thapaliya said that most of the strikes are organised without following the legal procedure. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">However, the trade union leaders deny this charge. Rimal says that the legal procedure of strikes is not violated. “Labour laws are not violated in recent years. However, if employers and employees both are found defying the law, they should be brought under the book.” </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Shalikram Jamakattel, President of ANTUF says, “Strikes which are not in accordance with the law make workers’ case weak. Therefore, they go for the strikes according to the law unless there is a compulsion.’ </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">According to Thapaliya, the due process requires prior information about the strike. If the management does not settle the issues, then it is taken to the labour office, where both parties – the workers and the management - sit for dialogues. “If the dialogues do not resolve the issue, the workers should give a 30 days ultimatum. If the management does not resolve the issue even by the end of such 30 days, the workers can go for strike,” he adds. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa14" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Collective Bargaining </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Collective bargaining in Nepal is commonly focused on demanding additional facilities, mostly wages and other fringe benefits that often includes strange demands like that in the cases of Thai Airways and Greenwich Hotel. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">It is quite natural to adopt unique bargaining standpoints by the workers according to different types of companies. However, at times, workers are alleged to have come up with insatiable demands that can be hardly fulfilled by the employers. Thapaliya said that workers are often overambitious and their demands revolve around the political ideologies to which the union is affiliated, rather than relating to the overall benefits for workers. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">However, Rimal explains this differently. “I think the approach that we follow for collective bargaining is correct. We conduct collective bargaining at the central level for minimum standards like wage determination and finalise it there. Collective bargaining for maximum standards is done at the enterprise level and we think such standards should be different in different enterprises. Multinational companies have high paying capacity so we demand more from them whereas we demand less from companies that have less income and profits.” Jamakattel complains that collective bargaining is not conducted as promised in the policies. “Labours in industrial sector do collective bargaining every two years but it has not been managed systematically. Unless new labour law is made, these problems cannot be managed.” </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Agrawal on the other hand complains that there has not been effective collective bargaining as it is affected by the overruling political ideologies of trade unions they are affiliated to. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa14" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Employment Security </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Trade union leaders also complain that many employers do not provide appointment letters. Dahal says, “The law guarantees a system of providing appointment letter to employees as soon as they join a company. But there are many employees who have not received their appointment letters. Thapaliya too has the same comment to make. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Labour law also states that an employee who has completed 240 working days should automatically become a permanent employee. However, there is a system of provisional period as well. If the employer finds the performance of an employee unsatisfactory, the employer has the right to terminate the service of such employee at any time during the probation period. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">A minimum wage is fixed at Rs 6,200 per month. But many employees arereceiving less than this, complains Dahal. Therefore, he claims, more than fifty per cent of the labour strikes have been aimed to implement such provisions of the labour laws. Labour law also requires that the salary should be revised every two years. Also, this provision is neglected by employers, adds Dahal. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Out of nearly half a million youths that enter the Nepali employment market every year, around 305,000 are going abroad for jobs. According to the Central Bureau of Statistics, there are around 11.7 million people in the workforce and only 1.8 million of them are in the formal sector jobs within the country while about 3.5 million are employed abroad. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp; <br />
	</span></p>
<p class="Pa14" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Act Amendment </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Both employers’ organisations and trade unions have been demanding amendment in the Labour Act. Both believe that to maintain cordial industrial relations, the Act urgently needs amendments.. Still, the leaders of these trade unions claim that half of the existing disputes could be resolved with the existing laws if executed properly. However, Rimal) is hopeful that the proposed amendment to the Act will address the issues of daily-wage workers and those working in the informal sector. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">And it has been around 10 years since the government begun planning to amend the labour laws. Both employer’s organisations and trade unions want the law amended. However, their respective demands are different and some of them even conflicting. Employers are demanding the inclusion of provisions like ‘No Work No Pay’ and ‘Hire and Fire’ while trade unions are demanding setting minimum wage also for informal sector. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">But there are other issues as well to be incorporated in the labour law. Thapaliya says, one such provision needed is for a tripartite commission to resolve issues that could not be addressed through collective bargaining. He suggested that the informal sector too should have rules and regulations that address issues of manual labours like minimum wages, contract system, working hours and provision of social security. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa14" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Merger of Unions </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Another labour sector issue being intensely discussed these days is the merger of trade unions. During a recent function organised by GEFONT, Sharan KC, Regional Coordinator for South Asia at Trade Union Solidarity Centre of Finland (SASK) said that Nepali trade unions should merge with each other so that they become stronger and influential. He also shared examples of merger of unions in the international arena. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Employers too are positive about this proposal. Agrawal believes, “The presence of more than two trade unions within an enterprise has been creating a very difficult working atmosphere. It divides the workers into different ideologies.” He added, “There should be only one trade union for one enterprise.” </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">FNCCI is planning to form an Industrial Relations Forum involving all the presidents of major Trade Unions, industrialists and President of FNCCI. He informed, “It will be a platform to discuss the emerging issues of labour and industrial relationships. The forum will work towards safeguarding the rights of both employers and employees.” </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp; <br />
	</span></p>
<p class="Pa14" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">State’s Role </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;<span style="line-height: 115%; color: rgb(34, 30, 31);">Both the employers and employees are found unanimous on the state’s role for resolving the problems in industrial relations. As the government has a major responsibility to protect the investments in the country, it becomes the state’s responsibility to protect investors, when needed, from unlawful activities carried out by trade unions as well. Agrawal cites an example of Maruti Suzuki in India where the state came forward to provide such protection. During the recent labour strike there, the management team was beaten up by the labourers, and the Indian police deployed 500 rapid action forces. “This shows the level of concern the government has shown towards the investors. This action showed that Indian government will not tolerate repetition of such activities.. If Indian government can do it, the Nepali government too can do it,” he says. He said, “Sense of insecurity is the major problem that the investors are facing now due to the inability of the government to take actions when trade unions behave illegally.”</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;</span></span></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span class="A37"><span style="line-height: 115%; font-family: ">Upper Karnali Project</span></span></span></strong></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A37"><span style="line-height: 115%; font-family: ">&nbsp;<img alt="upper karnali" border="1" height="85" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/upperkarnali.jpg" vspace="10" width="144" /></span></span></span></p>
<p class="Pa7" style="text-align:justify">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Energy Limited, GMR Infrastructure Limited (GIL) and Italian-Thai Development Project Company had signed a Memorandum of Understanding (MoU) with the Government of Nepal, for development of 900 MW Upper Karnali Hydro electric Project. The project was set to develop under a Build, Own, Operate and Transfer (BOOT) basis. The plant was targeted to be commissioned by the end of 2016. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">The attack on Indian infrastructure and energy major GMR’s power project in western Nepal by Maoists delayed the 900 MW hydropower project to meet its 2016 completion date. The nearly $469 million project’s environmental impact assessment was on the verge of completion when the attack occurred. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Upper Karnali Hydropower Project’s camp site in Dailekh district was burnt down. The act of arson and vandalism destroyed all the three pre-fabricated buildings in Dailekh, including the GMR site office with its computers and documents. The fear of further attacks and the pulling out of all personnel was said to have caused the delay to go up further, causing an escalation in costs as well. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Soon after the attack, the second in two months, GMR’s director G Subba Rao and Harvinder Manocha, GMR Energy’s associate vice-president as well as country director for Nepal, held talks with Nepal’s erstwhile Energy Minister Gokarna Bista and all lawmakers from the three districts spanned by the project - Dailekh, Accham and Surkhet. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Besides Dailekh, Accham and Surkhet, GMR’s projects in Nepal, including the 600 MW Upper Marsyangdi, have been regularly threatened by the Maoists with their top leaders demanding that their licenses be scrapped. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">The Independent Power Producers’ Association of Nepal warned the government in a press statement that such attacks would demolish investors’ confidence in Nepal. Facing an 18-20 hour daily power cut during the dry winter and summer seasons, Nepal has been banking on the Upper Karnali project to ease the power crisis within the next five years. GMR Group is a Bangalore headquartered global infrastructure major with interests in Airports, Energy, Highways and Urban infrastructure.</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;</span></span></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span class="A37"><span style="line-height: 115%; font-family: ">Surya Nepal Textile</span></span></span></strong></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A37"><span style="line-height: 115%; font-family: ">&nbsp;<img alt="surya nepal" border="1" height="91" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/suryanepal.jpg" vspace="10" width="160" /></span></span></span></p>
<p class="Pa7" style="text-align:justify">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Established in 2004 with an investment of approximately Rs 700 million, Surya Nepal Private Limited’s garment manufacturing unit - Surya Textile Industry - had been providing jobs to 608 workers directly, while the number of workers indirectly related to textile industry was more than 1,000. </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Remunerations demanded by workers for the eight days strike that took place in mid-April 2011 and the management’s refusal to provide any remuneration, under the “no work no pay” provision, in the long run turned out to be the main reason for the permanent closure of Surya Textile. Workers didn’t agree with the “no work no pay” pact arguing that they were present inside the industry’s premises during the strike but could not work, because the industry itself was closed. This way, arguments and counter arguments continued and it deepened the conflict between management and labourers. On June 14, the situation worsened when factory workers, under backing from major trade unions, locked up 42 officials of the management without food and water supply for more than 24 hours. Finally, police had to rescue the captivated officials forcefully, because the major trade unions wanted their demand to be fulfilled immediately, or else they were not ready to release the officials. During the rescue clash, 8 labourers and 12 policemen were injured. After the officials were rescued, the management announced an indefinite closure of the industry effective from June 15 itself. </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;<span style="line-height: 115%; color: rgb(34, 30, 31);">Since June 15 to August 17, the industry remained closed during which labourers and even the trade unions demonstrated to re-open the industry but the management continuously refused to re-open citing unfriendly industrial climate and security problems. Finally, an agreement was reached among representatives of Morang Industry Organisation, Trade Unions and Surya Nepal to shut down the industry permanently paying Rs 29,800 as lay-off benefits to each worker and also according to agreement, the laid-off workers will be given priority as per the workers’ efficiency and capacity if the company comes up with new venture or resume its factory again. The security problems, militant trade unionism and their irrational demands, according to the management, forced the company to permanently close the textile industry. Irrespective of many other cases where monthly wage is the main cause of rift between management and labourers, Surya Textile was an exception. Sanjiv Keshava, Surya Nepal’s Managing Director, claimed themselves as good paymaster and explained that they paid almost double the amount stated in the minimum wage.</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;</span></span></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span class="A37"><span style="line-height: 115%; font-family: ">KFC and Pizza Hut</span></span></span></strong></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A37"><span style="line-height: 115%; font-family: ">&nbsp;<img alt="kfc and pizza hut" border="1" height="82" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/KFC.jpg" vspace="10" width="144" /></span></span></span></p>
<p class="Pa7" style="text-align:justify">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Outlets of international fast food chains KFC, Pizza Hut and Cream Bell resumed operation on September 17, 2012 after a three point agreement between the workers and the management. KFC, the biggest fast food chain in Nepal, had remained closed for over a month. On August 14, 2012 Devyani International, a subsidiary of Varun Beverages which operates outlets of KFC and Pizza Hut in Nepal had written a letter to authorities with announcement of immediate closure of all the four KFC and Pizza Hut restaurants running in the capital. “In order to disrupt our operations, some staff have physically attacked and threatened to kill the senior managers,” the letter read. </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">The settlement of dispute took nearly a month’s time because the management was seeking action against those law breakers who threatened to kill the managers. Moreover, it was demanding a commitment from the workers on not repeating such violent behaviour again. The management of the company decided to reopen the outlets after taking action against 22 staff who manhandled a senior manager of the company. Yogendra Kumal, Joint Coordinator of All Nepal Trade Union Federation (Revolutionary); Tika Subedi, Vice President of ANHWU-R; Nawaraj Bhatta, President of ANHRWU-R´s Devyani International Nepal unit and Vishnu Reddy, Country Manager of Devyani International, signed the pact. As per the agreement, the trade union will make all the staff obey rules and regulations of the company and will not object if the management takes action on those violating the company´s rules. Likewise, the management agreed to respect the trade union rights. On August 29, the workers registered ANHRWU (All Nepal Hotel and Restaurant Workers Union-Revolutionary). </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;<span style="line-height: 115%; color: rgb(34, 30, 31);">The fast food chain had been talk of the town since there was a dispute over the formation of a trade union. According to the sources, the management and its employees started crossing swords with each other in August after cadres of the Mohan Baidya led CPN-Maoist goaded the staff into forming the party’s trade union. The five outlets used to record average daily turnover of Rs 800,000. According to the senior managerial staff at KFC Durbarmarg, the company suffered a loss of around Rs 30 million including loss of perishable goods.</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp; <br />
	</span></span></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span class="A38"><span style="line-height: 115%; font-family: ">‘Activities of Trade Unions and Employers are Guided by Traditional Mentality’</span></span></span></strong></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span class="A38"><span style="line-height: 115%; font-family: ">&nbsp;<img alt="agni parajuli" border="1" height="292" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/agni.jpg" vspace="10" width="253" /></span></span></span></strong></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A0">AGNI PRASAD THAPALIYA<br />
	Judge <br />
	<span style="line-height: 115%; font-family: ">Labour Court</span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A0"><span style="line-height: 115%; font-family: ">&nbsp;</span><b style="mso-bidi-font-weight:normal"><span style="line-height: 115%; font-family: "> <br />
	</span></b></span></span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">How do you view the current labour situation as a judge of Labour Court? </span></b></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Labour court gives its verdict on a legal basis on the disputes whatsoever comes to the court. The labour statutes have envisioned secured employment, secured employees and guarantee of social security. Looking at these, it seems that our law is labour oriented to some extent because it has made provision of secured work for workers. But in practice, workers are forced to work for a company for a long time without an appointment letter. In many cases, they don’t even have attendance files and they are not even given identity cards. To file a case in the court, one must be able to produce evidences. There must be some evidences like employment letter, identity card, payslip or attendance registers. In some case, none of these are existent. There are cases where people are put to work like bonded labours. Companies must formally employ its workers with proper documentation that clearly mentions post, type of work, job description and remuneration, according to the legal provision. There are cases where employers have not followed these rules. Based on available documents and evidences, we have made verdicts in the favour of employees. In some cases, we have not been able to reinstate the workers. Similarly, to employ foreigners in Nepal, having a work permit from the Department of Labour is a must when the company has to hire foreigners. But a research I have conducted shows that around 20 per cent employees are working without permit in the bordering areas. Similarly, around 48 per cent employees are put to work sans contract papers. There is also disparity on salary of males and females. There are also cases of sexual harassments at work. In the absence of provision to address sexual harassment in our labour law, decision made by the management of a company has been endorsed also by the court and in some cases; international law is also put into practice. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;<b style="mso-bidi-font-weight:normal"> <br />
	</b></span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">What is the annual number of cases that are filed in the labour court? </span></b></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Most of the cases reinstated in labour court are about unlawful dismissal of employees. In many cases, the misconduct is not established while in some cases there are shortcomings in the job done by the workers. There are situations when the workers have to be reinstated if misconduct is not proved or employees are not allowed an opportunity of clarification. There were 103 verdicts made last year through the labour court and 84 cases were appealed against the actions of proprietors or against decisions of Labour Offices. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;">&nbsp;<b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">It seems that labour unions are guided by political ideologies rather than for the benefits of workers. How do you view this?</span></b></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">&nbsp;Politics has also made inroads into civil service and police while it was common in the private sector. But, this is sad. It is said that a manager accuses member of another trade union with the help of one union. Such practices do not benefit the private sector. Activities of trade unions and employers show that they are guided by a traditional mentality though the overall national political and economic situation has changed with time. Employers have not got rid of their bossy nature. Although the law mentions a proper procedure to hire employees, the regulation is not properly followed. But employers or proprietors have not followed the legal procedures, so, there is the problem. Similarly, workers too are overambitious. Due to political reason, and over ambition of workers, without understanding the financial condition of the industries and even the economy, workers always want to be benefitted and enjoy attractive facilities. World history shows extreme cases of exploitation of labour and industrialists too suffered a lot but we don’t have such a situation. Our situation is definitely better. Our law addresses almost every issue of the formal sector. Both the parties have their own standpoint, so, the private sector and investment is in dire straits. This has increased the chances of capital flight. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;">&nbsp;<b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">What is the process of collective bargaining? How much have Nepali trade unions complied with the legal provision? </span></b></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Collective bargaining does not come under jurisdiction of the court. Agreements made based on collective bargaining are implemented equivalent to law. Though agreements made are implemented, in most of the cases the major problem is, agreements cannot be made. To resolve such issues, a dispute resolution body needs to be formed. As we are under the tripartite model recognised by the ILO, the personal disputes are resolved by the court while collective disputes are not solved through negotiation between employees and proprietor in the presence of Labour Office. After that, a mediator may be appointed through the consent of both parties who can settle dispute through mediation. In case the mediator fails to settle the issue, employees can file ultimatum to go on a strike. On the other hand, employers can lockup his/her business in case s/he has been unsatisfied by the complaint of employees. So, our labour law does not address effective mechanism for resolving collective issue. It is a lacuna in our law. In the absence of an authentic body to settle collective issues, the private sector is not moving ahead as it should have. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">What are the legalities of industrial strikes? Do you see those legalities followed by unions as well as companies? </span></b></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">The process of strike has not been followed at all. A negligible number of strikes are organised following the legal procedure. Most of them are organised all of a sudden. The process involves prior information about the strike. If the management does not settle the issues, then the issue is taken to the labour office where they can sit for dialogues. Even if the dialogues do not resolve the issue, a mediator can be appointed by the consent of both parties. In case, the mediator fails to settle issues or there is no understanding on appointing a mediator, labourers can go for strike but again a 30 days ultimatum should be given. When the management body does not listen to the demand within the ultimatum, strikes can then be organised. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">It is said that judiciary has been making pro-labour decisions. What is your take on it? </span></b></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Labour issues are not criminal cases. An Indian pioneer on labour law, Gulzarilal Nanda said that if the labour cases are treated on the basis of whoever produces more evidences, you are not trying to give justice to the labourers. Likewise, if a convict gets the benefit of doubt and the judge maintains silence or acts like an umpire to see which party will produce more evidences, then the justice is denied. So, a labour court judge must find out the facts and evidences. The employer always looks to employ workers at minimum facilities and make higher profit. So, the labour law procedure is quite different in nature. In the labour court, a judge must be active enough to guarantee justice. Investors feel that they must have absolute power over employees to protect their investments. In cases against employers that do not fulfil the legal procedure, justice is given in favour of labourers rather than of the employers. In numerous cases it is found that workers are alleged of wrongdoings when actually they have not committed mistakes. Even if they have committed misconduct; they are not given a chance for clarification. In such cases, decisions made by managers are reverted by the court. Therefore, when employees win the case, the industrialists say that verdicts are being labour oriented but it is not true. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp; <br />
	</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">A voice for amendment of labour law is being raised. Do you think the amendment is really needed? </span></b></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Compared to the law of other countries, one thing that needs to be incorporated into the labour law is – making a provision of a tripartite committee or commission to sort out issues that are not resolved through the collective bargaining procedure. The law must mention a certain mechanism to resolve the collective disputes. In least developed countries like Nepal, there is presence of a strong informal sector. A huge number of employed people in these sectors are in the form of manual labours like agricultural workers and household workers. The workers are still working like bonded labours. Therefore the informal sector too should have certain rules and regulations. So, there should be a regulation that addresses their minimum wages, contract system, working hours and provision of social security. As we have moved into a democratic system and become the part of the network of the UN, we have to timely and properly address these issues and control inhuman activities too. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">It is alleged that feeling of insecurity prevails in the labour court. To what extent is it true? </span></b></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;<span style="line-height: 115%; color: rgb(34, 30, 31);">In my tenure of three years, I have not felt any kind of insecurity as of now. Apart from minor arguments from labourers, there is no interference and threat seen till this day. But as the overall judiciary is said to be insecure at the national level being the part of the overall broad framework of the judiciary, labour court is also insecure from that perspective. As an individual entity, there are no such issues in the labour court.</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;</span></span></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span class="A38"><span style="line-height: 115%; font-family: ">‘Trade Unions Contributed only Six Per cent of the Total Strikes’</span></span></span></strong></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span class="A38"><span style="line-height: 115%; font-family: ">&nbsp;<img alt="bishnu" border="1" height="398" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/bishnu.jpg" vspace="10" width="346" /></span></span></span></strong></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A0">BISHNU RIMAL <br />
	President <br />
	<span style="line-height: 115%; font-family: ">GEFONT</span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A0"><b style="mso-bidi-font-weight:normal"><span style="line-height: 115%; font-family: ">&nbsp;</span></b></span></span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">How many members are there in your union and how do you manage them? </span></b></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">There are more than 353,000 individual members in our union and 29 affiliates altogether. The affiliates recruit members on their own under our co-ordination and connect them with us but we do not subscribe direct membership. We have committees at the local and district levels. And at the entrepreneur level, they choose one male and female candidate each as our representatives. The committee of the registered union becomes our member in a national level. The affiliates are action oriented while the role of GEFONT is that of coordination. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">Why are industrial strikes so recurrent in Nepal? </span></b></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Strikes were frequent between 2006 and 2008 but after 2008, the frequency of industrial strikes has gone down. If you follow the website www.nepalbanda.com, you will find that trade unions have contributed only six percent of the total bandhas in the last year while around 28 percent bandhas were called by employers and the rest was contributed by parties and other organizations. If you are confusing political strikes with trade unions’ strikes, it is a mistake. If counted, there are hardly three companies where unions called strikes namely Surya Nepal, Pizza Hut and Unilever up to now. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">Do you think the trade unions in Nepal are following the right approach in collective bargaining? </span></b></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Since we do not call it collective bargaining across the board, I think the approach that we follow for collective bargaining is proper. We conduct bargaining at the central level committee for minimum standards like wage determination and finalize it there. Collective bargaining is for maximum standards and we do it according to the type of company in question. Multinational companies have high paying capacity so we demand more whereas we demand less from the less earning companies. Before getting into bargaining process, it is essential to find whether the company is in profit or not. There was a huge bargaining at local level when the Khimti Project was firing 89 workers. According to the law, it had to pay two per cent of the total earnings to the workers and the labors’ demand approach was correct. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">Due to the violent strikes and vandalism, private sector employers in Nepal fear to hire Nepali workers. How do you view this? </span></b></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Violent strikes are rare as far as I know. The strike against Surya Nepal is the only example that I can give for vandalism in the private sector. Apart from that, strikes are usually seen at the government service and public sector. Recently, there was a strike at Unilever in Hetauda for a week and the problem was solved immediately after the negotiations. If we go through case-by-case, we may find some cases that nurtured vandalism but in general, employees are not feared to hire Nepali workers. Moreover, I have heard that employees in Nepal are longing to hire Nepali workers but they are not finding any mainly because of the scarcity of the workers in Nepal. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;">&nbsp;<b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">What are the problems that the workers are facing in Nepali industries? </span></b></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Firstly, at the policy level, the main problem that we are facing is the ineffectiveness of the rule of law. Even the industrialists are not providing minimum wages to the workers while the minimum wage is Rs 6,200 only. Unless there is a labor inspection system, we cannot find out whether the rule of law has been followed or not. Our law says that after 240 days of working, a worker is permanent at the company but there are many outsourced labors working for years and the jobs are mostly informal. Secondly, the problem of meager pay has been on the rise. High productivity of the workers can be seen only if they are paid adequately. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Besides, there is no social security in the companies. In any developed country, workers get pension after 20 years of service in a company but this social protection is rare in Nepali companies. More than Rs 200 million has been collected since the government has put one per cent tax on the companies for the social security of the workers. Accident insurance and medical insurance should be implemented but there are no schemes yet. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">The employers here fear that if the workers are made permanent, there will be less productivity. They believe that the workers are more productive when they work in fear. If there were no problems in permanent and temporary jobs, there wouldn’t be strikes in most of the industries. Workers are often agitated because there is low salary, no job guarantee and no social protection. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">Experts are saying that over unionization of labors has affected industries badly. What are your views on it? </span></b></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Conflict results from the sour relationship between management and workers, not from unionization. It is true that there are more unions in in service sector companies while some companies that provide informal job opportunities do not have unions at all. Unions are not the problems in companies because they solve most problems of the employers. A union solves the problems of each and every worker in the company and in most organizations, union leaders maintain labor relations with the management. The number of the unions is not a problem for an employee or the employer as long as authenticity of the union or the members of the bargaining team selected by the workers themselves is maintained. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">Intra-party/intra-union problems and power struggle are common among Nepali trade unions. You as the President of GEFONT may have realized that as well. What do you think could be the solution? </span></b></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Historically, there has always been a relation between Nepali political parties and trade unions. But it should be noted that Nepali trade unions are formed according to the law. Whether there is one or more than 20 unions in an organization, the employees should acknowledge that there should be a national election for an authentic union. For example, if there are four unions in an organization, the bargaining panel will be formed according to the votes in the election regardless of who the ruler of the union is. It’s only then that the multiplicity of the unions can be managed easily. Problems occur from the employers’ side too because their behavior changes according to the relationship with the union. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">As the trade unions in Nepal are affiliated to one or the other political party, they seem busy in politics than in promoting workers’ interests. How can this be resolved? </span></b></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Unions alone are not affiliated to political parties, employers too are affiliated and involved with the parties. In a multi-party system, affiliation to political parties is common and ideologically, it is correct too. </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">From the perspective of the laborers, we are purely representing the laborers inside the companies. We are not indulging in any politics, however, our people are affiliated with different political parties. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">Labor disputes and shutdown of the industries are perceived as a threat to the investors venturing into new businesses in Nepal. How is your union going about it? </span></b></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Had you gone through the document called ‘Doing Business’, you would find that the labor disputes are in the sixth number among other problems. Companies making high investments in Sunsari- Biratnagar corridor are demanding more labors. The report by World Bank has also put labor problems in seventh among others whereas the number one problem is government’s legal hassles and number two is the problem of taxation. No investor has withdrawn his investment because of the unions or the workers. Recently, we organized the third Labor and Employment Conference in Kathmandu where we jointly made a 15-points declaration regarding the welfare of the workers. We We shared that we do not have anything against the employers; rather, we had a common view that we lacked a proper government bureaucracy. Unions are often dragged between the ineffective government and the political parties which is not right. Investors say labour law is not good in Nepal but they have never blamed workers or the unions for being unfriendly towards investments. <br />
	</span></span></p>
<p>
	<br />
	<br />
	<br />
	<br />
	<br />
	<br />
	<br />
	According to the Central Bureau of Statistics, the country has about 11.7 million workforce and only 1.8 million are in the formal sector and around 3.5 million are in foreign jobs. Rest of them are either unemployed or in informal sector. What do you think should be done to attract more investments that help in reducing labor',
			'published' => true,
			'created' => '2012-10-30',
			'modified' => '2012-12-06',
			'keywords' => '',
			'description' => 'On the eve of celebrating Nepal Investment year 2012/13, over unionisation of labour has continued alarming foreign investors and discouraging local investors to venture into new industries. Multiple unions affiliated to more than one political party exist within a company. Such politicisations of labour unions have resulted in inter union and employee-employers rifts that significantly reduce productivity along with losses of working hours.',
			'sortorder' => '613',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 10 => array(
		'Article' => array(
			'id' => '704',
			'article_category_id' => '40',
			'title' => 'Remittance  : Reducing Poverty',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
<!--[if gte mso 9]><xml>
 <w:WordDocument>
  <w:View>Normal</w:View>
  <w:Zoom>0</w:Zoom>
  <w:TrackMoves/>
  <w:TrackFormatting/>
  <w:PunctuationKerning/>
  <w:ValidateAgainstSchemas/>
  <w:SaveIfXMLInvalid>false</w:SaveIfXMLInvalid>
  <w:IgnoreMixedContent>false</w:IgnoreMixedContent>
  <w:AlwaysShowPlaceholderText>false</w:AlwaysShowPlaceholderText>
  <w:DoNotPromoteQF/>
  <w:LidThemeOther>EN-US</w:LidThemeOther>
  <w:LidThemeAsian>X-NONE</w:LidThemeAsian>
  <w:LidThemeComplexScript>X-NONE</w:LidThemeComplexScript>
  <w:Compatibility>
   <w:BreakWrappedTables/>
   <w:SnapToGridInCell/>
   <w:WrapTextWithPunct/>
   <w:UseAsianBreakRules/>
   <w:DontGrowAutofit/>
   <w:SplitPgBreakAndParaMark/>
   <w:DontVertAlignCellWithSp/>
   <w:DontBreakConstrainedForcedTables/>
   <w:DontVertAlignInTxbx/>
   <w:Word11KerningPairs/>
   <w:CachedColBalance/>
  </w:Compatibility>
  <w:BrowserLevel>MicrosoftInternetExplorer4</w:BrowserLevel>
  <m:mathPr>
   <m:mathFont m:val="Cambria Math"/>
   <m:brkBin m:val="before"/>
   <m:brkBinSub m:val="--"/>
   <m:smallFrac m:val="off"/>
   <m:dispDef/>
   <m:lMargin m:val="0"/>
   <m:rMargin m:val="0"/>
   <m:defJc m:val="centerGroup"/>
   <m:wrapIndent m:val="1440"/>
   <m:intLim m:val="subSup"/>
   <m:naryLim m:val="undOvr"/>
  </m:mathPr></w:WordDocument>
</xml><![endif]--></p>
<p>
<!--[if gte mso 9]><xml>
 <w:LatentStyles DefLockedState="false" DefUnhideWhenUsed="true"
  DefSemiHidden="true" DefQFormat="false" DefPriority="99"
  LatentStyleCount="267">
  <w:LsdException Locked="false" Priority="0" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Normal"/>
  <w:LsdException Locked="false" Priority="9" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="heading 1"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 2"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 3"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 4"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 5"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 6"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 7"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 8"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 9"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 1"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 2"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 3"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 4"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 5"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 6"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 7"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 8"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 9"/>
  <w:LsdException Locked="false" Priority="35" QFormat="true" Name="caption"/>
  <w:LsdException Locked="false" Priority="10" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Title"/>
  <w:LsdException Locked="false" Priority="1" Name="Default Paragraph Font"/>
  <w:LsdException Locked="false" Priority="11" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Subtitle"/>
  <w:LsdException Locked="false" Priority="22" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Strong"/>
  <w:LsdException Locked="false" Priority="20" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Emphasis"/>
  <w:LsdException Locked="false" Priority="59" SemiHidden="false"
   UnhideWhenUsed="false" Name="Table Grid"/>
  <w:LsdException Locked="false" UnhideWhenUsed="false" Name="Placeholder Text"/>
  <w:LsdException Locked="false" Priority="1" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="No Spacing"/>
  <w:LsdException Locked="false" Priority="60" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Shading"/>
  <w:LsdException Locked="false" Priority="61" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light List"/>
  <w:LsdException Locked="false" Priority="62" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Grid"/>
  <w:LsdException Locked="false" Priority="63" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 1"/>
  <w:LsdException Locked="false" Priority="64" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 2"/>
  <w:LsdException Locked="false" Priority="65" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 1"/>
  <w:LsdException Locked="false" Priority="66" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 2"/>
  <w:LsdException Locked="false" Priority="67" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 1"/>
  <w:LsdException Locked="false" Priority="68" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 2"/>
  <w:LsdException Locked="false" Priority="69" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 3"/>
  <w:LsdException Locked="false" Priority="70" SemiHidden="false"
   UnhideWhenUsed="false" Name="Dark List"/>
  <w:LsdException Locked="false" Priority="71" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Shading"/>
  <w:LsdException Locked="false" Priority="72" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful List"/>
  <w:LsdException Locked="false" Priority="73" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Grid"/>
  <w:LsdException Locked="false" Priority="60" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Shading Accent 1"/>
  <w:LsdException Locked="false" Priority="61" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light List Accent 1"/>
  <w:LsdException Locked="false" Priority="62" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Grid Accent 1"/>
  <w:LsdException Locked="false" Priority="63" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 1 Accent 1"/>
  <w:LsdException Locked="false" Priority="64" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 2 Accent 1"/>
  <w:LsdException Locked="false" Priority="65" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 1 Accent 1"/>
  <w:LsdException Locked="false" UnhideWhenUsed="false" Name="Revision"/>
  <w:LsdException Locked="false" Priority="34" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="List Paragraph"/>
  <w:LsdException Locked="false" Priority="29" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Quote"/>
  <w:LsdException Locked="false" Priority="30" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Intense Quote"/>
  <w:LsdException Locked="false" Priority="66" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 2 Accent 1"/>
  <w:LsdException Locked="false" Priority="67" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 1 Accent 1"/>
  <w:LsdException Locked="false" Priority="68" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 2 Accent 1"/>
  <w:LsdException Locked="false" Priority="69" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 3 Accent 1"/>
  <w:LsdException Locked="false" Priority="70" SemiHidden="false"
   UnhideWhenUsed="false" Name="Dark List Accent 1"/>
  <w:LsdException Locked="false" Priority="71" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Shading Accent 1"/>
  <w:LsdException Locked="false" Priority="72" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful List Accent 1"/>
  <w:LsdException Locked="false" Priority="73" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Grid Accent 1"/>
  <w:LsdException Locked="false" Priority="60" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Shading Accent 2"/>
  <w:LsdException Locked="false" Priority="61" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light List Accent 2"/>
  <w:LsdException Locked="false" Priority="62" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Grid Accent 2"/>
  <w:LsdException Locked="false" Priority="63" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 1 Accent 2"/>
  <w:LsdException Locked="false" Priority="64" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 2 Accent 2"/>
  <w:LsdException Locked="false" Priority="65" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 1 Accent 2"/>
  <w:LsdException Locked="false" Priority="66" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 2 Accent 2"/>
  <w:LsdException Locked="false" Priority="67" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 1 Accent 2"/>
  <w:LsdException Locked="false" Priority="68" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 2 Accent 2"/>
  <w:LsdException Locked="false" Priority="69" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 3 Accent 2"/>
  <w:LsdException Locked="false" Priority="70" SemiHidden="false"
   UnhideWhenUsed="false" Name="Dark List Accent 2"/>
  <w:LsdException Locked="false" Priority="71" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Shading Accent 2"/>
  <w:LsdException Locked="false" Priority="72" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful List Accent 2"/>
  <w:LsdException Locked="false" Priority="73" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Grid Accent 2"/>
  <w:LsdException Locked="false" Priority="60" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Shading Accent 3"/>
  <w:LsdException Locked="false" Priority="61" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light List Accent 3"/>
  <w:LsdException Locked="false" Priority="62" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Grid Accent 3"/>
  <w:LsdException Locked="false" Priority="63" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 1 Accent 3"/>
  <w:LsdException Locked="false" Priority="64" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 2 Accent 3"/>
  <w:LsdException Locked="false" Priority="65" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 1 Accent 3"/>
  <w:LsdException Locked="false" Priority="66" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 2 Accent 3"/>
  <w:LsdException Locked="false" Priority="67" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 1 Accent 3"/>
  <w:LsdException Locked="false" Priority="68" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 2 Accent 3"/>
  <w:LsdException Locked="false" Priority="69" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 3 Accent 3"/>
  <w:LsdException Locked="false" Priority="70" SemiHidden="false"
   UnhideWhenUsed="false" Name="Dark List Accent 3"/>
  <w:LsdException Locked="false" Priority="71" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Shading Accent 3"/>
  <w:LsdException Locked="false" Priority="72" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful List Accent 3"/>
  <w:LsdException Locked="false" Priority="73" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Grid Accent 3"/>
  <w:LsdException Locked="false" Priority="60" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Shading Accent 4"/>
  <w:LsdException Locked="false" Priority="61" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light List Accent 4"/>
  <w:LsdException Locked="false" Priority="62" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Grid Accent 4"/>
  <w:LsdException Locked="false" Priority="63" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 1 Accent 4"/>
  <w:LsdException Locked="false" Priority="64" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 2 Accent 4"/>
  <w:LsdException Locked="false" Priority="65" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 1 Accent 4"/>
  <w:LsdException Locked="false" Priority="66" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 2 Accent 4"/>
  <w:LsdException Locked="false" Priority="67" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 1 Accent 4"/>
  <w:LsdException Locked="false" Priority="68" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 2 Accent 4"/>
  <w:LsdException Locked="false" Priority="69" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 3 Accent 4"/>
  <w:LsdException Locked="false" Priority="70" SemiHidden="false"
   UnhideWhenUsed="false" Name="Dark List Accent 4"/>
  <w:LsdException Locked="false" Priority="71" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Shading Accent 4"/>
  <w:LsdException Locked="false" Priority="72" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful List Accent 4"/>
  <w:LsdException Locked="false" Priority="73" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Grid Accent 4"/>
  <w:LsdException Locked="false" Priority="60" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Shading Accent 5"/>
  <w:LsdException Locked="false" Priority="61" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light List Accent 5"/>
  <w:LsdException Locked="false" Priority="62" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Grid Accent 5"/>
  <w:LsdException Locked="false" Priority="63" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 1 Accent 5"/>
  <w:LsdException Locked="false" Priority="64" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 2 Accent 5"/>
  <w:LsdException Locked="false" Priority="65" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 1 Accent 5"/>
  <w:LsdException Locked="false" Priority="66" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 2 Accent 5"/>
  <w:LsdException Locked="false" Priority="67" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 1 Accent 5"/>
  <w:LsdException Locked="false" Priority="68" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 2 Accent 5"/>
  <w:LsdException Locked="false" Priority="69" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 3 Accent 5"/>
  <w:LsdException Locked="false" Priority="70" SemiHidden="false"
   UnhideWhenUsed="false" Name="Dark List Accent 5"/>
  <w:LsdException Locked="false" Priority="71" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Shading Accent 5"/>
  <w:LsdException Locked="false" Priority="72" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful List Accent 5"/>
  <w:LsdException Locked="false" Priority="73" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Grid Accent 5"/>
  <w:LsdException Locked="false" Priority="60" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Shading Accent 6"/>
  <w:LsdException Locked="false" Priority="61" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light List Accent 6"/>
  <w:LsdException Locked="false" Priority="62" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Grid Accent 6"/>
  <w:LsdException Locked="false" Priority="63" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 1 Accent 6"/>
  <w:LsdException Locked="false" Priority="64" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 2 Accent 6"/>
  <w:LsdException Locked="false" Priority="65" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 1 Accent 6"/>
  <w:LsdException Locked="false" Priority="66" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 2 Accent 6"/>
  <w:LsdException Locked="false" Priority="67" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 1 Accent 6"/>
  <w:LsdException Locked="false" Priority="68" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 2 Accent 6"/>
  <w:LsdException Locked="false" Priority="69" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 3 Accent 6"/>
  <w:LsdException Locked="false" Priority="70" SemiHidden="false"
   UnhideWhenUsed="false" Name="Dark List Accent 6"/>
  <w:LsdException Locked="false" Priority="71" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Shading Accent 6"/>
  <w:LsdException Locked="false" Priority="72" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful List Accent 6"/>
  <w:LsdException Locked="false" Priority="73" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Grid Accent 6"/>
  <w:LsdException Locked="false" Priority="19" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Subtle Emphasis"/>
  <w:LsdException Locked="false" Priority="21" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Intense Emphasis"/>
  <w:LsdException Locked="false" Priority="31" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Subtle Reference"/>
  <w:LsdException Locked="false" Priority="32" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Intense Reference"/>
  <w:LsdException Locked="false" Priority="33" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Book Title"/>
  <w:LsdException Locked="false" Priority="37" Name="Bibliography"/>
  <w:LsdException Locked="false" Priority="39" QFormat="true" Name="TOC Heading"/>
 </w:LatentStyles>
</xml><![endif]--><!--[if gte mso 10]>
<style>
 /* Style Definitions */
 table.MsoNormalTable
	{mso-style-name:"Table Normal";
	mso-tstyle-rowband-size:0;
	mso-tstyle-colband-size:0;
	mso-style-noshow:yes;
	mso-style-priority:99;
	mso-style-qformat:yes;
	mso-style-parent:"";
	mso-padding-alt:0in 5.4pt 0in 5.4pt;
	mso-para-margin-top:0in;
	mso-para-margin-right:0in;
	mso-para-margin-bottom:10.0pt;
	mso-para-margin-left:0in;
	line-height:115%;
	mso-pagination:widow-orphan;
	font-size:11.0pt;
	font-family:"Calibri","sans-serif";
	mso-ascii-font-family:Calibri;
	mso-ascii-theme-font:minor-latin;
	mso-hansi-font-family:Calibri;
	mso-hansi-theme-font:minor-latin;
	mso-bidi-font-family:"Times New Roman";
	mso-bidi-theme-font:minor-bidi;}
</style>
<![endif]--></p>
<p class="MsoNormal">
	<span style="font-size:16px;"><span style="line-height: 115%;"><img alt="remit" border="1" height="284" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/remittance.jpg" vspace="10" width="449" /><br />
	<br />
	<br />
	Income received as the Nepali workers’ remittances working abroad has become an automatic instrument for poverty reduction in Nepal. Remittance has been recognised as a key to solve various economic ills afflicting the country. Moreover, it has raised some obvious questions. For instance, long the national economy can solely depend on the source of remittance to sustain itself? Is it possible to use the remitted money to improve social livelihood of the Nepali people or, can it be used in more productive sector? Can our policymakers think beyond the box of remittance economy?</span></span></p>
<p class="MsoNormal">
	<span style="font-size:16px;"><span style="line-height: 115%;">&nbsp;</span></span></p>
<p class="MsoNormal">
	<span style="font-size:10.0pt;line-height:115%">55 New Business Age | September 2012</span></p>
<p class="MsoNormal">
	<span style="font-size:10.0pt;line-height:115%">&nbsp;<br />
	<br />
	<img alt="coverstory" border="1" height="339" hspace="5" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/coverstory_1.jpg" vspace="5" width="300" /><br />
	</span></p>
<p class="MsoNormal">
	<span class="A8"><span myriad="" style="font-size:24.0pt;line-height:
115%;font-family:">COVER STORY</span></span></p>
<p class="Pa9" style="text-align:justify">
	<span class="A13"><span style="font-size:
59.0pt;color:windowtext">T</span></span><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">he total households receiving remittances in Nepal stood at 55.8 per cent in the year 2010-11 as revealed by the findings of Nepal Living Standards Survey (NLSS)- III released by the Central Bureau of Statistics (CBS). This is a sharp rise from the year 2003-04 when only 31.9 per cent households in Nepal received remittances. Another remarkable statistic in the report was the 18 per cent decline in absolute poverty in the six years between 2003-04 and 2009- 10. According to the report, only 13 per cent Nepalis now remain below the absolute poverty line (the benchmark being 2,200-calorie intake per day per person). Nepal ranks sixth among the countries in terms of Remittances-to- GDP ratio as stated in the World Bank Report-2011. It rose from Rs 47.5 billion in 2001-02 to Rs 231.73 billion in 2009- 10. Remittances-to-GDP ratio almost doubled from 10.3 per cent in 2001-02 to 19.6 per cent in 2009-10. Economists estimate that this figure will rise to 20 per cent in 2012-2014. <br />
	</span></p>
<p class="Pa10" style="text-align:justify">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">It is estimated that approximately 2.2 million Nepalis are working as migrant workers in various countries. Nearly 90 per cent of migrant workers have found employment in Qatar, Malaysia, Saudi Arabia, the UAE, and Kuwait. Among them, 10 per cent of migrant labors are female. According to Bal Bahadur Tamang, the President of Foreign Employment Association of Nepal, the growing construction business in the Gulf countries has created a demand for large number of Nepali workers. “Qatar is hosting a showpiece World Cup Football tournament in 2022 and therefore, the amount of construction work happening there has increased the demand of Nepali workers substantially,” informed Tamang. <br />
	<br />
	Increasing remittance flow has emerged as a favored poverty alleviation strategy in developing countries, particularly in Nepal. Policymakers believe that the financial contribution from migrant workers has provided impetus to development activities. They also opine that the scope of such revenue should be further enhanced. Nara Bahadur Thapa, Chief Manager of Nepal Rastra Bank at Biratnagar said, “The robust relationship between the growth in remittance and the reduction in poverty has evolved on account of a significant growth in the number of rural poor people seeking jobs in the Gulf countries.” </span></p>
<p class="Pa10" style="text-align:justify">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">“Annually, Nepal is receiving Rs 200 billion as remittance,” shared Dr Ganesh Gurung, a Remittance Economist. Based on the data of the Department of Foreign Employment, 1,500 people leave the country for foreign employment every day on an average as of August 2011. Quite naturally, the country has also been receiving proportional amount of remittances from these migrant workers employed abroad. From mid-July to mid-August 2011, the number of Nepalis going abroad for jobs was 45,165. This heavy reliance on foreign employment has shifted the Nepali economy from an agriculture-based economy towards a remittance-based one. </span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">The NLSS, 2010-11 reported that the common Nepalis’ access to basic facilities has improved over the years. Despite political upheavals and unrest, the average household income of Nepalis has increased by more than four-fold to Rs 202,374 over the span of 15 years due to increased receipt of remittances. Thapa shared that the remittance thus received is widely spent on daily consumption, followed by loan repayment and household property instead of capital formation. A Nepal Rastra Bank (NRB) report says that 78.9 per cent of the remittance is used on daily consumption, whereas 7.1 per cent of the remittance is used to repay loans followed by 4.5 per cent on household property, 3.5 per cent on education and only a minimal 2.4 per cent is used for capital formation. According to Dr Gurung, the increased remittance per household has not only increased consumption pattern but changed the social structure too. The nominal per capita consumption expenditure in aggregate increased from Rs 15,848 in 2003-04 to Rs 34,829 in 2010, at an annual average growth rate of 14 per cent. The survey also identified urban hills (9 per cent) and Kathmandu (11 per cent) having the least poor population while the highest population identified as poor live in the mountains (42 per cent) and rural hills in the Mid and Far-West regions (37 per cent).</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">According to Tamang, a significant chunk of the money received via remittance is being spent on imports and real estate instead of it being invested in productive sectors. The main challenge does not lie in receiving remittance but in channelizing it into productive use. Therefore, remittance should be included in the national development agenda to monitor its use. Though the government has given permission to manpower agencies to open foreign currency account in Nepali commercial banks, the government’s responsibility does not end here. Apart from monitoring and facilitating the use of this income, the government should encourage migrants to hold their income in financial assets within the country rather than abroad.</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">“Income received from remittance source has become an automatic instrument for poverty reduction in Nepal as both the government and the private sector have failed to create adequate number of jobs,” said Thapa. If we compare the domestic savings-to- GDP ratio, which is currently around 10 per cent, and national savings-to- GDP ratio standing at 36.7 per cent, the difference is largely due to remittance. Against the national savings-to-GDP ratio at 36.7 per cent, the total fixed investment-to-GDP ratio is 19.6 per cent, reflecting the failure of Nepali society to make productive use of remittance driven national savings. As of mid-June 2012, foreign exchange stood at Rs 427 billion, sufficient <span style="mso-spacerun:yes">&nbsp;</span>nough to <span style="mso-spacerun:yes">&nbsp;</span>cover merchandise and services import of around 10 months. This reflects two things. First, remittance is an important source of foreign exchange earnings, underpinning macroeconomic stability of Nepal. <br />
	</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">Second, the magnitude of foreign exchange indicates that both the government and the private sector have failed to make productive use of foreign exchange accumulated from remittance. Gurung opines that there is no question of utilising remittance for income generating activities for families living below the poverty line. In their case, remittance will take care of consumption. However, the families managing to save out of remittance can be encouraged to invest in income generating activities that could be an issue of micro management of remittance. Similarly, families engaged in agricultural activities and receiving remittance in excess of their consumption requirements should be encouraged to invest in high yielding crops and animal husbandry. This will help boost the agricultural production and consequently, their incomes. <br />
	</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">On the other hand, families residing in urban and semi-urban areas should be encouraged to invest in small services such as tailoring, taxi driving and undertaking petty businesses. For this to happen, the government can help establish multipurpose urban cooperatives. Lila Prasad Sitaula, Executive Director at Foreign Exchange Management Department of Nepal Rastra Bank, said, “The government, together with the NRB has introduced few important policies to utilize remittance productively. One of those is the issuance of remittance bond targeting migrant workers. Along with it, the NRB is formulating a policy to encourage banks and financial institutions for opening up branches in the rural areas, thus, bringing money in the banking system and channelize it in the productive sector. Furthermore, some provisions have been made to allow remittance companies to manage their forex balance in a more profitable manner, added Sitaula.</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">The government also started issuing foreign employment bond for mobilizing funds and making productive use of remittance since 2009-10 but so far, it has failed to gain popularity among the Nepali migrant workers abroad. According to Chandra Dhakal, Chairman of Nepal Remitters’ Association, remittance is the major factor in improving Nepal’s position in Human Development Index and improving poverty level. Remittance has played a major role in improving livelihood of millions of Nepalis. It has helped people have better access to health, education and sanitation. Dhakal added that the time has come to think about the productive investment of remittance for economic development of the country because capital has been a major constraint. <br style="mso-special-character:line-break" />
	<br style="mso-special-character:line-break" />
	</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">&nbsp;The Monetary Policy of 2012-13 has encouraged and facilitated those companies wishing to establish remittance business in various regions and countries. “We have realized the need for further expanding money transfer agencies to the countries where the supply of remitting service is few or not in existence,” shared Sitaula. Additionally, necessary bylaws have been introduced governing money transfer business activities. The government should prepare proper plans and policies in order to encourage the migrant workers to use formal channels instead of using illegal channels like ‘hundi’. Besides, the government should support the recruitment agencies in receiving recruitment charges, visa charges etc through proper banking channels which should automatically reduce the use of illegal banking channels.</span><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:"><br />
	<br />
	International Money Express (IME) was the first Nepali financial institution starting its services to control the flow of remittance through banking channel twelve years ago. And since the last few years, commercial banks through their representatives and agents have also been involving in money remitting business. As per a recent report of central bank, the total remittance for the first 11 month of FY 2011-12 stood at Rs 320.38 billion showing a growth of 39.6 per cent compared to a growth of 10.1 per cent during the corresponding period of the previous year. Dhakal said, “Though we don’t have any data related to remittance coming through remittance companies, we can estimate that more than 70 per cent of it is channeled through remittance companies.” According to him, remittance companies are doing their best in increasing their network and enhancing their service to bring more remittances through formal channels. The central bank and the government should cooperate and facilitate remittance companies in this noble endeavor, he said.</span> <span myriad="" style="font-size:10.0pt;mso-bidi-font-family:"><br />
	<br />
	“Commercial banks are coming into this business and making it more competitive, however, there is a huge misunderstanding in the scope of work for remittance companies and commercial,” said Dhakal. The present policies have been formulated on the assumption that remittance companies will bring the foreign currency and sell it to commercial banks so that both will be benefited. It is an irony that remittance companies are compelled to sell foreign currency to commercial banks, with whom they are competing at source. Since there is huge disparity in facilities available to remittance companies and commercial banks in terms of foreign currency, the central bank needs to review its policy to ensure sustainability of remittance companies, which are playing an instrumental role in Nepal’s inward remittance. On the other hand, the comfortable reserve position in the country leads to sufficient liquidity in the banking system that is being channelized into productive sectors. Moreover, the increase of foreign exchange reserves allows moving towards gradual liberalization of foreign exchange market.</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">“Preserving the value of foreign exchange is the main concern of the NRB,” said Sitaula. According to him, the central bank has been managing its foreign currency assets keeping it in major international currencies and different asset portfolios in accordance with the principle of portfolio diversification and minimizing currency risk. “A chunk of reserves is invested in highly liquid securities especially sovereign bonds and rest is placed with foreign central banks, BIS and different highly rated foreign commercial banks based on the ratings of international rating agencies such as Standard &amp; Poor’s and Moody’s,” shared Sitaula. While safety and liquidity constitute the main objectives of reserve management in Nepal, return optimization becomes an embedded strategy within this framework, he added.</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">Remittance increases foreign currency availability in the domestic market and raises national savings. Availability of foreign currency, in turn, facilitates financing of essential import and can avert possible balance of payments (BoP) crisis. Despite the rising trade deficit, Nepal witnessed a record current account as well as BoP surplus in the last year because of substantial flow of remittances. Had remittance flows stagnated last year, Nepal would have witnessed deficit in the current account and lesser BoP surplus, said Sitaula. Remittances alone can finance about 90 percent of merchandise trade deficit of the country.</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">These facts reveal a crucial role remittances play in attaining macroeconomic stability in the country. Though increasing remittance has its own advantages, it is also true that over dependency on it in the end will eventually lead to economic failure if the flow of remittance is disrupted. “Of course, nothing would be better than bringing development projects with sufficient funding to utilize the labor force in Nepal itself. For this, the long-term focus ought to be the development of entrepreneurial capabilities of the Nepalis so that remittances could be turned into productive investment that brings higher growth and employment generation,” said Gurung.</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">However, having said that, remittance has been the only hope in recent times to rescue the faltering economy from the low-level equilibrium trap when the implementation of capital expenditure programme is likely to go on a wild goose chase. Remittance has been imperative for survival, poverty reduction, and eliminating impoverished condition of life in the country. At the same time, the government has to resolve these problems, as remittance is one of the growing and most crucial sectors of the economy.</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">&nbsp;</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">&nbsp;</span></p>
<p class="Pa1">
	<span class="A8"><span style="font-size:24.0pt;color:windowtext">COVER STORY</span></span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">&nbsp;</span></p>
<p class="MsoNormal">
	<span class="A49"><span myriad="" style="font-size:23.0pt;line-height:
115%;font-family:">‘Remittances can have Long-term Impact if Channeled into Productive Investment’<br />
	<br />
	<br />
	<img alt="ganesh gurung" border="1" height="313" hspace="5" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/ganesh-gurung.jpg" vspace="5" width="300" /><br />
	</span></span></p>
<p class="Pa1">
	<span style="font-size:16px;"><span class="A5"><span style="color: windowtext;">DR GANESH GURUNG </span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:16px;"><span class="A5"><span color:="" style="line-height: 115%; font-family: ">&nbsp;Remittance Economist</span></span></span></p>
<p class="MsoNormal">
	<strong><span style="font-size:16px;"><strong>&nbsp;</strong><br />
	&nbsp;</span></strong></p>
<p class="Pa23" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">How do you view the contribution of remittance to the reduction of poverty in Nepal?</span></strong></p>
<p class="Pa10" style="text-align:justify">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">This, in fact, is an interesting aspect. The post conflict political situation has not witnessed major economic growth and hence unemployment and underemployment is an ever growing phenomenon. The political unrest decelerated the pace of industrial expansion and halted plenty of small and medium enterprises all over the country creating unemployment throughout the country. In that situation, a huge number of migrant workers amplified the number because of which, foreign employment became an emerging business in Nepal’s context. </span></p>
<p class="Pa10" style="text-align:justify">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">In my opinion, remittance has played a vital role in poverty reduction. Various reports and planning documents published in recent times have attributed the dramatic fall in absolute poverty to the inflow of remittances in Nepal. The percentage of all households receiving remittances in Nepal during the year 2010/11 was 55.8 per cent. This is a sharp rise from the year 2003/04 when it stood at 31.9 per cent. There has been an 18 per cent decline in absolute poverty in the six years between 2003/04 and 2009/10. Therefore, according to me, foreign employment is a major economic phenomenon in Nepal and its relation to the economic growth of the country is integral. </span></p>
<p class="MsoNormal">
	 </p>
<p class="Pa23" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">What is the trend of use of remittance in Nepal in general households? What is the ratio of its use in productive and unproductive sectors? How do you analyze such trends? </span></strong></p>
<p class="Pa10" style="text-align:justify;text-indent:14.0pt">
	<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">I believe that there are also some long-term opportunities brought about by foreign employment. Children of the foreign employment workers are getting quality education paid for by the remittances from their parents. The nation can benefit in the long term out of this trend as skilled and educated manpower is produced for the economy.<br />
	<br />
	The remittance sent by the migrant workers can be used to further generate wealth in the country. Besides spending on consumption, it has to be invested in productive sectors, which would bring about some positive change on the major macroeconomic variables of the country. Remittances can produce long term impact only if it is channeled into productive investment. Going by the current trends of consumption in Nepal, if the remittances are soaked up by consumption only and are not turned into investments, the short term boost provided by it in the economy will not be sustainable. Productivity will decline and the economic choices get tougher if the situation is not addressed in time and is stalled being shortly content with the remittance-based income. More remittance money is spent on consumption than in any other aspects. Only 2.4 per cent of remittance money is spent for capital formation in our country.</span> <span myriad="" style="font-size:10.0pt;mso-bidi-font-family:"><br />
	<br />
	Due to increase in revenues from remittances, the currency of a country becomes stronger compared to that of other nations resulting in exports becoming more expensive for other countries to buy. This can make the manufacturing sector less competitive. Thus, with the increase in the purchasing capacity of households receiving remittance, there is high demand of consumption and imported goods. There has been an appreciation of real exchange rate due to rise in the price of non-tradable with respect to tradable. Furthermore, there has been an erosion of manufacturing sector entailing to their reduced competitiveness. </span></p>
<p class="MsoNormal">
	 </p>
<p class="MsoNormal">
	 </p>
<p class="MsoNormal">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">How do you compare the remittance figures between today and five years ago?</span></strong></p>
<p class="Pa10" style="text-align:justify;text-indent:14.0pt">
	<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">Despite the huge contribution of remittance to GDP, Nepal’s economic growth rate has never exceeded 4 per cent except in 2005 although the indication is that remittance will go up in the years to come. A remittance share of 20 per cent of the total GDP should have created enough employment opportunities, but the unemployment rate still stands at 42 per cent. Furthermore, there appears to be an inversely proportional relationship between employment abroad and industrial growth. For instance, industrial production growth rate was only 1.8 per cent in 2011 whereas from 2002 to 2005, the growth rate was 8.7 per cent when remittance inflow was far less. In this ratio, the remittance pattern is in the increasing trend if we compare the figures of 2010/11 and 2004/05. However, the challenge is to channelize the remittance in productive sector. </span></p>
<p class="MsoNormal">
	 </p>
<p class="MsoNormal">
	<strong>&nbsp;</strong></p>
<p class="Pa23" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">What is the contribution of remittance in GDP? </span></strong></p>
<p class="Pa23" style="margin-top:5.0pt;text-align:justify">
	 </p>
<p class="Pa10" style="text-align:justify">
	&nbsp;<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">It is estimated that the number of Nepali migrant workers is officially 1.4 million and the number of undocumented migrant workers is estimated to be the same. Annually, Nepal is receiving Rs 200 billion as remittance and its contribution to GDP is about 20 per cent. According to World Bank report - 2011, Nepal ranks sixth among countries in whose GDP remittance holds a very high share. It rose from Rs 47.5 billion in 2001/02 to Rs 231.73 billion in 2009/10. Remittance-to-GDP ratio almost doubled from 10.3 per cent in 2001/02 to 19.6 per cent in 2009/10. Therefore, we can say that there has been a positive impact of remittance in GDP. </span></p>
<p class="MsoNormal">
	 </p>
<p class="Pa23" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">How successful has the state become to utilize the remittance income in the development activities? </span></strong></p>
<p class="Pa10" style="text-align:justify">
	<strong>&nbsp;</strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">It is rather disappointing that the state has not been able to utilize the remittance to the optimal level. Very less has been done in this aspect. With a huge number of migrant workers working across the globe, remittances are emerging as a new way for alleviating poverty in the developing and least developed countries. </span></p>
<p class="Pa10" style="text-align:justify">
	&nbsp;<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">Due to unhealthy investment environment in the home country, remittance money has not been used productively which has made Nepal a consumption oriented economy rather than an investment oriented one. This has slowed the pace of development activities in the country. Presently, 78.9 per cent of remittance money is used for daily consumption while only 2.4 per cent is being used in the productive sector. So, the government should create an investment friendly environment in order to use the remittance money in the productive sector. </span></p>
<p class="Pa10" style="text-align:justify">
	&nbsp;<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">In my opinion, the migrant workers should be trained and well informed about what they can do with the money they earn at destination countries. The recruiting agencies should take them in confidence that even after they return to their country, they could have a secure future. Different plans and policies have to be made to create investment friendly environment for these workers. In addition, proper investment environment in the home country acts as a backup in case of emergencies oversees and even during financial crisis. Similarly, the government should introduce measures to encourage savings among migrant workers and their remittance recipient families. </span></p>
<p class="MsoNormal">
	 </p>
<p class="Pa23" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">What is your vision to utilize the expertise of the private sector as well as the state to utilize the earning from remittance? </span></strong></p>
<p class="Pa10" style="text-align:justify;text-indent:14.0pt">
	<strong>&nbsp;</strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">Private sector has a great role to play here. They are the ones who should be making attractive and feasible business ventures that are appropriate for migrants. Migrant workers do not know about the viable projects where their money can be invested. Therefore, in collaboration with these migrant workers, the private sector should establish business ventures that are not only viable but also fulfill the need of the country. Thus, both will have a win-win situation.<br />
	<br />
	People recruited for foreign must be provided several types of training that can enhance their productivity to get better jobs. Proper trainings should be provided to these workers to gain required skills in the destination country. Another major area where private companies are key players is the remittance receiving procedures. There are dozens of private money transfer companies that are providing the service and transferring money through legal and formal channels. The spread of such private services to even the rural areas of the country suggests increasing demand for their services and profitability potential. </span></p>
<p class="MsoNormal">
	&nbsp; <br />
	 </p>
<p class="Pa23" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">What is the situation of Labor Desk and Welfare Fund in the present situation? Is there enough transparency? <br />
	<br />
	</span></strong></p>
<p class="Pa10" style="text-align:justify;text-indent:14.0pt">
	<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">The Labor Desk has acted more as an extended bureaucracy on the part of the government. The Welfare Fund has collected Rs one billion as of September 2011. However, no significant work has been accomplished to properly utilize this amount. There is less transparency regarding the fund collected thus far. In my opinion, the fund should be utilized to provide trainings, skill-enhancing workshops, and information required for foreign employment. This way, the migrant workers will be well equipped with required skills and well informed about the destination country. This will automatically minimize the risk of the labors being cheated or discriminated at the host nation. </span></p>
<p class="MsoNormal">
	<strong>&nbsp;</strong></p>
<p class="MsoNormal">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">What is the contribution of remittance in Balance of Payments?</span>&nbsp; <br />
	</strong></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">Nepal was compelled to borrow $42.5 million from the International Monetary Fund under its rapid credit facility to address BoP deficit one-and-a-half years ago. However, the acceleration in the growth of remittance along with the improvement in the service account has helped maintain a comfortable balance of payments (BoP) situation. After remaining in deficit for two years, the country’s BoP turned surplus in the second last month of the last fiscal year and has continued to grow since. In the same period last year, the BoP had recorded a deficit of Rs 5.72 billion.</span></p>
<p class="MsoNormal">
	<strong>&nbsp;</strong></p>
<p class="MsoNormal">
	<strong><strong>&nbsp;</strong></strong></p>
<p class="Pa23" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">An initiative of the government-foreign employment bond has said to have failed miserably. How can such initiatives be made successful?</span></strong></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">In my opinion, it is necessary to create a mechanism that provides incentives to the stakeholders so that they are keen to sell on the one hand and on the other, interest rate and other facilities given are not attractive for the migrant workers. Thus, the government should make the bond an attractive package and provide them some more incentive so that it is comparatively profitable for them to buy.</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">Foreign employment bond is one of the key instruments that the government has adopted to raise internal loans. However, lack of awareness and complicated procedures are responsible for the low subscription. The first foreign employment bond, issued in fiscal year 2009-10 had seen subscription worth Rs 4.6 million of the total issue of Rs one billion at 9.5 per cent interest. Likewise, last year too, bonds worth only Rs four million of the total issue worth Rs five billion were sold.</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">The repetitive failure of the bond to attract enough investment from the migrant worker community has been attributed to the absence of proper marketing channels. The failure of the last two batches had got NRB to look into diverse markets allowing even Non Resident Nepalis (NRN) and returnee migrant workers to purchase the bond instead of only focusing on migrant workers in the Gulf countries and Malaysia. The layman is missing out on booking good returns by investing in bonds due to lack of awareness about investing in government securities.</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">&nbsp;</span></p>
<p class="Pa1">
	<span class="A8"><span style="font-size:24.0pt;color:windowtext">COVER STORY</span></span></p>
<p class="Pa1">
	<span class="A8"><span style="font-size:24.0pt;color:windowtext"><span style="mso-spacerun:yes">&nbsp;<br />
	<img alt="bala bahadur tamang" border="1" height="293" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/BAL-BAHADUR-TAMANG.jpg" vspace="10" width="300" /></span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:18px;"><span class="A5"><span color:="" style="line-height: 115%; font-family: ">BAL BAHADUR TAMANG <br />
	President <br />
	Foreign Employment Association</span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:18px;"><span class="A5"><span style="line-height: 115%; font-family: ">&nbsp;</span></span></span></p>
<p class="MsoNormal">
	<span class="A5"><span myriad="" style="font-size:10.0pt;line-height:
115%;font-family:">&nbsp;</span></span></p>
<p class="MsoNormal">
	<strong><span class="A5"><span myriad="" style="font-size:10.0pt;line-height:
115%;font-family:">&nbsp;</span></span></strong></p>
<p class="Pa23" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">Which are the countries currently demanding Nepali labors on a big scale? What kind of wages do these migrant workers earn abroad? </span></strong></p>
<p class="MsoNormal">
	<strong>&nbsp;</strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">Most of the world’s estimated 150 million migrants are people searching for improved economic opportunities abroad. Nepal has not been able to escape this phenomenon either. Economic migration to the Middle East from countries in South Asia and other parts of the world was spurred-on by the oil boom in the early 1970s. The reasons behind the migration to the Gulf countries are almost same in Nepal as other parts of the world. Foreign labor migration has developed in such a way over the decades that it has shifted Nepal’s agricultural-based economy towards a remittance based one.</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">Nepalis labors are demanded mostly in countries like Malaysia, Dubai, Saudi Arabia and Qatar. Most of the Nepali labors ranging from unskilled, semi-skilled and skilled are equally opting to receive foreign employment to these countries. The minimal wage rate for unskilled labor is 800, semi-skilled is 1,000 and for skilled labor is 1,200 Saudi Riyal. Apart from it, some European countries are also demanding skilled Nepali labors. However, the Middle East nations stand above in this aspect.</span></p>
<p class="MsoNormal">
	<strong>&nbsp;</strong></p>
<p class="Pa23" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">Why is it that the Nepali manpower agencies have not been able to send skilled manpower to the developed countries? How can this problem be resolved? </span></strong></p>
<p class="MsoNormal">
	<strong>&nbsp;</strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">There is a demand of skilled workers in the international labor market. However, there is a vast difference while comparing the educational and technical standards of Nepali labors with those of the other countries. It is believed that Nepali workers are accepted in East and South Asia as well as the Gulf countries only because they come cheap and do whatever job is given to them. They lack required technical skills which makes it difficult for them to get visas for recruitment in the developed nations.</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">I strongly believe that the government should improve the curriculum in schools so that it can provide more practice-based knowledge. Apart from it, the government should also conduct consultation meetings with the experts, occupational groups, trade unions and foreign employment enterprises to make rules and regulations for the promotion and management of foreign employment occupation.</span></p>
<p class="MsoNormal">
	 </p>
<p class="MsoNormal">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">How do you view the conduct of manpower agencies operating in Nepal? What are the measures that your association is initiating to give this industry more credibility?&nbsp;&nbsp; </span></strong><br />
	<br />
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">The main objective of the association is to monitor the manpower agencies providing foreign employment services, for their efficacy and transparency. We are working to make foreign employment business safe, well managed and decent as well as protect the rights and interests of the foreign bound workers and foreign employment entrepreneurs. There are many incidences of fake employment contracts, visas and forged documents etc. The result is that many Nepalis become stranded in foreign countries or are deported from these destinations where they go for work.</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">A large number of unlicensed agencies exist in the manpower market in Nepal today. Estimates suggest that more than 200 unlicensed agencies are clandestinely involved in this business and bypass all official channels. For example, there are some manpower agencies charging more than Rs 2-3 lakhs per person for a position of manual labor in the Gulf countries or Malaysia. However, the actual cost should be much less. The association is closely monitoring the manpower agencies to make them follow the code and conduct of FEA. <br />
	</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">A high-level advisory committee with the participation of the Ministries of Labor and Finance, the National Planning Commission and foreign employment organizations should jointly work, in order to expand foreign employment opportunities and increment the reliability of agents. The association is preparing a draft of proposal concerning the trainings that is to be provided to the workers seeking foreign employment opportunities in the days ahead.</span></p>
<p class="MsoNormal">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">How can ‘Hundi’ transaction be controlled? Why have manpower agencies not been able to encourage the migrant workers to use formal channels for remittance flow?</span></strong></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">Remittance is one of the important sources of income. The contribution of remittance on Gross National Product is 23.6 per cent. In some cases, it seems that the process of remittance is lengthy and costly. The government should prepare proper plans and policies in order to encourage the migrant workers to use formal channels for remittance purpose. It should provide orientation classes and distribute booklets mentioning the disadvantages of using illegal banking channels like hundi, for instance. The government should also support the recruitment agencies in receiving recruitment charges, visa charges etc through proper banking channels and thereby automatically reduce the use of illegal banking channels. Currently, about 25 per cent of remittance flow is being carried out through hundi. The only way we can control hundi transactions is through easy banking access and close monitoring.</span></p>
<p class="MsoNormal">
	 </p>
<p class="MsoNormal">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">What is your suggestion to direct the inflow of remittance exclusively from banking channels?</span></strong></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">We have to make the migrant workers understand that huge amounts can be invested in micro, technological and small and medium enterprises. This not only generates employment opportunities, but also stimulates demand for goods and services leading to increment in household income and acquisition of real estate. We can do this by providing trainings to migrant workers before they leave for their destination countries. We have to make them realize that their money would be invested in securing their future and they would have a stake in government projects. It will definitely encourage them to use the formal channels of remittance flow. Apart from it, the easy mechanism for remittance flow through banking channel has to be set up accordingly. Only then, the migrant workers would be encouraged to use the banking channel to send their money to Nepal.</span><br />
	<br />
	 </p>
<p class="MsoNormal">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">How do you think the families back in Nepal are utilizing the money received from migrant workers?</span> <br />
	</strong></p>
<p class="Pa10" style="text-align:justify">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">Instead of the money going to productive sectors, a significant chunk of the remittance is being spent on imports and real estate. Households that owned houses have decreased while those renting houses have increased. The houses of migrant workers have been modernized replacing thatched roof with steel roofs. Access to power has substantially increased too so are the households with safe drinking water, toilets and LPG for cooking. Consumption expenditure on food, housing, and education has increased resulting in a rise in the living standard. However, less money has been invested for capital formation at the macroeconomic level. </span></p>
<p class="MsoNormal">
	 </p>
<p class="MsoNormal">
	<strong>&nbsp;<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">It is said that the Foreign Employment Bond issued by the government has failed due to the uncooperative behaviors of manpower agencies. What is your take on it? What is your suggestion to best utilize the remittances sent by the migrant workers?</span><br />
	</strong></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">It is very unfair to say that manpower agencies have shown uncooperative behavior regarding the Foreign Employment Bond. Actually, there has not been enough publicity of the bond to the migrant workers. Besides, the migrant workers do not have much purchasing power as they have many financial obligations that need to be fulfilled with limited income.</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">As of now, remittance is being used in unproductive areas like building houses and other unnecessary products. It would be much better if remittance could be used in productive sector like education, hydro power etc.</span></p>
<p class="MsoNormal">
	<strong>&nbsp;</strong></p>
<p class="Pa23" style="margin-top:5.0pt;text-align:justify">
	<strong>&nbsp;<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">The welfare fund has collected around Rs one billion as of September 2011 but it has not been utilized or any productive work. What are the necessary steps that can be taken to properly utilize this amount?</span></strong></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">According to the Foreign Employment Act 2064 BS, the Foreign Employment Promotion Board is expected to use the amount collected under the Welfare Fund, in conducting foreign employment awareness programs in 72 districts. I, being a member of the said board, raise these issues to the government to address the problems faced by the migrant workers.</span></p>
<p class="Pa10" style="text-align:justify">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">In my opinion, the board has to provide loans with minimum interest to those working abroad. If their families who are in Nepal get loans, there is a good chance that they will invest such amount in the p</span></p>',
			'published' => true,
			'created' => '2012-10-10',
			'modified' => '2012-10-31',
			'keywords' => '',
			'description' => 'Income received as the Nepali workers’ remittances working abroad has become an automatic instrument for poverty reduction in Nepal. Remittance has been recognized as a key to solve various economic ills afflicting the country. Moreover, it has raised some obvious questions.',
			'sortorder' => '600',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 11 => array(
		'Article' => array(
			'id' => '660',
			'article_category_id' => '40',
			'title' => 'Drug Drive : The Rising Business Pharmaceutical Companies In Nepal',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	<strong>By Sushila Budhathoki <br />
	</strong></p>
<p>
	<strong><br />
	</strong></p>
<p>
	<strong><br />
	</strong></p>
<p>
	<br />
	<span style="font-size:14px;"><strong>Drug Drive : The Rising Business Of Pharmaceutical Companies In Nepal</strong></span></p>
<p>
	 </p>
<p>
	<br />
	<br />
	<img alt="coverstory July 2012" border="1" height="226" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/drugs.jpg" vspace="5" width="400" /><br />
	<br />
	Nepal’s pharmaceutical expense is at par with other South Asian countries, thanks to the increase in the number of pharmaceutical companies and their production. In 2008, the total per capita pharmaceutical expenses was US$ 6.96 while the total amount of pharmaceutical expenses stood at Rs 13.09 billion in Nepal. Mahesh Gorkhali, President of Association of Pharmaceutical Producers Nepal (APPON) says Nepali companies are growing at around 15-20 percent annually. The growth has resulted in around 42 per cent command of the market by Nepali products with strong presence and distribution network of marketers in the rural and remote areas. <br />
	<br />
	<br />
	A ‘Market Study Report on Pharmaceutical Products in Nepal’ conducted in 2011’ depicts the shining business of Nepali pharmaceutical industries. According to the report, Nepal experienced significant growth in medicine production in Asia when the growth rate was 11 per cent globally in the year 2009. Nepal obtained annual growth rate of pharmaceutical products at 19.52 per cent even ahead of India who saw 13 percent growth during the same period. According to the report, the total turnover of Nepali companies was approximately Rs 6.8 billion where the company registering lowest sales turnover was Rs 20 million and the highest at about Rs 600 million. The World Health Organization’s report ‘The World Medicines Situations 2004’ listed Nepal among 84 countries that produced pharmaceutical finished products from imported ingredients whereas India was categorized among 17 countries that had innovative capacity. <br />
	<br />
	<br />
	Pradeep Jung Pandey, President of Lomus Pharmaceutical Pvt Ltd says that Nepali companies are capable of producing some of the segments out of big variants of medicinal products. He adds, “We have the potential of increasing the market share at a fast pace.” Most of the Nepali allopathic medicines are of oral dosage forms of tablets, capsules, liquid, syrup, powder for oral suspension while topical preparation like cream, ointment and lotion are also produced. If vaccines, contraceptives, ARV (Anti Retroviral), large volume drugs and few others are excluded, Nepali companies tend to acquire big market share, say experts. Radha Raman Prasad, Director General and Chief Drug Administrator at Department of Drug Administration (DDA) states that medicines can be imported like other goods from the global market. “When the market is dictated by the Nepali industries, the foreign companies that cannot compete will automatically exit,” he says. <br />
	<br />
	<strong><br />
	Demand, Supply and Investment <br />
	</strong><br />
	<br />
	<img alt="" border="1" height="228" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/drugs1.jpg" vspace="5" width="300" /><br />
	<br />
	Demand of Allopathic medicines is high in Nepal. There are altogether 45 Nepali companies operating in the market with 4,677 brands and thousands of products. According to the market study 2011, public expense on pharmaceuticals was Rs 2.96 billion in the year 2008. Similarly, total private expense on pharmaceutical products was Rs 10.06 billion. <br />
	<br />
	<br />
	The size of Nepali medicine market is estimated at Rs 18 billion and the Nepali companies command 42 per cent market share. Manufacturing of oral antimicrobials like penicillin, β-lactam, Non penicillin, antifungals, anthelminthic and antiviral (Simplex) is common while some are engaged in producing non-steroid pain killers, nutritional supplements, enzymes, haematinics, oral steroids, cardiovascular (heart and blood pressure), diabetes, psychiatry (mental disorder) etc. <br />
	<br />
	<br />
	Many Nepali and foreign companies are importing and supplying pharmaceutical products. Their role is significant for fulfilling the demand of various kinds of medicines in Nepal. According to DDA, 257 foreign pharmaceutical companies acquired licenses to sell their allopathic medicines in the year 2067/68. Similarly, 11,769 medicines are registered with DDA including 7,092 foreign and 4,677 Nepali products. There are altogether 1,544 wholesalers and 8,110 retailers throughout the country. <br />
	<br />
	<br />
	The estimated investment in the pharmaceutical industry of Nepal is around Rs 735 million to Rs 1.47 billion. Mahesh Gorkhali, President of Association of Pharmaceutical Producers Nepal (APPON), explores the need of high investment for the establishment of a pharmaceutical Company. He says, “For a good company mainly producing tablets, capsules and liquids, around Rs 25-30 million is required as an investment depending upon the choice of machinery equipments, building, location etc. Establishing an industry in city areas is usually costlier than in the terai or hilly regions.” Nepali industries are not API (Actual Pharmaceutical Ingredients) manufacturers; they import raw materials from other countries. The cost of the raw materials is also increasing investment in the pharmaceutical industries. <br />
	<br />
	<br />
	<strong>Emerging Pharmaceuticals <br />
	</strong><br />
	The number of Nepali allopathic companies has reached 58, according to the DDA. Altogether, 11 new allopathic companies have been registered in the FY 2068/69 whereas only two allopathic companies were registered in the previous year. A number of pharmaceutical companies have been established in different districts like Dang, Bharatpur, Sunsari, Jhapa, Bhaktapur, Kathmandu, Nawalparasi, Birgunj, Lalitpur, Bara and Parsa with investment of billions of rupees (see table). According to the DDA, pharmaceutical companies registered in the FY 2068/69 have proposed a total investment of 1.83 billion Rupees including investment from both herbal and allopathic companies. <br />
	<br />
	<br />
	<strong>Job Destination <br />
	</strong><br />
	<img alt="" border="1" height="220" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/drugs3.jpg" vspace="5" width="300" /><br />
	<br />
	<br />
	Pharmaceutical business has employed thousands of people in pharmaceutical production, distribution and marketing. There are 4,200 medical representatives, 2,474 pharmacists and more than 13,000 professionals employed with various pharmaceutical companies. Regular human resource like managers, accountants, computer operators, receptionist, cleaners, drivers, kitchencrew, HR and admin officers also find work with these organisations. Pharmaceutical companies also provide internship to hundreds of students every year who are mostly recruited in the very companies at a later stage. Sanju Acharya, Administrative Assistant at Nepal Pharmacy Council, opines that there is a huge demand of pharmacy graduates in the pharmaceutical sector. Pharmacy professionals are of two categories; those who have graduated in Pharmacy and above up to PhD level and the ones who complete three year Diploma in Pharmacy under the Council for Technical Education and Vocational Training-CTEVT program. Pharmacy students are highly in demand at Pharmacy colleges as teachers and laboratories and hospitals as researchers or lab assistants. By law, a hospital must own a pharmacy operating 24 hours, which also provides opportunity to these students. Graduates from the Institute of Medicine (IOM) and Kathmandu University are mostly found applying for foreign colleges in search of greener pastures. Having seen the better job opportunities, many colleges have started to include pharmacy as a subject in their curriculum. There are around 16 pharmacy colleges affiliated to Tribhuvan University, Pokhara University and Purbanchal University. Together, they produce pharmacy graduates for the industry with an annual intake of around 600- 650 graduates yearly. Kathmandu University runs B Pharm, M Pharm, Pharm D and PhD programs while CTEVT runs three year Diploma in Pharmacy program at 24 different institutions, with an annual intake of 960 persons. The undergraduates are mostly utilized in community pharmacies. <br />
	<br />
	<br />
	<strong>High Competition <br />
	</strong><br />
	<br />
	The market share of Nepali companies in the urban set up is approximately 20 per cent and the rest 80 per cent in the rural markets. The reason behind this is credited to high competition among Nepali pharmaceutical companies and limited customers or prescribers, in spite of progressive marketing and promotion of the medicines. It clearly depicts that if the share of Nepali products increases in the city areas, their total share in the pharmaceutical market will experience a significant growth ultimately. However, new industry registrations too signal to follow the same trend which industrialists fear would lead to further competition. Government authorities state that the import of large volumes of drugs from other countries is due to the scarcity of varieties of medicines in the market. On the other hand, Industrialists accuse the government of importing many similar products from India which they say is also one of the reasons behind severe competition. Most of the medicines are ‘me too’ products which has compelled high competition between Nepali companies as well as the imported ones. Most pharmaceutical products are related to a particular disease or a group of diseases (therapeutic segment), and are not spread in diverse therapeutic segments. Apart from that, products like Albendazole, Amoxicillin, Azithromycin, Ciprofloxacin, Fluconazole, Paracetamol, Ibuprofen, Hyoscine, Metronidazole, Ofloxacin, etc are manufactured by around 20 to 30 companies. Similarly, around a dozen of companies produce the cardiovascular and diabetes medicines. “There should have been competition on varieties and quality of the medicines but some Nepali companies are desperately competing because of the similar products,” says freelance market researcher Rajan Raut. Similar products from foreign countries find their stand in the market even tougher as some of the Nepali products have even substituted imported products. <br />
	<br />
	<br />
	<img alt="coverstory" border="1" height="771" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/drugs12.jpg" vspace="5" width="400" /><br />
	<br />
	<br />
	<strong>Monitoring and Inspection <br />
	</strong><br />
	<br />
	The DDA – that has 31 staffs which include 13 drug inspectors of different levels – has been facing a hard time in operating effectively. Such a limited manpower is considered a very low number to maintain the growing number of pharmaceutical industries, wholesalers and retailers. With little human resource to speak of, DDA runs different programs like marketing authorization, inspection, import control, licensing, market control, medicine advertisement and promotion, quality control and clinical trial. Quality inspection of medicines including laboratory reagents, surgical items, bandage, sutures, catheters etc are also some areas the DDA has been found lacking at. National Medicine Laboratory is the only public sector laboratory which monitors quality of the medicines through samples collected by the DDA. However, it doesn’t publicize the results publicly. Lack of good distribution practice and storage practice seems a common problem in many places. This is the reason why consumers often complain about consuming outdated medicines or shortage of essential medicines, blood, oxygen etc. Lack of proper monitoring system of pharmaceutical product is feared to grow ineffectiveness. No medicine company is found reporting its medicinal errors. As per the law, up to Rs 300,000 is to be paid by the manufacturer as compensation if medicine causes harm to the consumer. Baburam Bhattarai, President of Nepal Chemist and Druggist Association urges the need of regulating unregistered medical stores because according to him, they contribute towards creating health hazards. He says, “The government monitoring system has not been so effective. Besides, the current political situation is also fostering such business.” There is no specified division or section in DDA for WHO-GMP inspection either. Although the DDA has insisted that it has not found a single case of counterfeit drug, doctors from different districts bordering India fear its presence in the Nepali market. High prices of medicines have always been a controversial issue. DDA has fixed the actual price for up to 10 medicinal products including saline, painkillers and oral dehydrates. Shyam Adhikari, Drug Inspector at the DDA says they are looking at a mechanism to ascertain the prices of Nepal made medicines as well as the imported ones in the coming days. Recently a ‘Price Monitoring Committee’ has been formed with the participation of members from the DDA, pharmaceutical industry and consumers’ representatives. However, the companies insist that they keep the profit margin scientifically with the approval of the Government of Nepal. Pandey points that the Nepali medicines are priced either at par or a little cheaper than those of their Indian counterparts. Citing the example of a paracitamol tablet, he says, “A single unit of citamol tablet costs Rs 2 in Pakistan and India while it costs only one rupee in Nepal.” Pharmaceutical companies do not produce drugs in a large volume neither do they run with full capacity. Nepali pharmaceutical companies are using 20 to 90 per cent of their respective capacities for production and operate about 8 hours daily which is said to be the major reason behind the high production cost of the medicines. <br />
	<br />
	<br />
	<strong>Investment in Research &amp; Development <br />
	</strong><br />
	<br />
	There are only two or three companies that have been producing biological products. Most of the demand of injectables and biological drugs is fulfilled through imports. Essential medicines which require high technology are donated to Nepal by different international aid agencies from abroad. They also provide vaccines for expanded programs of immunization and medicines for the treatment of tuberculosis, leprosy, HIV/AIDS and sexually transmitted infections (STI), malaria, kala-azar and filariasis etc, for free. Nepali companies are producing around 33 per cent of essential medicines mainly producing therapeutic drugs. Industrialists are apprehensive about invest in research &amp; development (R&amp;D) because of the current political instability and law and order situation, say analysts. Most of the Nepali companies have limitations in terms of technical capability and innovation. On the other hand, foreign companies including multinational ventures have access to latest technologies and are engaged in import of medicines. However, there is no technical collaboration between the multinational ventures and Nepali companies. Industrialists too agree that Nepali pharmaceutical companies should conduct varieties of research and fulfil the demand of high tech medicines in Nepal. They accuse the government for not supporting them adequately as R&amp;D requires high investment, manpower and technology. <br />
	<br />
	<br />
	<strong>The Way Forward <br />
	</strong><br />
	<img alt="" border="1" height="200" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/drugs4.jpg" vspace="5" width="300" /><br />
	<br />
	Many Nepali companies are manufacturing high quality products of international standards and fostering the growth of the Nepali medicine market. Zinc tablet, which is useful for treating ringworm disease in children and popular among international companies, is a product of Deurali Janata Pharmaceutical (DJP). Radha Raman Prasad, Director at DDA, seems satisfied with the quality of Nepali pharmaceutical products. He says, “Few samples have been found lacking quality in the market due to some reasons but I think the overall quality of Nepali medicines is at par with international standards.” Experts involved in the business of medicinal products suggest drug producers to work collectively towards exporting Nepali medicines. Prasad admits that export is not just limited to the quality of the drug. He says that every country has some clauses and Nepal can fulfil those clauses. Some of the Nepali companies are even trying to export drugs to Singapore and Malaysia. “We are very rich in resources for pharmaceutical products, all we need is skilled manpower and the technology. Provided these aspects, we have huge potential for export,” he adds. The much awaited National Drug Policy has been drafted by the DDA. According to Prasad, efforts have been made during the preparation of the draft to address the issues of pharmaceutical industries. He says, “The draft focuses on new areas of thrust, in comparison to the previous policy which focused on export. It has a provision of contract manufacturing for technology input, providing incentive for R&amp;D activities, manufacturing, clinical research and attracting foreign countries for R&amp;D.” From a human resource perspective, students who have studied bio pharmacy abroad have started returning to Nepal. This development promises to enable companies to operate various researches. In August 2011, DDA permitted contract manufacturing of pharmaceutical products to the manufacturing contractors owning WHO-GMP certificate and licenses of the products. The Department of Commerce and Supplies and District Administration Offices are conducting inspections on a regular basis to find out sales of expired drugs and also making their findings public. GMP and GLP (Good Laboratory Practice) standards are meant to pave the way for assuring efficacy and quality of the drugs in the international market and are expected to ease the export of the products. Currently, there are 26 companies that are manufacturing pharmaceutical products by maintaining GMP standards. The rest are also in the process of obtaining GMP as the DDA has urged all non-GMP certified companies to come under GMP certification by the end of the year. <br />
	<br />
	<br />
	<img alt="" border="1" height="457" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/drugs_11.jpg" vspace="5" width="401" /><br />
	<br />
	<strong>COVER STORY <br />
	</strong><br />
	<br />
	<strong>‘The Growth of Nepali Pharmaceutical Industries is Quite Appreciable’ <br />
	</strong><br />
	<img alt="" border="1" height="330" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/BABURAM-BHATTARAI.jpg" vspace="5" width="300" /><br />
	<br />
	<strong>BABURAM BHATTARAI <br />
	President <br />
	Nepal Chemist and Druggist Association <br />
	(NCDA) <br />
	<br />
	</strong><br />
	<br />
	<strong>How do you see the growth of Nepali pharmaceutical industries in recent times? <br />
	</strong><br />
	<br />
	The growth of Nepali pharmaceutical industries in recent time is quite appreciable. Around 42 per cent home demand is fulfilled by them so it can be considered satisfactory. I think the Nepali medicines are doing good business because the products are qualitative and the demand is increasing on a regular basis. I see a golden future for Nepali pharmaceutical products. <br />
	<br />
	As far as my knowledge is concerned, the level of consumption for most of the products made in Nepal is satisfactory and so is their supply system. However, most of the companies are producing the same types of medicine which has created unhealthy competition. <br />
	<br />
	<br />
	<strong>How is the production and export-import business of pharmaceutical products in Nepal? <br />
	</strong><br />
	<br />
	The history of allopathic medicine in Nepal is less than 100 years old. Medicine was used with the start of the modern medical system and during that time, pharmacy products were imported from different countries while such services were limited to only the big cities. The situation has changed now and we have many pharmaceutical companies established in our own country. Imported as well as home grown products are available even in the remote areas of the country today. However, it has not been smooth yet and the mishandling and misuse of drugs is a great threat. <br />
	<br />
	<strong><br />
	Counterfeit drugs is said to be one of the biggest challenges faced by the pharmaceutical industry. What is NCDA doing towards it? <br />
	</strong><br />
	<br />
	I agree with this statement to some extent. Basically, there are two reasons behind the availability of counterfeit drugs. The first one is that we share a open border with India and the second is that there are so many unregistered medical stores all over the country. The government monitoring system has not been effective enough. I don’t think that the NCDA member firms are involved in the supply of such medicines. The government should regulate these unregistered medical stores and bring them under the purview of the legal system. NCDA, on its part, is planning to release the list of registered medical stores and products available at these stores, on its website. It is always ready to support government initiatives to control the availability of counterfeit drugs. <br />
	<br />
	<br />
	<strong>Consumers often complain that the medicine prices vary from pharmacy to pharmacy. It is also said that the margin of profit is kept very high in pharmaceutical products. What do you have to say about such practices? <br />
	</strong><br />
	<br />
	I cannot agree with your statements. NCDA was established with the mission to supply qualitative, effective and safe drugs at affordable prices and we are always conscious regarding the uniformity of medicine prices. However, there may be some misuses from unregistered stores despite all our efforts and commitments. NCDA is committed to endorse the sale of medicines at their justified prices. However, if there are any complaints on account of price manipulation, please do inform to any of our NCDA branches so that we can regulate such pharmacies. <br />
	<br />
	<br />
	As for the margin of profit being high in pharmaceutical products, this is nothing but plain rumor. We are keeping the profit margin scientifically with the approval of the Nepal Government. <br />
	<br />
	<br />
	<strong>A great amount of medicines are sold on a daily basis without the doctors’ prescriptions. How risky is this for public health? <br />
	</strong><br />
	<br />
	This is a serious question that you have brought up. We all are quite aware about the health service standards in our country .We have a very limited numbers of doctors and that too, they are available only in the urban areas. Therefore, scores of villagers do not have access to services provided by doctors. This explains the situation of no prescriptions where there are no doctors. You have to acknowledge the fact that the patients have to get medicines anyway. Nowadays, the paramedics (HA, CMA &amp; ANM) are dispensing medicines in the remote areas. The government is not bothered about this problem and many serious health hazards occur due to the state’s apathy towards health services. <br />
	<br />
	<br />
	<strong>The shortage of general medicines in rural areas often inconveniences many families in Nepal. What’s your take on this? <br />
	</strong><br />
	<br />
	Although our business is a service business, there is a profit motive as well. The few pharmacy assistants and professionals that we have in the country confine themselves to the densely populated areas because they want to do good business. However, there are so many remote areas where there is no storage of general medicines but the problem is that the pharmacy dispensers are not available in such areas. I have also repeatedly drawn the attention of the concerned authorities to run orientation training targeting these areas so that the problem of dispensing medicines can be solved to a large extent. <br />
	<br />
	<br />
	<strong>How wealthy are we in terms of human resources especially in the production, marketing and distribution of pharmaceutical products? <br />
	</strong><br />
	<br />
	As far as the availability of human resources is concerned, let me assure you that many pharmacists and pharmacy assistants are produced every year. The number of pharmacy colleges is also increasing. Most of the pharmacists are employed in industries and academics whereas the pharmacy assistants are engaged in dispensaries. But the tragedy is they are not available in the remote areas. <br />
	<br />
	<br />
	<strong>The Nepali pharmaceutical industries asked the government to stop importing Indian drugs sometime ago. Can it be considered reasonable in a liberal market economy? <br />
	</strong><br />
	<br />
	Nepal is a small country in comparison to our neighbors and the market of any product is limited. It is not bad to promote indigenously produced medicines until our economy is competitive enough to export. Billions of rupees have been invested in the pharmaceutical industries. I think it’s the duty of the government to support these companies by whatever means possible. <br />
	<br />
	<br />
	<strong>What is the possibility for exports of Nepali drugs abroad? What are the challenges in this regard? <br />
	</strong><br />
	<br />
	I don’t see any possibility of Nepali medicines for export in the current context. Even though all the companies of Nepal follow the WHO GMP standard, different countries may have different technical standards. The private sector effort to export medicines may not be an effective one. The government initiation is the primary requisite and a must to realize export efforts. <br />
	<br />
	<br />
	<strong>COVER STORY <br />
	<br />
	<br />
	‘The Overall Quality of Nepali Medicines is at Par with International Standards’ <br />
	</strong><br />
	<br />
	<img alt="" border="1" height="330" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/RADHA-RAMAN-PRASAD.jpg" vspace="5" width="300" /><br />
	<br />
	<strong>RADHA RAMAN PRASAD <br />
	Director General <br />
	&amp; Chief Drug Administrator <br />
	Department of Drug Administration <br />
	</strong><br />
	<br />
	<br />
	<strong>How do you see the growth of Nepali pharmaceutical industry in recent times? <br />
	</strong><br />
	<br />
	New industries are entering into the market but most of them are producing ‘me too’ drugs. The competition is heightening among such kind of drugs. The trend of new industry registration shows that producers are willing to produce similar kind of products that already exist in the market. Such a trend is more common than producing vital drugs and competing with imported products which may help reduce imports and market share of imported drugs. Although new industries have taken industry establishment reference letter for producing large volume drugs, further progress is not seen in the actual establishment of industries. It is very important to produce large volume drugs with quality but little progress has been made towards it. Even though producers are promising to do it, it has not happened till date. <br />
	<br />
	<strong><br />
	New industries are being established every year. Do you see potential in them to make the country self sufficient in drugs and reduce imports? <br />
	</strong><br />
	<br />
	It is not that they do not have the capacity to produce to the extent of self sufficiency but it is limited to specific drugs. The environment for producing numerous drugs to the extent of self sufficiency has already been created but not for all medicines. Nepali companies have a market share of 43 per cent. If vaccines, contraceptives, ARV (Anti Retroviral), large volume drugs and few others are excluded, Nepali companies will have a bigger market share. Some companies have an almost equal market position as Indian companies. Ethical promotions and marketing strategies have helped them create a niche in those sectors. Nepali drug industries have their presence in almost every part of the country. <br />
	<br />
	<br />
	<strong>Around 60 per cent of the drugs market is covered by the foreign companies. How can the share of Nepali industries be increased? <br />
	</strong><br />
	<br />
	The consumers of medicines are mostly the prescriber groups. So, the confidence of the doctors and prescribers needs to be won with ethical marketing and by offering qualitative drugs. This will help to increase the market share. However, only over-the-counter sales and promotion through pharmacies cannot deliver good results compared to ethical promotions. <br />
	<br />
	<br />
	<strong>Although imported drugs are said to be expensive than locally produced ones, why aren’t Nepali medicines preferred by the prescribers? How can Nepali products be promoted? <br />
	</strong><br />
	<br />
	It is necessary to look minutely into actual pricing. Some local drugs may be cheaper but it is difficult to say that products from established brands are actually cheaper. Such products are priced similar to the imported drugs. Quality assurance is the most important factor for promoting Nepali industries. Numerous producers and their associations as well as the DDA have moved towards quality assurance through various measures like complying with the WHO GMP standards. All the stakeholders are moving ahead keeping in mind quality as their central motive. It is a matter of satisfaction that Nepali industries are committed to quality assurance and they too are producing international standard drugs. Even though few samples have been found lacking quality in the market due to some reasons, I think the overall quality of Nepali medicines is at par with international standards. Many industries are now shifting to new locations, upgrading their technologies and carrying out renovation of their production units. Once quality is promised to the consumers, the market share will definitely increase. <br />
	<br />
	<br />
	<strong>It is often said that substandard medicines are being imported and expired medicines sold in pharmacies. What is your take on this situation? <br />
	</strong><br />
	<br />
	At times, it’s not only the drugs imported from India but also the Nepali drugs that are found to be below standard. However, we cannot generalise the situation and say that all products lack quality. There have been cases like discovering some particles on tablets and solidified dry syrup but these are exceptions. We have not found the entire batch of a particular medicine failing in case of one or two samples that are found defective. If the temperature is not adjusted as per the requirement during storage, some medicines change colour naturally over time. A pharmaceutical company produces drugs which is transferred to distributors, then to retailers and finally to the consumers. If the quality is not assured in the supply chain, some complications may arise despite the producer maintaining optimum quality. The producers are slowly getting conscious about it and the DDA too is committed to move towards this direction. <br />
	<br />
	<br />
	Regarding the sales of expired drugs, it is very important to maintain a good pharmacy and dispensing practice. The pharmacy workers must properly look at the prescriptions and scrutinise the medicines before selling them and also give proper information to the buyers. When this system is not practiced, there is a chance of expired drugs getting sold. Substandard and expired drugs must be filtered at the time of sales. At present, there are inspections carried out by the Department of Commerce &amp; Supplies and District Administration Offices to detect sales of expired drugs. Such activities have definitely brought a lot of awareness among consumers and also controlled such incidences. <br />
	<br />
	<br />
	<strong>Counterfeit drugs is also said to be one of the biggest challenges faced by the industry. What is DDA doing towards it? <br />
	</strong><br />
	<br />
	We have not found counterfeit drugs as of now. It’s true that we have found some medicines that are not registered here but they are not counterfeit in the true sense of the term. Such unregistered drugs are confined to around four-five types which have high difference in their prices such as Ciprofloxacin, Omeprazole and some aphrodisiac drugs. We have been carrying out awareness campaigns asking customers to mandatorily take bill on the purchase of drugs which will prevent buying of unauthorised drugs. A conscious citizen must as for bill on purchase of medicines and also seek information about the medicines. <br />
	<br />
	<br />
	<strong>What is the level of competition of Nepali pharmaceutical companies among themselves as well as with the foreign companies? <br />
	</strong><br />
	<br />
	The competition has always been there but it should now focus on quality while competing with ‘me too’ drugs in the market. Earlier, cardiac medicines were not produced within Nepal but now we have them. We also did not have the doctors’ confidence about higher antibiotics but now they prefer Nepali products. These are definitely very good signs. We have been monitoring and conducting inspection of Nepali industries, overseeing their quality and standard etc so we encourage using Nepali drugs with confidence. This confidence has also led Nepali industries beginning to tap the foreign market in recent times. <br />
	<br />
	<br />
	<strong>Raw materials as well as finished drugs are being imported at present. Which one is beneficial for our market situation? <br />
	</strong><br />
	<br />
	The Nepali industries are compelled to import raw materials to produce drugs here because we are not API (Actual Pharmaceutical Ingredients) manufacturers. Therefore, it is necessary to import raw materials. In the current global context too, there is no base to deny import of any products. When the market is dictated by the Nepali industries, the foreign companies that cannot compete will automatically exit. <br />
	<br />
	<br />
	If Nepali companies can produce drugs here, the human resource can be rightly utilised. The availability of human resource is cheaper in Nepal than anywhere else. Qualified human resource is being produced within the country and at the same time, semiqualified human resource is equally available. We have a condition to import quality raw materials at competitive prices. It also creates employment not only in the production line but also in the marketing of products. The industries also pay taxes to the state so from that perspective, local industries must be promoted. <br />
	<br />
	<br />
	<strong>It is said that there is huge potential for export of medicines to India along with other markets. How much have we cashed in on this potential? <br />
	</strong><br />
	<br />
	That potential has not been adequately explored as of now. A few industries that have reached a certain level of success in the local market have started looking towards those markets. All the drug producers must collectively move towards this direction to explore the potential. <br />
	<br />
	<br />
	<strong>COVER STORY <br />
	<br />
	</strong><br />
	<strong>‘We have Gained Trust from the Consumers because of our Quality Products’ <br />
	<br />
	<br />
	<img alt="" border="1" height="214" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/MAHESH-GORKHALI.jpg" vspace="5" width="300" /><br />
	<br />
	MAHESH GORKHALI <br />
	President <br />
	Association of Pharmaceutical <br />
	Producers of Nepal (APPON) <br />
	</strong><br />
	<br />
	<br />
	<strong>How do you see the growth of Nepali pharmaceutical industry in recent times? What is the kind of investment required to establish a pharmaceutical industry at present? <br />
	</strong><br />
	<br />
	As per an estimate, we are growing at around 15 to 20 per cent annually. The cost of establishing a pharmaceutical industry in the country generally depends on the number of segments that the investors target to operate with. Pharmaceutical industries cover different segments like – tablets, capsules, liquids, injectables etc. If an industry tries to cover all these segments, high investment is required. At the same time, low investment can enable an industry to operate with a single segment. As per our calculation, anywhere from Rs 25 to 300 million investment is required for a company producing tablets, capsules and liquids depending upon the choice of the machinery equipments, building, location etc. Establishing an industry in city areas is usually costlier when compared to the terai or hilly region. <br />
	<br />
	<br />
	<strong>How is the production and export-import business of pharmaceutical products doing in Nepal? <br />
	</strong><br />
	<br />
	There are altogether 45 Nepali companies operating in our market. Investors generally produce materials which they can sell even if they have a high production. There is a wide variant of medicines available in the market and we are capable of producing some of these, for example, Paracitamol tablets which are popular as citamol in Nepali households. To meet the remaining demand, we import a good amount of medicines from India, Bangladesh and some other countries. The export potential of Nepali medicines has not been tapped as yet. Nepali pharmaceutical companies occupy around 40-45 per cent market share while the rest is of foreign companies. Our companies can increase their market share only if we could expand our businesses massively. If we do not want to be contended only in the national market, we must grow and focus on exports. <br />
	<br />
	<br />
	<strong>How favorable is the government’s policy regarding the pharmaceutical industry? <br />
	</strong><br />
	<br />
	We don’t find a clear-cut policy of government for the development of Nepali pharmaceutical industries. As such, the pharmaceutical market is rapidly growing internationally and we are obliged to introduce and produce newer medicines or molecules to survive in the market. Since we lack manpower in developing newer molecules, we try to import them as soon as they are developed. Department of Drug Administration (DDA) under the Ministry of Health regulates our companies but it usually hesitates to provide a license whenever we apply to import a new molecule. It says that the molecule is not mentioned in Pharmacopeia - a book where every medicine is featured. Actually, medicines are featured in Pharmacopeia sometime later after the invention. It’s the responsibility of the government to either perish or nourish the pharmaceutical sector as the citizens of this country have the right to have proper medications. By permitting to import newer molecules, providing incentives or soft loans and declaring tax holidays for some years will definitely create good environment for the pharmaceutical sector. The government must also act as a responsible body by addressing problems such as the shortage of powerhouse, in consultation with the stake holders. I think that the Ministry of Health has so many responsibilities and hence, they may not be able to look after the manufacturing industries properly. Nonetheless, I believe they will formulate some good policies in the near future to encourage new investors when they realize our potential as a growing industry. <br />
	<br />
	<br />
	<strong>What are the challenges of the Nepali pharmaceutical industry in meeting the demand of pharmaceutical products in the market? <br />
	</strong><br />
	<br />
	Around 250 companies are involved in importing medicines from other countries so the biggest challenge we have is the faith of the consumers on Nepali products. The pharmaceutical market normally grows with the increase in the prescriptions or the number of the prescribers. We have gained that kind of trust from our consumers because of the quality products we deliver. All the leading doctors and medical experts prescribe Nepal made products which means the main challenge is already taken care of. Another challenge is to introduce newer molecules. <br />
	<br />
	<br />
	We need some lab testing which are often tedious, time consuming and expensive. We need to maintain refresh standard for which we don’t have the facilities but that can be procured. Furthermore, we have to develop our human resources including the marketing professionals so we are conducting different trainings and workshops to improve their capabilities. <br />
	<br />
	<br />
	<strong>What is the benefit of importing pharmaceutical products from India? What kind of competition have domestic factories been facing with hundreds of Indian products and companies in the domestic market? <br />
	</strong><br />
	<br />
	While moving from illness to wellness in the case of human health especially, pharmaceutical products have proved to be one of the essential elements in curing diseases. However, we don’t produce all kinds of medicines. For instance, we don’t produce saline water which is considered as an urgent medication for many diseases. We import it mainly from India as medicines such as this are beneficial to human health. <br />
	<br />
	<br />
	Competition between companies is natural in every business and pharmaceutical industries are no exception. Competition with importing companies is ethical in our business. However, there seems to be a fierce competition between the Nepali companies because of similar medicinal products and limited customers. Everybody wants to promote his own brand and the more number of companies, the more number of brands are there. <br />
	<br />
	<br />
	<strong>Although imported drugs are expensive than locally produced ones, why aren’t Nepali medicines prescribed much? <br />
	</strong><br />
	<br />
	This is untrue as majority of the doctors are prescribing our medicines. This is the reason why we are having 40- 45 per cent market share despite having competition from so many foreign companies. There has been a good promotion of our medicines and the doctors prioritize them whenever they prescribe the medicines to the patients. <br />
	<br />
	<br />
	<strong>How wealthy are we in terms of human resources especially in the production, marketing and distribution of pharmaceutical products? <br />
	</strong><br />
	<br />
	Initially, we had a real problem with human resource be it the marketing or production areas. It was very hard to train young graduates especially those without a science background. Thus the promotion of the products used to be a difficult task in the past. <br />
	<br />
	<br />
	In production also, there were not enough graduates who could earlier meet our criteria. However, there are 17 - 18 colleges now with pharmacy as a major subject. They are producing a good number of bachelors every year that can be utilized in pharmaceutical industries. We don’t have scarcity of such manpower now. <br />
	<br />
	<br />
	However, we don’t have quality manpower who could import newer molecules from foreign countries. Good companies have been providing trainings for their employees and sending them to different countries like Japan, Bangladesh and India for their capacity enhancement. They are improving and we hope that we will produce the required manpower for this sector as well. <br />
	<br />
	<br />
	<strong>It is said that the margin of profit is kept very high in pharmaceutical products. What do you have to say about that? <br />
	</strong><br />
	<br />
	Even though it seems so, it is not true. Actually, certain products have really high margins mainly because of the high expenses involved in their production. To produce a single medicine, we import different raw materials including chemicals and packaging materials. Besides, producing quality medicine is a very lengthy and time consuming process. There are other costs involved too which make medicines more expensive, for example, the marketing aspect. Whatever is the margin, the fact is that the product must be sold because without the sale of a product, there can be no profit. <br />
	<br />
	<br />
	<strong>It is said that there is a huge potential for export of medicines to India along with other markets. How much have we cashed in on this potential? <br />
	</strong><br />
	<br />
	Let me give you an example when my company used to export medicines in India a few years ago. We had applied to the Indian authorities for exporting medicines to which they agreed and we started to send our medicines. However, despite having all the certification and documents of our products, they would put our stock in their quarantine office once it reached Raxaul in India. They would say that approval can be provided only after some lab testing but by the time they did so, it would be already six months late. Another three months would be spent for lab testing so it’s only after nine months that we would be able to get the approval to supply our medicines in the Indian market. The same process would apply for each consignment. After all this, the Indian retailers would not agree to keep medicines having less than six months of validity. It continued for two years and we had a business of Rs 50-60 million only. After two years, we could not undergo the criteria once they applied a new system for Nepali companies. It became costlier and that is when we stopped exporting our products. However, we are again targeting India for the expansion of our products and hopefully, we will be successful in our endeavour. <br />
	<br />
	<br />
	<strong>Raw materials as well as finished products are being imported at present. Is it beneficial for our market? <br />
	</strong><br />
	<br />
	Yes, it is. We cannot produce medicines without raw materials and finished products since we don’t have the big plants to produce chemical and other essential materials. We don’t need to produce raw materials ourselves because of the limited market we have. Unless we expand our market, we can continue to import these items. <br />
	<br />
	<br />
	<strong>COVER STORY <br />
	</strong><br />
	<br />
	<strong>‘Maintaining GMP and GLP Standards will give Credibility to our Products Internationally’ <br />
	<br />
	<br />
	<img alt="" border="1" height="204" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/MOHAN-PRASAD-AMATYA.jpg" vspace="5" width="300" /><br />
	<br />
	MOHAN PRASAD AMATYA <br />
	Chief <br />
	National Medicine Laboratory <br />
	<br />
	<br />
	</strong><br />
	<strong>What is the major function of the National Medicine Laboratory? <br />
	</strong><br />
	<br />
	Our main objective is to ensure that safe and effective medicines are available in the Nepali drug market. Though it is the Department of Drug Administration (DDA) that awards license to pharmaceutical factories, it is our responsibility to test and evaluate the standard of their laboratories and drugs and refer them for the registration. Factories should obtain market license for each of their products. We develop Reference Standard and make it available to the pharmaceutical companies and laboratories. We also inspect retail and wholesale pharmacies to check the quality of drugs. The price monitoring of the marketed drugs is within our scope of work and we deploy drug inspectors for this task. They visit the market on a regular basis, purchase drugs from the pharmacies and bring it to us. We inspect quality, composition, packaging and every other detail of these drugs. If such drugs are found below the standard, we report it to the DDA which recalls these products from the market. Similarly, we visit laboratories and inspect products of foreign countries before importing them to Nepal. <br />
	<br />
	<br />
	<strong>Pharmaceutical companies also have their own laboratories. How good are they? <br />
	</strong><br />
	<br />
	A pharmaceutical company must set up its own laboratory. We visit their laboratories and conduct a thorough inspection. Aspects like hygiene of the lab and precautions taken for the safety of its manpower, availability of equipments and trained manpower, location of the lab and its space, structure of the building, availability of water and other resources are taken into account while giving approval to the laboratories for production. We visit them regularly even after the approval Therefore, we must say that existing labs have been maintaining the required standard. Of course, there is a lot of scope for improvement and it’s a continuous process. All in all, they are good. <br />
	<br />
	<br />
	<strong>Out of 49 pharmaceutical factories operating in Nepal, only 26 have been producing pharmaceutical products under the World Health Organisation’s (WHO) Good Manufacturing Practice (GMP). Why is this number so low? <br />
	</strong><br />
	<br />
	It’s been about 8 years that Nepal became a member of the WTO. However, our pharmaceutical companies were established long before we got associated with the WTO. At that time, our aim was to encourage people to invest in the pharmaceutical sector so that the country can gradually substitute imported medicines. The procedure to obtain operating licenses was not that strict. Now that the country has entered an agreement with the WHO to maintain its GMP standard, we could not ask them to upgrade their laboratories and manufacturing units overnight. It requires huge capital for a company to be at par with the international GMP standard. The DDA has been asking the existing factories to upgrade themselves time and again by allowing a certain time-frame to them. In fact, the DDA has directed all existing pharmaceutical companies to upgrade themselves by the end of this year. Because of this provision, many companies have applied for GMP and few of them have already received the certification. However, there are still some companies that have not applied for this process. I believe the DDA will take adequate measures against such factories in the future. <br />
	<br />
	<br />
	<strong>Have all the pharmaceutical companies been maintaining Good Laboratory Practices (GLP)? <br />
	</strong><br />
	<br />
	It is very essential to maintain GLP to establish a pharmaceutical industry. Companies that do not maintain GLP are not allowed to begin production. Before any pharmaceutical product is produced, we check whether the laboratory has used standard raw material and put the lab in the suitable location and purchased good quality machines or not. When the product is made, we analyse its composition, packaging, punching, amount of active drug in the medicine and its storage. These aspects fall under GLP and we make sure that factories are up to the mark on each of these aspects before granting it permission to operate. To make our existing factories concerned about GLP, we conduct trainings on this aspect regularly. <br />
	<br />
	<br />
	<strong>What special benefits will we have by producing pharmaceutical products in line with the WHO’s GMP and GLP guidelines? <br />
	</strong><br />
	<br />
	Maintaining GMP and GLP standards will give credibility to our drugs in the international market. It will eventually pave way for the export of our products. Though there are only 26 pharmaceutical manufacturing companies that have been producing products maintaining GMP standard, about five companies are in the process to get the certification. We will be visiting their manufacturing plants and the laboratories to refer for the certification. <br />
	<br />
	<br />
	<strong>So, we do have an opportunity to export our products. <br />
	</strong><br />
	<br />
	Export is not just limited to quality of the drug. Every country has a specific policy about importing drugs from another country. If our country can fulfil those clauses, we won’t have problem in exporting our products. Even India that has been exporting its products to almost all corners of the world, is willing to import drugs from us. But it has set some clauses regarding drugs import. If we can fulfil these clauses, India can be a potential market for our medicines. Therefore, export is more related to the policy of a specific country. Some of our companies are trying to export drugs to Singapore and Malaysia as well. We are very rich in resources for pharmaceutical products. All we need is skilled manpower and the technology. Provided these aspects, we have huge potential for export. <br />
	<br />
	<br />
	<strong>What sort of drugs are we strong in and where do we still need to do research? <br />
	</strong><br />
	<br />
	The domestic production has been able to fulfil 60 per cent of the current demand. For the remaining 40 per cent, we have to be dependent on imports. We are strong in therapeutic drugs but we still have to be dependent on imports for injectable drugs and biological products. It takes a huge capital and expert manpower to produce such drugs. The labs need to be sterilised and made aseptic to produce these medicines. Even the building has to be designed in a specialised way for such drugs. There are only two or three companies that have been producing biological products. Most of the demand for injectable and biological drugs is fulfilled through imports. <br />
	<br />
	<br />
	<strong>What is the status of human resource in the pharmaceutical sector? <br />
	</strong><br />
	<br />
	In the last few years, pharmaceutical sector has been witnessing a growth in the quantity of trained manpower. The existing four universities of our country have been producing manpower for this sector. Kathmandu University (KU) has been operating classes of pharmacy at the Bachelor, Masters and the Doctorate levels. Tribhuvan University (TU) also runs a bachelor level programme while Purbanchal Univeristy (PU) has given affiliation to about 19 colleges to operate pharmacy classes. Similarly, Pokhara University also has a Bachelor of Pharmacy programme. So, around 500 students graduate in this sector annually. <br />
	<br />
	<br />
	<strong>Where do these graduates get job placement? <br />
	</strong><br />
	<br />
	A large number of students with Bachelor degree in pharmacy open their own pharmacies while some others work in pharmaceutical factories, laboratories and hospitals. A few of them pursue a teaching career but most graduates from the Institute of Medicine (IOM) and Kathmandu University go abroad in search of greener pastures. The flow of application for establishing pharmaceutical factories was high a few years back but the present political situation has been a hindrance in establishing new factories. Therefore, the graduates find the overseas market better for greater exposure. If the country could emerge from the present political turmoil, they too can find employment opportunities in their own country. <br />
	<br />
	<br />
	 </p>',
			'published' => true,
			'created' => '2012-08-15',
			'modified' => '2012-10-10',
			'keywords' => '',
			'description' => 'Nepal’s pharmaceutical expense is at par with other South Asian countries, thanks to the increase in the number of pharmaceutical companies and their production. In 2008, the total per capita pharmaceutical expenses was US$ 6.96 while the total amount of pharmaceutical expenses stood at Rs 13.09 billion in Nepal',
			'sortorder' => '558',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 12 => array(
		'Article' => array(
			'id' => '650',
			'article_category_id' => '40',
			'title' => 'Open Skies Of Nepal',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	<strong>By Pinaki Roy <br />
	<br />
	</strong><br />
	<img alt="coverstory july" border="1" height="217" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/coverstory(1).jpg" vspace="5" width="400" /><br />
	<br />
	<br />
	The flow of international passengers in the first quarter of 2012 has been impressive enough to raise optimism among the concerned stakeholders. The statistics between January and March 2012 is an indication that international air service and passenger movement to and from Nepal is set to register a significant increase this year compared to 2011. A total of 717,182 international passengers (see table) availed air services via Tribhuvan International Airport (TIA) – the only international airport of Nepal – in the first three months of 2012, says Raj Bahadur Maharjan, Director at TIA’s Flight Approval Department. <br />
	<br />
	<br />
	There has been an increase of 84,459 passengers when compared to the first quarter of 2011, thereby registering a growth of 13.35 per cent over the same period of the previous year. Monetarily speaking, the total annual international flight service business in Nepal is worth an estiamted Rs 80 billion. <br />
	<br />
	<br />
	Ratish Chandra Lal Suman, General Manager at TIA, says, “The number of passengers has increased in the first quarter of this year also because of new airlines coming into operation and providing added air services.” He attributes the increment both to the increase in inbound tourists and the outbound migrant workers to different countries. Even though GMG Airlines towards the end of 2011 and Kingfisher Airlines in February 2012 ceased to operate in Nepal, their absence was promptly compensated by Indigo (October 2011) and RAK Airways (February 2012). <br />
	<br />
	<br />
	The number of flights that served these passengers was 5,693 (up by 9.69 per cent from 5,190 flights during the same period last year). While 2,846 flights made outbound journeys, the number of flights that landed at the TIA stood at 2,847. A total of 368,934 passengers flew out of Nepal while another 348,248 landed in the country from January to March this year, a growth of 11.48 per cent and 15.40 per cent respectively when compared to the same period of 2011. In the first quarter of the previous year, 330,954 passengers took outbound flights while another 301,769 passengers entered Nepal via inbound flights making a total of 632,723 passengers who availed international air services from January to March 2011. <br />
	<br />
	<br />
	This growth is certainly encouraging coming at a time when the International Air Transport Association (IATA) left this year’s global airline profit forecast unchanged at $3 billion, or 0.5 per cent of industry revenues. At a summit of airline chiefs being held this year in Beijing, this stable outlook masks a widening gap between regions with “only North and South America set to improve and the rest of the world seeing reduced profitability.” <br />
	<br />
	<br />
	<strong>The Year Gone By <br />
	</strong><br />
	<br />
	International air passengers flying via the Nepali sky crossed 2.7 million for the first time in 2011. These passengers travelled via Nepal with 28 international airlines operating in Nepal last year, according to Maharjan. He said that additional airlines such as IndiGo, added frequency of flights and passenger occupancy increased the number of air passengers using the Nepali route. The year 2011 saw 2.7 million international passengers flying out and landing in the country on board 22,791 flights. A total of 28 airlines flew 2,700,027 passengers (see table) for the year, says Maharjan. This was an increase of 10.81 per cent in comparison to 2010 when 2,436,558 passengers availed international air services in Nepal. <br />
	<br />
	<br />
	While 1,407,512 passengers flew out of the country, the passengers entering the country numbered 1,292,515. A total of 11,393 flights departed while 11,398 flights entered Nepal during the period making a total of 22,791 flights for the year. The only new airline that started operations in 2011 was Indigo. Qatar Airways carried the most number of passengers – 277,796 on 2,374 flights while Jet Airways was second with 272,560 passengers on 2,191 flights. Nepal Airlines Corporation was third with 202,041 passengers on 1,619 flights. <br />
	<br />
	<strong><br />
	Migrant Worker: The Main Market </strong><br />
	<br />
	<br />
	With more Nepalis departing for jobs abroad and increase in tourist movement, international airlines operating in Nepal have witnessed this rise in passenger movement in recent times. The airline companies claim that they are equally focusing on all the segments, which include business travellers, tourist, VFR (visiting-friends and relatives) and workers. However, it’s no secret that migrant workers comprise around 80 percent of the total passengers availing international air services in Nepal. Most of the international airlines flying to and from Nepal are more focused on manpower markets rather than the tourism markets. Of the total international flights, the airliners carry only 20 per cent tourists, observe industry analysts. <br />
	<br />
	<br />
	<strong>Contribution to Tourism </strong><br />
	<br />
	<br />
	International carriers from India accounted for the largest share of inbound tourism in Nepal in the previous year. According to TIA, Indian carriers flew around 48 per cent of all tourists visiting Nepal in 2011 – dubbed as Nepal Tourism Year (NTY). Indian travellers alone grew by 39 percent to 145,338 in 2011, a 26.67 percent share in total tourist arrivals to Nepal. As per TIA statistics, five Indian airlines—Spice Jet, Jet Airways, Air India, Jet Lite and Kingfisher—figured among the top 10 carriers bringing tourists to Nepal. The total tourist arrivals via air numbered 544,985 in 2011 that entered Nepal on board 28 international airlines. <br />
	<br />
	<br />
	Indian budget airline Spice Jet – that started flying to Nepal in October 2010 – was the largest carrier of tourists into Nepal in 2011, accounting for 15.28 percent of the arrivals. Jet Airways and Air India were the second and third largest tourist carriers respectively accounting for 12 percent and 8 percent tourist arrivals. Two legacy carriers—Thai Airways and Qatar Airways—fell in the inbound tourism rankings in 2011. While Thai’s market share shrunk to 8 percent from 11 percent in the previous year, the share of Qatar Airways slipped to 7 percent. Etihad Airways and Gulf Air, two more carriers from the Middle East, lost their slots in the top 10 list in 2011. <br />
	<br />
	<br />
	The healthy growth of Indian tourists to Nepal attracted yet another Indian private airliner Indigo Airlines that started New Delhi-Kathmandu flights in October last year making it the sixth Indian private airliner flying between Nepal and India. Currently, Air India, Jet Airways, Jet Lite, Spice Jet and Indigo fly around 130 flights a week between Kathmandu and various Indian destinations while Kingfisher Airlines has stopped flying to Nepal for the last few months. Needless to say, the increase in the number of Indian airliners flying to Kathmandu has encouraged the aviation sector in Nepal immensely and boosted the country’s tourism prospects. A total of 207,961 tourists entered Nepal via air in the first four months of 2012, a growth of 23.1 per cent over the same period last year. A total of 168,958 tourists had entered Nepal from January to April in 2011. <br />
	<br />
	<br />
	<strong>Direct Flights <br />
	</strong><br />
	<br />
	Broadly, any business or industry can be categorised either as monopoly or market-oriented. Due to the inherent nature of international air transport industry, every country enjoys certain exclusive rights, which indirectly helps them monopolise some air routes. This right, if exercised, could be of tremendous benefit to a country like Nepal. “Direct flights between Nepal and other countries can play a key role in bringing increased number of tourists into our country,” an industry insider opines. <br />
	<br />
	<br />
	For instance, none of the 27 airlines flying into Nepal have the right to operate direct long distance flights between Nepal and lucrative destinations like Europe, Japan and Australia. They can operate only connecting flights whereas Nepal gets the sole privilege of operating direct international flights from the country. As foreign travellers have no choice of direct air connectivity, air travel costs become higher while coming to Nepal. Mihin Lanka, a Sri Lanka-based airline has expressed its interest to operate direct flights between Colombo and Kathmandu. This was conveyed to Prime Minister Baburam Bhattarai by Lankan President Mahinda Rajapaksa on the sidelines of the recently concluded environmental summit in Rio de Janeiro, Brazil. Air Service Agreement (ASA) between Nepal and Sri Lanka allows Sri Lanka-based airlines to operate up to 14 flights a week in the Colombo-Kathmandu-Colombo sector. <br />
	<br />
	<br />
	<strong>State of the National Carrier </strong><br />
	<br />
	<br />
	The status of the national carrier – Nepal Airlines Corporation (NAC) – in terms of international flight operations is disappointing to say the least. Around 95 percent of the international aviation market in Nepal is in the hands of foreign air operators. “Our market share is worth less than Rs 4 billion out of the international flight service business of Rs 80 billion annually,” says NAC Spokesperson Saroj Kasaju. The market share of NAC shrank to an all-time low in 2011 in terms of tourist carriage. The national flag carrier held the 10th position with a mere 3.05 percent while it had a market share of 4.87 percent in 2010. The eroding market share of NAC, according to travel trade entrepreneurs, is due to its inability to expand its fleet while the fact remains that the prerequisite for business expansion in airline industry is acquisition of aircraft, especially for operation in the lucrative international sector. In 2001, NAC was a leading carrier accounting for 28 percent of inbound tourists. <br />
	<br />
	<br />
	With more international airlines entering the Nepali skies and NAC’s track record of flight delays, travel agencies say the national flag carrier has become the last choice among visitors. Currently, NAC operates its international flights with two ageing Boeing 757s, either one of which is usually offline due to technical glitches and periodic C-checks. The carrier now flies to only five international sectors – Dubai, Doha, Bangkok, Kuala Lumpur and Hong Kong – down from 21 destinations in 12 countries with four Boeings till 1993. The airline now plans to start flights to Damam in Saudi Arabia. It also plans to start flying to Kuala Lumpur seven-days-aweek besides launching direct flights to Doha, Qatar. <br />
	<br />
	<br />
	The corporation currently spends Rs 1.39 billion on repairs alone for the two planes – Boeing 757-9N ACA Karnali and ACB Gandaki – which it has in its ‘fleet’ right now, says Kasaju. “Out of the estimated income of Rs 4.52 billion from international flights in the current fiscal year, 23 per cent of the total amount has gone into the repairs of the two Boeings,” he adds. The cost of repairs has gone up considerably in the last five years due to the fast ageing of the two Boeings. This expense is several times more than what the private carriers spend on repairs and maintenance which is six to 10 per cent of their earnings from flights. <br />
	<br />
	<br />
	A strong and competitive national flag carrier can serve as a key vehicle of the country’s economic and tourism development. Kasaju says, “NAC has become a factory without machines due to lack of aircraft but hasn’t gone in loss yet.” He cautions though that the corporation can land in major financial trouble if aircraft is still not added to its fleet. <br />
	<br />
	<br />
	However, all is not lost as Kasaju reiterates that the corporation is still making profit thanks mainly to its ground handling business. The corporation provides such service to 23 foreign airlines that fly to Nepal. From a domestic perspective, the corporation is expected to get five units of 19-seater aircraft and three units of 56-seater aircraft from China on grants and concessional loan. The airline management is scared of an imminent demise of the company as its current basis of survival – ground handling business – is in jeopardy due to a move by the Civil Aviation Authority of Nepal (CAAN) to possibly involve the private sector and allow competition. <br />
	<br />
	<strong><br />
	Ground Handling Services at TIA </strong><br />
	<br />
	<br />
	CAAN is currently holding discussions with other government agencies and stakeholders to allow the private sector to operate ground handling services at the TIA. It informed that it may soon allow private firms to operate ground handling services during the night time. Currently, NAC that provides ground handling services to almost all international airlines currently earns Rs 2 billion a year of which 10 percent is paid to CAAN as royalty. CAAN says that many international airlines and customers have complained about NAC’s ground support service. The complaints are mainly two: thefts and tampering with passengers’ luggage and higher ground handling charges of NAC in comparison with other international airports in the region. It is hopeful that the introduction of a private firm will enhance quality and manage congestion at TIA. “The Civil Aviation Authority Act 1996 and National Civil Aviation Policy 2063 state that the ground handling service should be competitive. Besides, the agreement with the corporation also does not restrict CAAN from appointing a private firm to manage ground handling services,” says Suman. He adds, “Due to NAC’s monopoly, the ground handling charges in our country are the most expensive in this region.” <br />
	<br />
	<br />
	The addition of one more ground handling service provider is expected to bring in competition and end the monopoly thereby resulting in quality service at lower service charge, adds Suman. TIA currently has the capacity to serve 8.2 million passengers a year and can serve up to 1,350 international passengers on an hourly basis. “We have not been able to serve to our total potential due to organisational inefficiencies. The number of flights out of TIA is less than half the capacity that we can accommodate,” Suman says. Meanwhile, NAC officials deny the charges and claim that the incidents of baggage theft and breakdown are minimized to internationally acceptable level. They also allege that some of these complaints are actually due to the fault of CAAN and other government agencies involved in the business such as the immigration department. According to them, some problems are due to lack of adequate infrastructure such as insufficient apron space for parking the craft which are forced to wait in the taxiway for long periods. Besides, inadequate number of boarding gates cause delays in boarding and confuse passengers on the correct conveyer belts to deliver the luggage are frequently out of order while the luggage weighing machines are not repaired on time. Insufficient number of toilets and chairs in the passenger waiting area add to passenger woes further. <br />
	<br />
	<br />
	The NAC management says that it’s not only the ground handling services that are expensive in Kathmandu. It gives examples of the fuel price and the charges that CAAN levies on account of aircraft landing, parking and navigation. The charges for CUTE used for passenger check-in too are high in Nepal than elsewhere, argue NAC executives. They point that the ground handling services in many other countries such as Thailand, UAE, Qatar, Malaysia and Hong Kong are provided by their national flag carriers either on their own or through subsidiaries. In Thailand, even the flight catering service is provided by the party that is recommended by Thai Airways, they say. <br />
	<br />
	<strong><br />
	Trans-Himalaya 2 Airspace <br />
	</strong><br />
	<br />
	Considering the increased air traffic at the TIA, CAAN is planning to operate the international airport 24 hours a day. This is expected to help in managing the increasing air traffic. Besides, it is also seeking an alternative location nearby Kathmandu for shifting the domestic airport from TIA to address the congestion. Likewise, it is also going to extend the domestic terminal building and make a separate car parking area for arriving passengers. <br />
	<br />
	<br />
	Nepal plans to ask India for the development of Trans-Himalaya 2 airspace (Hong Kong-Kunming- Guwahati-Kathmandu) connecting Southeast Asia, the Middle East and Europe in view of the increasing air traffic demand in Nepal. The route is one of the most lucrative routes for Nepal and if opened, it will be the shortest way from China and the Far East to the Middle East and Europe. The air distance from Kathmandu to Hong Kong will also be reduced. Implementation of this airspace will allow international airlines to fly over Nepali airspace, which means savings in fuel and distance for carriers flying this route and revenue for Nepal. “The airspace was discussed during Prime Minister Baburam Bhattarai’s visit to Delhi,” says Suresh Acharya, Joint Secretary at the Ministry of Culture, Tourism and Civil Aviation (MoTCA). According to him, India is positive about opening the proposed route. He adds that separate discussions need to be held with the Chinese government with regard to permission from the Chinese side for the opening of Trans-Himalaya 2 airspace. The opening of this proposed air route will have hundreds of international airlines use Nepali airspace and help the country to develop as a hub. CAAN officials add that the proposed route would be the shortest and could establish Nepal as an international transit point and result in enhanced air revenue for the country. The second international airport that the government has planned to construct in Nijgadh of Bara would be the greatest beneficiary in the event this air route comes into operation. Similarly, for aircraft entering Nepal’s air space, CAAN proposes Biratnagar (in the eastern region), Bhairahawa (in the western region) and Nepalgunj (in the mid-western region) as the three crossborder airspaces. Currently, Nepal has three incoming air routes—Simara, Kakkarbhitta from Paro in Bhutan and the Nonim air route from China. The Kathmandu-Mahendranagar-Delhi (L626) is the outgoing air route for international flights. Nepal is seeking new airspaces to ease traffic congestion, enhance information transmission, traffic regulations, emergency recovery of aircraft during accidents and automatic message switching system in its aviation sector. <br />
	<br />
	<br />
	The proposed route is more direct, safer, economical and efficient for flights between Europe, the Middle East and East Asia. These routes will reduce the congestion of westbound traffic flows across the Bay of Bengal. Experts claim that access to this international air space would give Nepal a huge opportunity to develop as a hub like India, the Maldives, Pakistan and Sri Lanka in South Asia. Maximum coverage of Nepal’s air space on long distance international flights via this proposed route could bring great benefits to the country if brought into operation <br />
	<br />
	<strong><br />
	The Way Forward </strong><br />
	<br />
	<br />
	As per the estimates of the International Civil Aviation Organisation (ICAO), an investment of US$ 100 in the air transport industry produces benefits worth US$ 325 for the economy, and 100 additional jobs in the air transport sector results in 610 new jobs across the wider economy. It further suggests that the air transport component of civil aviation accounts for more than 4.5 percent of the global GDP. As for the numbers, three carriers – AirAsia X, Malaysia Airlines and BB Airways – start operations in 2012. AirAsia X has already started operations while Malaysia Airlines and BB Airways are planning to operate international flights from September this year. It’s courtesy the competition among airlines on Kathmandu-Kuala Lumpur route as these three carriers unveiled plans to operate on the sector. The growing movement of Nepali migrant workers to and from Malaysia is one of the reasons luring airlines to fly on this sector. Statistics released by the Department of Foreign Employment shows that an average of 350 Nepali workers left for the Malaysian capital on a daily basis in the last fiscal year. While Malaysia Airlines is the national carrier of Malaysia, AirAsia X is a Malaysia-based budget carrier. ASA between Nepal and Malaysia allows Malaysian carriers to operate up to 21 flights a week. On the other hand, BB Airways is an upcoming local carrier promoted by TBI Group of Non Resident Nepalis (NRNs) in Japan which has already unveiled plans to operate scheduled flights on seven international routes including Kuala Lumpur. <br />
	<br />
	<br />
	There is an unlimited potentiality of the development of tourism and civil aviation sectors in the country. A well-equipped fullfledged international airport – where long-haul flights from Europe and America could directly land and take off – is needed for the development of the aviation and tourism sectors. In this context, a proposed fullfledged airport at Nijgadh can be an international hub for air transit and contribute substantially to the overall economy of Nepal. Nepal Investment Board (NIB) has already taken the initiative on projects related to the upgradation of TIA, and construction of a new airport in Nijgadh. It is estimated that the TIA upgrade will cost Rs 52.80 billion while the construction of the new airport in Nijgadh will cost Rs 45 billion. <br />
	<br />
	<br />
	<br />
	<br />
	<br />
	<strong>‘Gulf Air Provides Excellent Connectivity to a Large Number of Nepali Workers’ <br />
	<br />
	<br />
	<br />
	<img alt="" src="http://www.abhiyan.com.np/images/uploaded/renji-kurian-th_1343383001.jpg" /><br />
	<br />
	RENJI KURIAN THOMAS </strong> <strong><br />
	Country Manager <br />
	Gulf Air <br />
	<br />
	</strong> <br />
	<br />
	<strong>Can you share the rate of increase in passengers flying to and from Nepal over the years? <br />
	</strong> <br />
	There has been a steady growth of passengers over the years. As one of the major international airlines operating in Kathmandu, we have seen nearly a 20 per cent increase in the number of passengers in the first quarter of the year 2012. The latest report of Tribhuvan International Airport (TIA) also has our airlines figuring among the top four international airlines that have seen the strongest growth in passengers’ movement. Having started our operation in July 1998, we are now operating 12 flights between Bahrain and Kathmandu weekly. <br />
	<br />
	<br />
	<strong>How do you assess the quality of air service infrastructure in Nepal? <br />
	</strong> <br />
	The quality of air service is very good as the airport takes care of landings and take-offs for as many as 27 international airlines. However, there is always a scope for improvement with the increase in tourism traffic in Nepal. The airport has been working to improve its facilities further as such. <br />
	<br />
	<br />
	<strong>How has been the demand on the number of flights over the years? How are you managing the supply to meet the demand? <br />
	</strong> <br />
	The demand on this route is increasing steadily. By increasing our frequencies as well as operating large aircrafts periodically, we manage to accommodate more passengers. Gulf Air provides excellent connectivity to a large number of Nepali workers in the gulf region, particularly Saudi Arabia. We operate larger aircrafts as per the situation, especially when the demand is high. <br />
	<br />
	<br />
	<strong>What are your unique selling propositions? How aggressively are you marketing them? <br />
	</strong> <br />
	We have got the biggest network in the gulf region and several USPs to our credit. One of them is our schedule with excellent connectivity, for example, our split schedule of flights between Bahrain and Kathmandu offers very good travel options as it allows travelers to choose their own flight timings. In addition, Gulf Air’s seamless connectivity to Europe and the Far East via the Bahrain hub is an ideal choice for European customers travelling to Nepal or the Far East. Moreover, we are currently operating one of the youngest fleet with an average age of 5.2 years. This A320 fleet which operates between Bahrain and Kathmandu, offers ergonomically designed seats for travelers with maximum comfort, full flatbed seats on Falcon Gold class and the latest in-flight entertainment. <br />
	<br />
	Internationally, we are the first airline in the world to offer ‘Sky Hub’ that offers hi-speed broadband internet, mobile phone connectivity, live TV telecast, popular entertainment programs, sports channels and an array of movies, music and games. In addition to that, Gulf Air’s unique Sky Nanny and Sky Chef Services have received positive feedback from the customers. These services have helped us win the best ‘family friendly airline’ from US-based publications and the ‘best cabin crew’ award ranking from an IATA survey. <br />
	<br />
	<br />
	<strong>Airlines flying to Nepal are said to have very few business class seats. Is it true that airlines do not see prospects for business class market here? <br />
	</strong> <br />
	The aircrafts that we fly to Kathmandu are the same as the ones that fly on our other routes. We use a combination of narrow and wide body aircraft for flights to Kathmandu, depending on the traffic. We agree that the potentiality of business class market is not high in Nepal when compared to other regions. However, we offer 16 Falcon Gold Business class seats on our A320 fleet which has a configuration of 136 seats in total. The gold business class has full flat seats and several modern features for those who prefer stylish and luxurious travel. <br />
	<br />
	<br />
	<strong> What are your expansion plans? <br />
	</strong> <br />
	We do continuously look at the number of the passengers and market demands and decide accordingly. As said earlier, we have increased our frequencies and are also periodically operating larger aircraft to meet the seasonal and expanding market. <br />
	<br />
	<br />
	<strong>Most of the flights made to Nepal are targeting migrant workers. How sustainable is this policy? <br />
	</strong> <br />
	As mentioned in the TIA report, increased labor traffic accounts for around 80 percent of seat demand in all international airlines. All international carriers connecting to Nepal saw a robust increase due to this reason. We cater both to migrant workers and tourists. However, the majority of our traffic to Kathmandu is the migrant workforce working in the gulf countries. We foresee this trend to continue for some time to come. <br />
	<br />
	<br />
	<strong>What are your operational difficulties and facilities in Nepal? <br />
	</strong> <br />
	There are no operational difficulties except the weather of course. As you know, we are sometimes forced to divert our flights to nearby Indian airports due to unfavorable weather conditions such as dense, fog etc especially during winter. However, with our split schedule flights, we have better timings for landing in Kathmandu. <br />
	<br />
	<br />
	<strong>How are you managing your ground handling staff and crew members? <br />
	</strong> <br />
	We have Nepali speaking cabin crew in our team, who are deployed on the Kathmandu route most of the time so that our Nepali customers could feel at home. Almost all our staffs at the airport and city office are Nepalis. <br />
	<br />
	<br />
	<strong>How do you see the prospects of Nepal’s tourism sector? How is your airline contributing to it? <br />
	</strong> <br />
	Tourism is one of the main industries in Nepal. The Nepal Tourism Year 2011 was quite successful. Through International air passenger movement, Nepal grew 13.35 percent in the first three months of 2012 with high migrant workers and tourist traffic. Kathmandu is one of the major tourist destinations with thousands of foreigners visiting the country for a variety of reasons. <br />
	<br />
	The tourism sector is bound to expand as more and more people opt for unique and affordable destinations such as Nepal. We are able to connect more passengers than others to travel to Kathmandu via our Bahrain hub. The tourism campaigns or promotions by Nepali tourism authorities in the gulf countries can further help an increment in the tourist traffic to Nepal. I am proud to say that Gulf Air too has a role to play in the tourism development of Nepal as we cater to a large number of European tourists who find it convenient to fly with us. <br />
	<br />
	<br />
	<br />
	<strong>‘An International Airport at Nijgadh can help Establish Nepal as a Transit Hub’ <br />
	<br />
	<br />
	<br />
	<img alt="" src="http://www.abhiyan.com.np/images/uploaded/tri-ratna-manan_1343383130.jpg" /><br />
	<br />
	TRI RATNA MANANDHAR </strong> <strong><br />
	Director General <br />
	Civil Aviation Authority of Nepal (CAAN) <br />
	</strong> <br />
	<br />
	<strong><br />
	What is the current scenario of International flights operating in Nepal? </strong><br />
	<br />
	Earlier, we had altogether 28 operators conducting international flights. Among them, three operators namely GMG Airlines, Kingfisher Airlines and Bahrain Air postponed their flights. Simultaneously, three other operators namely BB Airways – a Nepali airliner – along with two airliners from Malaysia, Air Asia X and Malaysian national carrier Malaysia Airlines were included. Air Asia X is operating from July 3 while BB Airlines is to commence from September this year. That is to say, some airlines are withdrawing their flights while some others are commencing their operations soon. However, the numbers of operators are back to 28 as it was before. There are 33 other airlines waiting in the wings with their air service agreements (ASAs). <br />
	<br />
	<br />
	<strong>The infrastructure bottleneck is often the constraint to provide international standards services to the airlines flying to Kathmandu. What exactly is the situation? <br />
	</strong> <br />
	We must accept this fact. We are not being able to develop the infrastructure as per the growth of air traffic movements. That is why we are very often facing air traffic congestion at TIA. To address such problems, we are conducting various measures. First of all, a TIA Capacity Enhancement Project is going on with support from an ADB loan of US$ 70 million. CAAN itself is investing another US$ 30 million in the project. This US$ 100 million project will address the extension, expansion, and development of TIA which includes the civil infrastructures such as runway and taxiway extension, construction of additional parking bay etc. The development of equipment is another component that is also in our priority. These components are ATC automation and communication and navigation equipment. These tasks are part of the capacity enhancement project. We are also planning to separate domestic operators and shift them somewhere close to Kathmandu. Dhulikhel seems to be a possible location and a detailed feasibility study is being conducted for that purpose. We are looking at this alternative so that we can use the present TIA only for International operation. <br />
	<br />
	<br />
	<strong>How is CAAN addressing air traffic issues like landing and take-off, flow of flights and routes etc? <br />
	</strong> <br />
	We have some problems in the international air route and we are inviting Indian authorities to Nepal to hold discussions on this very soon. <br />
	<br />
	<br />
	<strong>How improved has the passenger handling capacity of TIA become in the recent years? <br />
	</strong> <br />
	We are continuously trying to improve our services. But I can’t say that the improvements are significant because of the limited facilities. Even the space is the same as we have been using before. Upon the completion of the ADB project, we would be able to enhance the passenger handling capacity and provide other facilities accordingly. <br />
	<br />
	<br />
	<strong>What happened to the plan of making TIA operational for 24-hours-a-day? <br />
	</strong> <br />
	We are continuously exercising to operate that way. But there are certain things to be considered like manpower planning, reliability of the radar etc which are essential in making TIA operate for 24-hours-a-day. Besides CAAN, the immigration authorities and the security establishments also need to be prepared for it. <br />
	<br />
	<br />
	<strong>What is the overall air service infrastructure situation of Nepal? <br />
	</strong> <br />
	In terms of airports and airport facilities, we (the Ministry of Culture, Tourism and Civil Aviation and CAAN) are aggressively involved in improving and increasing airport infrastructure. The project for constructing Gautam Buddha Regional International Airport at Bhairahawa is in the pipeline. The revised estimated cost for the project is US$ 77 million. Another project for a regional international airport in Pokhara is also proceeding for which China Exim bank has shown an interest to invest in. <br />
	<br />
	<br />
	<strong>How many of our airports are capable of handling international flights in terms of runways and other infrastructures in Nepal? <br />
	</strong> <br />
	Airports in Bhairahawa, Nepalgunj and Pokhara are capable for conducting cross border flights with India. They can operate in Indian cities like Lucknow, Varanasi, Delhi and Patna. As for fullfledged international operations, we only have TIA to look up to. <br />
	<br />
	<br />
	<strong>Experts say that lack of direct international flights from major tourist destinations have resulted in great loss for our tourism sector. What is CAAN doing about it? <br />
	</strong> <br />
	The entire aviation sector understands the value of direct international flights. The scenario of constructing Nijgadh International Airport has emerged due to this need. It’s been so many years that we are talking about constructing it but there is no achievement on this front so far. If the nation really wants to promote the tourism sector on a massive scale, a full-fledged international airport is a must as the present international airport (TIA) is not a full-fledged one. It has many constraints because of the terrain, runways and lack of other infrastructures. That is why it is not possible to operate long haul flights from the US and Europe. Landing a big aircraft is another impossibility given the present circumstances. If the tourists from countries in Europe and the US could travel directly to Nepal, it would have been convenient to us as well as the tourists. For instance, it takes a minimum of two stops and one has to spend more than 24 hours to travel from Europe to Kathmandu. All the pleasure and excitement is gone because the tourists feel exhausted and tired due to long flights. The travellers have to spend more hours in transit than on board the flights. <br />
	<br />
	We are unaware of the exact tourism potentiality of Nepal. The President of International Civil Aviation Organization (ICAO) visited Nepal recently. He was shocked to hear that we were able to bring only about 700,000 tourists against our target to bring in one million tourists during Nepal Tourism Year 2011. <br />
	<br />
	We will not be able to develop our tourism sector as desired if we depend entirely on TIA only. By constructing a full-fledged international airport at Nijgadh will not only enable us to operate long haul international flights but also help establish Nepal as a transit hub like Hong Kong and Bangkok. <br />
	<strong><br />
	<br />
	What do you have to say about the fifth freedom rights of international airliners operating in Nepal? </strong> <strong><br />
	</strong> <br />
	We assure such rights in the Air Service Agreement (ASA) with international operators. The recent controversy with Air Arabia on the fifth freedom rights is meaningless. As per the provision of an ASA between Nepal and UAE, it is their right to seek so. If the international operators do not get their fifth freedom rights, they cannot run their businesses. We can’t even imagine building the Nijgadh Airport leaving aside such rights. Fifth freedom rights will help develop Nepal establish itself as a transit hub. But these controversies are hardly true for some other international airlines. More than 90 per cent international airlines are enjoying fifth freedom rights, for instance, Druk air is operating a flight between Kathmandu and Bhutan via Delhi. <br />
	<br />
	<br />
	<strong>‘Dragonair is Bringing a lot of People into Nepal’ <br />
	<br />
	<br />
	<br />
	<img alt="" src="http://www.abhiyan.com.np/images/uploaded/thomas-bellamy_1343383224.jpg" /><br />
	<br />
	THOMAS BELLAMY </strong> <strong><br />
	Manager - Nepal <br />
	Hong Kong Dragon Airlines Ltd <br />
	</strong> <br />
	<br />
	<strong><br />
	Can you share the rate of increase in passengers flying to and from Nepal over the years? <br />
	<br />
	</strong> Dragon air started its operation in Nepal in 1989. The service was halted in 2001 and re-launched in 2007. We have gradually increased our frequency and now have daily flights. We have increased the aircraft size with the increase in passenger numbers. We are taking more passengers to China, Japan, Australia and the US. These are the big destinations for us. Dragonair is also bringing a lot of people into the country especially during the peak tourist season from September to April. <br />
	<br />
	<br />
	<strong>How do you assess the quality of air service infrastructure in Nepal? <br />
	</strong> <br />
	There have been some good changes at the TIA recently – for example, the new check-in desks and screens that have been installed at the international terminal. We hope for more improvements to be made in the future. It is very important to have a very strong main airport here in Kathmandu to act as a hub for inbound Nepali tourism. <br />
	<br />
	<br />
	<strong>What is the demand on the number of flights over the years? How is Dragon Air managing the supply to meet the demand? <br />
	</strong> <br />
	We have the capacity to meet the growing demands. There is enough demand to utilise the capacity and thus, we increased the frequency to a daily flight in September 2011. We are quite optimistic about Nepal and will continue to monitor such situations. From the tourism perspective, a lot depends on the stability of things here in Nepal. If Nepal can get good coverage in other countries, the travel agents and airlines will be more willing to promote Nepal and the number of passengers will increase as well. <br />
	<br />
	<br />
	<strong>How cooperative have the Nepali government institutions been in helping meet the market demands? <br />
	</strong> <br />
	I think the intentions are good. There are obviously a few constraints in Nepal, but many of these will fall off in a more stable environment. For now, we just need to continue working together to improve wherever we can and to focus on the positives. The Airlines Operating Committee which comprises airport representatives from most of the major carriers in Nepal continues to work with the relevant authorities to look for improvements wherever possible. <br />
	<br />
	<br />
	<strong>What are your unique selling points? How aggressively are you marketing them? <br />
	</strong> <br />
	One of the unique selling points of Dragonair is having Hong Kong as its hub. We have fantastic connections, and together with our sister airline Cathay Pacific, we are capable of connecting passengers to over 160 destinations worldwide. In Hong Kong, the minimum connecting time with Cathay Pacific has been reduced to 50 minutes which gives passengers more choice and convenience. There are many destinations from Hong Kong within a relatively short distance – half of the world’s population within five hours. On the long-haul side of things, we connect to New York four-times-daily. We look at the possible frequency rather than relying solely on our capacity. We want to give passengers more choice, which means provide more departure time wherever sustainable. <br />
	<br />
	Dragonair’s world-class service and quality products have long been recognised – we’ve won the Best Airline – China category for six consecutive years in the respected Skytrax passenger survey and we were also voted the “World’s Best Regional Airline” in 2010 and 2011. Dragonair’s major strength is China. We fly to 19 destinations in mainland China and operate about 400 flights a week. Adding to it, our sound safety record, well-trained and professional staff, and good on-time performance are the positive sides to focus on. <br />
	<br />
	<br />
	<strong>Airlines flying to Nepal are said to have very few business class seats. Is it true that airlines do not see prospects for business class market here? <br />
	</strong> <br />
	Asia has shown its ongoing potential and resilience in the face of the current global economic downturn. Until now, Nepal has widely been regarded as a leisure travel destination. We are optimistic that, with stability, business and industry here can grow and along with it, the demand for business travel will rise. We actually have a decent number of business class seats on our Airbus A330 aircraft, but it would of course be nice if passengers originating from Kathmandu could fill more of those seats. <br />
	<br />
	<br />
	<strong>What are your operational difficulties and privileges received in Nepal? <br />
	</strong> <br />
	The weather is always a challenge for airline operations and it is no exception here in Nepal. We have worked with the authorities and our own engineering teams to overcome the constraints we face here, so as to ensure timely operation as much as possible. This is particularly important in the context of the airport operating hours (the airport closes after midnight). The ever increasing number of tourists would definitely benefit from further improvements at the airport, and we will continue to support positive initiatives from the authorities in that direction. <br />
	<br />
	<br />
	<strong>It is said that operating in Nepal is very cheap despite having poor infrastructure. What are its advantages? <br />
	</strong> <br />
	While operational cost is one of the many factors, we look at running our business anywhere. We see Nepal more for its market potential i.e. its attractiveness as a destination and travel demand to other countries like US, Australia, Japan, Korea and of course Hong Kong and China. <br />
	<br />
	<br />
	<strong>What are your expansion plans? <br />
	</strong> <br />
	We continue to look forward to opportunities in Nepal and act accordingly in terms of available possibilities. We will increase frequency if we continue to see good growth in passenger numbers at sustainable yields. Basically, we will react to the situation, and we’re optimistic that the outlook for Nepal is bright. <br />
	<br />
	On a larger scale, Dragonair is adding six aircraft: four Airbus A320s and two Airbus A330s to the fleet this year - expanding the size of the Dragonair fleet from 32 to 38. Two additional A320s and one A330 have already entered the fleet this May. In terms of Dragonair’s network this year, we launched flights to Jeju on 01 May (three flights per week), to Chiang Mai on 01 July (four flights per week) and to Kolkata, India in winter 2012 (four flights per week). Flights were also resumed to Taichung on 14 May (twice daily), to Guilin on 01 May (daily), and Xian on 01 Apr (daily). <br />
	<br />
	<br />
	<strong>‘Thai Airways was the First Airline to Operate Jet Service to Nepal’ <br />
	<br />
	<br />
	<br />
	<img alt="" src="http://www.abhiyan.com.np/images/uploaded/chantouch-srini_1343383315.jpg" /><br />
	<br />
	CHANTOUCH SRINILTA </strong> <strong><br />
	General Manager <br />
	Nepal &amp; Bhutan <br />
	Thai Airways International Public <br />
	Company Limited <br />
	</strong> <br />
	<br />
	<br />
	<strong>You are going to complete 44 years of operation in Nepal. How has been the journey so far? <br />
	</strong> <br />
	The history of Thai Airways International in Nepal dates back to 1968 when the inhabitants of Kathmandu had their first glimpse of THAI’s 72-seater French built Caravelle SE210 aircraft which touched the unfamiliar runway of Tribhuvan International Airport (TIA). We are going to complete 44 years of our operation in Nepal this year. <br />
	<br />
	THAI was the first-ever airline to operate jet service from Kathmandu and the airline that opened up the forbidden Himalayan Kingdom as a new tourist destination to the world. It was a spectacular and memorable event in the Nepali Aviation history. <br />
	<br />
	THAI also introduced the first computerized reservation system in Kathmandu in February 1985 and provided this facility to its leading travel agents since 1990. Royal Orchid Lounge at the TIA used to be the only lounge operated by THAI in the 1990s. However, after Nepal Government adopted liberal sky policy, many other international airlines joined the race. Our monopoly market share has been diluted a little bit but we are enjoying the competition. It has given us the opportunity to prove ourselves as the first choice carrier in terms of our fleet size and service standards. <br />
	<br />
	<br />
	<strong>What is the demand status on the number of flights over the years? How are you managing the supply to meet the demand? <br />
	</strong> <br />
	Being a pioneer and well renowned carrier, THAI always had the strategy to adjust the number of flights as per market demand. In the beginning, we operated once a week flight between Bangkok and Kathmandu and soon after that, one more flight was added to cope with the high demand of passengers. THAI started daily flights with A300-600 aircraft since the end of October 1997. In the context of growing demand of air seats to/from Nepal, we added three more flights in 2008. Based on the request of different tourism related associations like NATTA, PATA, HAN and NTB, we began to run 10 flights per week. Now we have seven flights a week with a configuration of 30 business class and 279 economy class seats. <br />
	<br />
	<strong><br />
	Thailand has been one of the most popular destinations for outbound tourism for the Nepalis. What is Thai Airways’ contribution to it? <br />
	</strong> <br />
	Thai Airways has played a leading role in the development of tourism not only in Thailand but also in helping Nepal in worldwide promotion as a major tourist destination through various media like our in-flight magazine “Sawadee” and Royal Orchid Holiday Packages tours. Besides performance, punctuality, and silk class services to our valued customers, we have joined hands with the Tourism Authority of Thailand by frequently organizing different events like Trade Fairs, Educational/ Medical fairs, familiarization trips for agents and media, Thai Food festivals, Thai Puppet shows etc. We also offer attractive packages and special fares for students and leisure travelers. <br />
	<br />
	<br />
	<strong>How has Thai Airways been promoting Nepal at the international level? <br />
	</strong> <br />
	Thai Airways was the first airline to operate jet service to Nepal and introduce this country to the world. These days, many airlines are inspired to operate their services in this country due to our successful operation for the past 44 years. THAI had actively participated in “Visit Nepal Year 1997” and spread good word all over to promote “Nepal Tourism Year 2011” as well. We joined hands with the organizers of Asian Mountain Bike championship in 2008 by offering special fares to the participants all around the world. In addition, we organized a big puja same year to introduce Lumbini to the pilgrims from all around the world. This year, we are going to sponsor the famous Nepali musical group “Sur Sudha” to perform in Thailand. <br />
	<br />
	<br />
	<strong>How cooperative are the Nepali Government institutions in helping meet the demands from this market? <br />
	</strong> <br />
	Thai Airways has been getting a very constructive support from the government bodies in Nepal. This is one of the reasons behind our uninterrupted service for the past 44 years. We have always been able to bring into operation the required number of flights connecting Kathmandu and Bangkok as per our market demand. This cooperation is good for both the countries in terms of tourism, economy, education and other sectors. We are thankful to the Nepal Government, NAC, CAAN, TIA, ATC, NTB, NATTA and PATA for the continued support extended towards THAI. <br />
	<br />
	<br />
	<strong>Most of the flights made to Nepal are targeting migrant workers. How sustainable is this policy? <br />
	</strong> <br />
	Labor traffic does not occupy a major business of our flight operations, it is only a partial business of our total occupancy. Since the very beginning, we have had different segments of traffic like the royalties, frequent flyers, government officials, diplomats, expats, students and the tourists. Labor traffic is also part of our business but as I said we don’t depend heavily on it. <br />
	<br />
	<br />
	<strong>What are the operational difficulties and facilities in Nepal? <br />
	</strong> <br />
	Lack of proper infrastructure, unstable government, political instability and unhealthy competition among budget airlines are the drawbacks hindering smooth operation of the renowned carriers such as THAI. <br />
	<br />
	<br />
	<strong>Operating in Nepal is said to be cheap. What is your experience? <br />
	</strong> <br />
	We do not think operating in Nepal is cheap. On the contrary, it is one of the most expensive in terms of ground handling, parking and landing, ground space, rental, ramp, fuel and all kind of other charges. <br />
	<br />
	<br />
	<strong> How are you managing your ground handling staff and crew members? <br />
	</strong> <br />
	THAI has its own handling service in Nepal. It has never compromised in quality services; therefore, we have our own operational, ground handling and administrative staff directly under the THAI set up of course. <br />
	<br />
	<br />
	<br />
	<br />
	<br />
	<strong><br />
	</strong></p>
<p>
	<strong>GSAs that Fuel the Business <br />
	<br />
	<br />
	By Gaurav Aryal </strong><br />
	<br />
	<br />
	Around 85 per cent of international airlines operating in Nepal have made their presence felt through a number of GSAs <br />
	<br />
	<br />
	International airline companies operating in Nepal prefer having a presence through their General Sales Agents (GSA) rather than having their local office stationed in the country. Around 85 per cent of international airlines operating in Nepal have made their presence felt through GSAs. Out of the 28 international airlines currently in operation, only four of them, namely Thai Airways, Air India, Qatar Airways and Etihad Airways have their country offices in Nepal. A source at a leading travel agency under the condition of anonymity said “It’s not only offline but also the online airlines that are operating through their GSAs in Nepal.” <br />
	<br />
	<br />
	Sunil Sharma, Managing Director at Society Travel Service Pvt Ltd said that offline GSAs could be of any number as travel agents have Special Prorate Agreement (SPA) with offline airlines on a code sharing basis. He said that such offline airlines carry transit passengers flying from Nepal to various sectors and destinations around the world. Sharma, who is also a GSA of RAK Airways said, “It would be a major headache for airline companies to have their office setup here and run after various things ranging from policies to issues regarding aviation fuel. The airlines feel it would be a waste of time as the documentation procedure here is difficult along with the bureaucratic hassles. GSAs have the knowhow about local issues and it would be easier for the airlines to operate through GSAs who are handed over with specific duties and responsibilities.” <br />
	<br />
	<br />
	Similarly, it is believed that the GSAs have a greater knowledge on the local market as they are the local partners that have been in existence for a long time. “GSAs bear expenses, mobilise local staff, have detailed information about the local market, and having a GSA is cost effective than having an airline office established here. So, the international airlines prefer having GSAs rather than setting up their local offices of their own,” said the source. GSAs, usually the agent for sales of air tickets, are also the partner for marketing the airlines they represent. The source said that airlines and agents in Nepal jointly carry out marketing campaigns for the airlines. According to the source, the travel agencies are lured to work as GSAs because they receive override commissions along with additional commissions and other benefits like travel certificates, and staff trainings among others. Sharma also said that GSAs work on override commission and set up office, hire staff required at the corporate office and even at the airport. However, ground handling is not allowed to be performed by GSAs as it is taken care of by Nepal Airlines Corporation for every airline other than Thai Airways and Air India. “The majority of the clientele of GSAs are anybody going abroad, be it tourists, migrant workers, students, business persons, visitors, expatriates and everybody else who is travelling,” said a source at a leading travel agency. The source added that the ratio of Nepalis to foreigner passengers is 75:25 per cent. Sharma said that the companies that work as GSAs for passenger segment are also the Cargo Sales Agents (CSA) with the respective airlines. Sources said that GSAs have been operating in Nepal for over three decades now. <br />
	<br />
	<br />
	However, sources said that it is difficult to exactly pin point the size of the GSA market and their respective market share because everything depends on the demand and supply of flights. They added that the demand and supply keeps on varying constantly. <br />
	<br />
	<br />
	The number of international air passengers flying to and from Nepal has increased over the years and so has the number of flights. In the first three months of this year, 717,182 international air passengers travelled via Nepal. According to the data of Nepal Tourism Board, 207,961 tourists arrived in Nepal via air route from January to April 2012. It is a 23.1 per cent increment from 168,958 tourist arrival during the same period of 2011. The major reason behind the increment in air passengers is the increase in tourist inflow and migrant workers going abroad in search of job opportunities, according to Ratish Chandra Lal Suman, General Manager at Tribhuvan International Airport. President Tours and Travels (PTT) represents around half-a-dozen airlines as their GSA. Gulf Air, Qantas Airways, Kenya Airways, United Airlines, Air Mauritius, Indigo Air are some of the airlines that it represents but PTT is the passenger sales agent for United Airlines and Indigo Air. Similarly, Zenith Travels Pvt Ltd, another travel agency represents Bahrain Air, Sri Lankan Airlines, Spice Jet, Turkish Airlines and Qatar Airways Cargo as their GSA. <br />
	<br />
	<br />
	<strong>New Airlines in Nepali Sky <br />
	<br />
	<br />
	By Dipa Baral <br />
	</strong><br />
	<br />
	AirAsia X has already started operations while Malaysia Airlines and BB Airways are planning to operate international flights from September this year <br />
	<br />
	<br />
	Nepal is on the way to become an international air hub, thanks to the rise in the number of tourists and labour traffic in the past few years. AirAsia X, the budget carrier of AirAsia, has already started operations from July 4 this year while Malaysian national carrier Malaysia Airlines and Kathmandu based BB Airways are planning to operate international flights from coming September. Besides, some prominent countries have shown interest to sign Air Service Agreements (ASAs) or to review the past ASAs with Nepal. AirAsia X has started scheduled flights between Malaysian capital Kuala Lumpur and Kathmandu two times a week i.e. Tuesdays and Thursdays and has plans to add two more flights from September this year. The airline has priced its ticket at Rs 11,000 (exclusive of taxes) for one way trip. “The ASA between Nepal and Malaysia allows Malaysian airliners to operate 21 flights a week. But, AirAsia X has taken the permission to operate seven flights a week at the most,” said Suresh Acharya, Head of Air Services Agreement, Airlines and Airport Operation Division at the Ministry of Culture, Tourism and Civil Aviation (MoTCA). <br />
	<br />
	<br />
	BB Airways, promoted by TBI Group of Non Resident Nepalis (NRNs) in Japan, will also operate flights from September 13 this year. The company has already brought a Boeing 757-200 (ER) on wet lease that will operate nine flights a week to Doha and Malaysia. “We will bring another aircraft of the same category after a month of our formal operation and operate 17 flights a week,” said Shishir Bhatta, CEO of BB Airways. The company will also add Singapore and Bangkok to its destinations after getting another aircraft on lease. <br />
	<br />
	<br />
	BB Airways had acquired a license for international operations from the MoTCA in the first week of January 2012. “We are aiming to promote Nepali identity all over the world through our international air service and aspire to place Nepal in the global travelling map,” said Bhatta. The airways has not made public its flight rates yet but informed that the ticket booking will be available both online and via travel agencies. <br />
	<br />
	<br />
	The third airline in the pipeline to commence international air service in Nepal is Malaysia Airlines, the national flag carrier of Malaysia. “It’s been more than a year since Malaysia Airlines obtained operating license from the ministry. It has plans to start flights from coming September,” said Acharya. The airline has a permission to operate seven flights a week between Nepal and Malaysia. Similarly, four countries— Vietnam, America, Australia and Indonesia—have shown interest to sign ASAs with Nepal while United Kingdom (UK), Jordan, Pakistan, Bhutan and United Arab Emirates (UAE) want to review their past ASAs. “We have not been able to translate the talk into action because of Nepal’s vague stance on fifth freedom. When the world is practicing freedom right up to the ninth, we are still arguing over granting fifth freedom right,” said Acharya. In December 2010, the government had to bar Air Arabia from exercising its fifth freedom right to fly on the Kathmandu- Kuala Lumpur sector at the eleventh hour following pressure from Nepal Airlines Corporation (NAC). The national flag carrier had claimed that the decision will make serious impact on its business. The case is now pending in the Supreme Court. “Rather than restricting the government from signing deals with international airlines, it must concentrate on its own capacity building and adopt aggressive marketing strategy,” said Acharya. He underscored the need of networking, partnership and alliance with other airlines to sustain in the present world. However, if NAC had believed that Air Arabia’s fifth freedom right would jeopardise its existence, it is yet to see what impact the entry of these three new airlines will make. “Once the new airlines commence operation, the competition will become even tougher because they will certainly end NAC’s monopoly in catering to the labour traffic. But, we cannot hold the market for NAC as the country has been practicing liberal sky policy. It is high time that NAC improved its services and got ready for competition,” said Acharya. <br />
	<br />
	<br />
	The MoTCA has also issued a 45-day public notice on May 25 inviting domestic operators to apply for international operation. The notice has invited applications for a chartered and a cargo flight each. Companies having paid-up capital of Rs 500 million and security bond of Rs 5 million can apply for the license by paying Rs 50,000 to the ministry and avail the document of Terms of Reference (ToR). The companies should also pay Rs 50,000 per route as royalty. <br />
	<br />
	<br />
	“So far, Siddartha International Airlines has applied to operate a chartered flight. But we hope to get some more applications as there is still enough time to apply,” said a high level official at the MoTCA. <br />
	<br />
	<br />
	<strong>Five Airlines: One Destination <br />
	<br />
	<br />
	By Sushila Budhathoki </strong><br />
	<br />
	<br />
	Nepal experienced the formal beginning of aviation in 1949 when a lone 4-seater Indian Beechcraft Bonanza aircraft arrived in Kathmandu <br />
	<br />
	<br />
	With 27 per cent arrivals and 14 per cent departures out of the total passenger movement in the year 2011, the airline companies originating from India contribute a large chunk of the international passenger movement in Nepal via its flights to Kathmandu. According to the TIA passenger manifest, the airlines from India registered passenger arrival numbering 354,738 out of the total of 1,292,515 passengers that landed in Nepal and 377,867 departures out of the total 1,407,512 departing passengers. Nepal experienced the formal beginning of aviation in 1949 when a lone, 4-seater Indian Beechcraft Bonanza aircraft arrived in Kathmandu. And after a decade, Himalayan Aviation Dakota had the first charter flight between Calcutta (now Kolkata) and Kathmandu. Airlines from India came into business operation from 1953. More than half-a-century of existence in the Nepali sky, Indian airliners still prove to be among the leading carriers that bring substantial number of passengers to Nepal. Ranjan Pokhrel, Head of the International Relations Department at CAAN, says, “If we look into the history of Nepali aviation, we find that the Indian airliners have made a significant contribution to Nepal’s aviation development.” He adds, “Indian airliners are important not only for the aviation sector but also to the economic, social and cultural aspects of Nepal. They are contributing towards providing transport facilities, bringing Indian tourists and strengthening the high level political relationship between Nepal and India from the beginning.” Currently, there are five Indian carriers - Air India, Jet Airways, Jet Lite, Indigo Airlines and Spice Jet - operating between Nepal and India. Kingfisher Airlines, once a major operator on the Kathmandu-Delhi route, has postponed its many international flights including the Kathmandu sector. Air India now operates 32 flights in a week which includes a daily flight between Kathmandu and Delhi and 4 flights a week on the Kathmandu-Kolkata and Kathmandu-Banaras routes. Similar is the story of another Indian carrier Jet Airways which operates a daily flight each on the Delhi-Kathmandu and Mumbai-Kathmandu sectors. Jet Lite, Spice Jet and Indigo have one flight each on the Delhi-Kathmandu route on a daily basis. <br />
	<br />
	<br />
	Nepal Airlines Corporation (NAC), the only Nepali airlines which pioneered flights to Indian cities has now postponed its flights since November 2011. It used to fly to Patna, Calcutta, Mumbai and Bangalore earlier. In the last two decades, NAC has not added any new aircraft. Pradip Karki, Director of Traffic Management at NAC, however, assures that flights to Indian destinations will resume soon. He says NAC must resume flights to India with a new fleet and the government should support the idea. He adds, “We have discussed and signed an MoU with the aircraft manufacturing company to either buy or lease aircraft. There may be Airbus A320 - a 150 seater or A330 - a 250 seater that will operate flights to India in the future.” Most Indian carriers are said to be low cost carriers (LCCs) when compared to other airlines. The fare for the economic class seats starts at Rs 6,300 while business class seats cost a maximum of Rs 34,000 on the Kathmandu-Delhi route. Many other international airlines have started to fly in the same route and the competition has grown stronger. TK Saha, the Country Manager at Air India says that his team is happy with the sector. “In spite of severe competition by other international airlines as well as Indian competitors, we are maintaining and operating our flights with an average of 74 per cent occupancy,” he adds. <br />
	<br />
	<br />
	Nepali and Indian aviation authorities reviewed the Air Service Agreement (ASA) in 2009 to permit Nepali airline companies to fly 24 destinations in India. As per the reviewed ASA, airlines from Nepal can incre',
			'published' => true,
			'created' => '2012-08-10',
			'modified' => '2012-08-22',
			'keywords' => '',
			'description' => 'The flow of international passengers in the first quarter of 2012 has been impressive enough to raise optimism among the concerned stakeholders. The statistics between January and March 2012 is an indication that international air service and passenger movement to and from Nepal is set to register a significant increase this year compared to 2011.',
			'sortorder' => '550',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 13 => array(
		'Article' => array(
			'id' => '642',
			'article_category_id' => '40',
			'title' => 'Infrastucture :The Basis To Development',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	<img align="left" alt="cover story" border="1" height="431" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/infra.jpg" style="margin:10px; padding:10px;" vspace="10" width="390" />The state of infrastructure in Nepal is far from promising at present, observe experts. While the government is primarily responsible for developing infrastructure in the country, it has more or less failed to live up to expectations largely due to its incapability of making use of available resources and money power. The governmentâ€™s inability to use the management acumen of the private sector has made matters worse. In recent times, the private sector has made its presence felt in developing infrastructure at its own level, especially in the communication and hydropower sectors.</p>
<p>
	According to the world global competitiveness report, in 2009/10, Nepal was placed in 131st position out of 133 countries in the quality of infrastructure. In 2010/11, Nepalâ€™s position further declined to 139th position, the lowest in the fray. This shows a severe need of quality infrastructure and upgrade of the existing ones in the country.</p>
<p>
	However, figures for basic infrastructure in other sectors are miserable, to say the least. At present, 890 people use one kilometre of road while 87 per cent of energy demand is still met through traditional sources. The government has prioritised infrastructure development from the beginning of planned development in 1956. Nepal spends around 60 to 70 per cent of around Rs 11 billion GDP annually, for infrastructure.</p>
<p>
	<strong>Private Sector Participation</strong></p>
<p>
	Private sector participation in development of physical infrastructures was formally realised only with the promulgation of act that facilitated private sector investment in 2006. From 1990 to 2007, the private sector invested US$ 404 million in just eight projects of low income category according to World Bank statistics. Out of these, five were in energy and three in telecom sector. The government realising the importance of the private sector involvement in developing infrastructure projects has adopted models like BOT (Build-Operate- Transfer), BOOT (Build-Own-Operate- Transfer), Design-Build-Operate (DBO), Design-Build-Maintain (DBM) etc. These models are in use for foreign partnerships mostly in hydropower projects.</p>
<p>
	 </p>
<p>
	 </p>
<p>
	 </p>
<p>
	<img align="middle" alt="cover story" border="1" height="125" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/cove5.jpg" vspace="5" width="200" /></p>
<p>
	<strong>Public-Private Partnership</strong></p>
<p>
	While the government suffers from capital crunch, the private sector has a profit maximising motive on top of its agenda. Therefore, a model of public-private partnership (PPP) seems to be a viable proposition for infrastructure development purpose. Purusottam Man Shrestha, National Project Manager of Public-Private Partnership for Urban Environment (PPPUE) observes that PPP model remedies the weaknesses of developing projects independently by the private sector or government. He adds, â€œIn the course of maximising profit, the private sector may disregard the interest of general public where the profit tends to get low.</p>
<p>
	Similarly, public sector is not seen as efficiently handling the projects and managing them, which can be best done by the private sector. The model of PPP can create a win-win situation for both the private and public sector partners.â€ With this model of development, possible losses can be minimised with the government backing while revenue collection can be best utilised with prudent management skills. In Nepal, few projects in sectors like drinking water, waste management, urban sanitation, solar street lights, bio-gas, urban transportation management like parking space, bus terminal management etc are under consideration, according to Shrestha. All these are projects are at a micro level, mostly developed in coordination with local government-like municipalities.</p>
<p>
	Large projects under PPP model like Kathmandu-Terai Fast Track, West-Seti A 750 MW project etc have been much discussed but are yet to see the daylight. Shrestha believes projects of small nature can be most suitable at the moment considering the financing capacity of the private sector. Solid waste management, drinking water, health related waste management, transmission line are taken as the best projects under this model.</p>
<p>
	Health and education are two other sectors that are considered appropriate for this model. R B Rauniar, the Managing Director of Interstate Multi-Modal Transport Pvt Ltd opines PPP is the best model of infrastructure development where there is a possibility of generating revenue as well as the development of basic infrastructure. He further says the frequent changes in policy and lack of national commitment on the political parties and leaders in the government has become the largest barrier for this model to be successful. Experts believe Nepal is yet to make preparations and work out so that this model will be the method of developing required infrastructures for the country.</p>
<p>
	<strong>Physical Infrastructures <br />
	</strong></p>
<p>
	Whether the private sector will invest or not in the development industry is dependent on the suitable investment climate and market for a particular infrastructure. The private sector can invest and develop in physical infrastructure like roads where there are alternatives. Alternative and fast track roads, bridges carry potential for private sector where they collect toll from the users. But private sector road developments like toll roads need huge investment which is difficult to manage by the business community alone.</p>
<p>
	In hydropower and communication sector, there has been encouraging private sector participation. Small and midsized hydropower projects are being developed by this community. In the communication sector, there are large players like Ncell, UTL, and new comers like Smart Telecom and Hello Nepal making their strong presence. Mega projects like the new international airport at Nijgadh in Bara, Kathmandu-Terai expressways and railway lines, mega hydro projects etc are not less viable. The proposed new international airport at Nijgadh could be one of the promising projects.</p>
<p>
	<strong><img align="left" alt="cover story" border="1" height="200" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/serv.jpg" style="margin:10px; padding:10px;" vspace="10" width="300" />Service Infrastructures <br />
	</strong></p>
<p>
	The private sector is seen active in developing and operating service infrastructures that are much needed for the general public. Private schools, colleges and hospitals have set a level of quality of services which their public counterparts are unable to compete with. Shrestha said that the issues witnessed in these sectors like over commercialisation can be solved if the PPP model can be used in these areas. He said that this model will help to expand the service over a larger area and larger group of service recipients. This model prevents these basic services from being too profit oriented.</p>
<p>
	<strong>Prospects <br />
	</strong></p>
<p>
	The private sector is demanding the development of basic infrastructure, however, very little is heard about the private sector taking initiative in sizeable physical infrastructure projects. Manakamana cable car is one prominent exception in this regard. In fact this project stands testimony that Nepalâ€™s private sector can develop infrastructure projects into profitable ventures. Experts believe there are numerous possibilities where private sector investors can take infrastructure as an investment opportunity. Small and medium projects in urban areas related to parking space, waste management and drinking water are attractive for this sector and identified as easy to develop too, according to Shrestha.</p>
<p>
	There are projects that garner profitable returns similar to that of any other business endeavours they have been traditionally carrying out. Some believe that development projects can be independently carried out by the private sector while some disagree with it. The latter opine that hard infrastructure development is the primary function and duty of the government. Till date, only 300 MW of total installed capacity of hydropower is produced but the demand is for 1100 MW. Besides, there is a huge market in India too. This underlines a great potential and demand for physical infrastructure.Pradeep Gangol, the Executive Manager of the Independent Power Producersâ€™ Association (IPPAN) reasons, â€œThe private investment is all the more important in poor countries like Nepal, which have limited resources to invest in infrastructural sectors like power, telecommunication, and transportation. If the private sector invests in hydropower, the government can allocate more funds for sensitive sectors like health and education.â€</p>
<p>
	<strong>Bottlenecks</strong></p>
<p>
	The biggest problem that infrastructure development faces is the financing issue. With the interest rate tremendously high, the rate of return becomes too low for anybody to find an interest in financing infrastructure projects.</p>
<p>
	Gangol says that time consuming procedure to acquire approval for forest use, environmental approval, procurement and use of explosives and land acquisition for projects also make it difficult to initiate projects. In the hydropower sector, the major problem is the constant price offered by Nepal Electricity Authority (NEA) to independent power producers for the last ten years while the bank interest rates are going up continuously.</p>
<p>
	<strong>The Way Forward</strong></p>
<p>
	The private sector players accept they are not in a position to develop large scale physical infrastructure at present. Availability of capital to finance these projects is the major hurdle. Though the business community has realised the potential of investing in infrastructure, they are doing so only in areas like hydropower and telecommunication. If the private sector is allowed to bring in foreign soft loan, developing large hydropower or similar revenue generating projects will be possible.</p>
<p>
	Similarly, Shrestha suggested that the donor agencies should involve themselves in PPP financing as well in addition to financing government projects like the ones at present. The Nepali financial market is still not oriented to PPP projects or infrastructure development. So a special tool can be devised for collecting capital from this market.</p>
<p>
	Similarly, general public can also be encouraged to invest in infrastructure projects. The governments in the developing countries like Nepal mostly have the budgetary constraints to commence the development projects. Therefore, PPPs can prove to be the alternative source of infrastructure investment. To attract and invite the private sector, first of all, the government must devise a viable project and put a certain amount of money.</p>
<p>
	Development partners too must look at such projects along with the government projects which will also help make greater impact of the donor funding. It is definite to take few more years when the private sector will gain confidence and prepare itself to develop infrastructure. Though there are hopes and prospects, it is certain that much time is required to see if private sector owned development projects actually become a reality. &nbsp;</p>',
			'published' => true,
			'created' => '2012-02-24',
			'modified' => '2012-08-23',
			'keywords' => '',
			'description' => 'In 2009/10
Nepal was
placed in 131st
position out of
133 countries
in the quality of
infrastructure.
In 2010/11,
Nepalâ€™s position
further declined
to 139th position.Projects of small
nature can be
most suitable
at the moment
considering
the fi nancing
capacity of the
private sector.',
			'sortorder' => '542',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 14 => array(
		'Article' => array(
			'id' => '641',
			'article_category_id' => '40',
			'title' => 'The Government Should Play A Proactive And Facilitating Role',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	Pradeep Gangol is the Executive Manager of the Independent Power Producers Association, Nepal (IPPAN). IPPAN has been consistently advocating and lobbying for investor friendly environment in Nepalese power development. Gangol is also a senior hydropower engineer and has more than two decades of experience to his credit in planning, surveying and designing of hydropower projects. During his long career, he was also involved in the reconnaissance and feasibility level design of micro and small hydropower projects, river training projects and slope stabilisation projects. In an interview with New Business Age, Gangol shared his views on prospects and constraints of developing hydropower based on private sector investment.</p>
<p>
	<strong><img align="left" alt="cover story" border="1" height="500" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/cove4.jpg" style="margin:10px; padding:10px;" vspace="10" width="378" />What is the prospect of private sector investment in Nepalese hydropower sector?</strong></p>
<p>
	The prospect of private sector investment in Nepaleses hydropower sector is indeed great. The enormous power potential in Nepal and the huge market for it, both domestically and in neighbouring countries make Nepal a lucrative destination for domestic and international investors. The private investment is all the more important in poor countries like Nepal, which have limited resources to invest in infrastructural sectors like power, telecommunication and transportation. If the private sector can invest in hydropower, the government can allocate more funds for sensitive sectors like health and education. However, the government of Nepal has to do a lot to improve the investment climate in Nepal so as to lure investors to invest in Nepalese&nbsp; hydropower sector.</p>
<p>
	<strong>Hydroelectricity sector has been attracting some private investors for developing projects. How can the private sector investors be encouraged to invest further in this sector? <br />
	</strong></p>
<p>
	The Government of Nepal has to think in a more liberal way and announce a series of incentives that will make Nepalese power sector the most lucrative for investment in the world. Such measures/incentives will eventually lead to the construction of numerous small, medium and large hydropower projects all over Nepal, and help create employment for millions of people. It will also generate billions of rupees, through royalties, for the government and local DDCs and VDCs and help local people become prosperous through purchase of shares. Besides, it can accelerate local development through CSR activities like access roads, heath posts, schools, trails, irrigation canals, vocational and technical training etc. The government should keep in mind that investment will flow where there is an opportunity for profit.</p>
<p>
	<strong>Is it the issue of returns or are there any other reasons for private sector being hesitant to invest in infrastructure? <br />
	</strong></p>
<p>
	In spite of enormous potential for hydropower development in Nepal and possibility of huge power market in India, investors are still shying away from investing into Nepalese power sector. Besides rate of return issues, Nepal has to make sure that it has open access to the Indian market through a government-to-government agreement.</p>
<p>
	And the government has to assure that there will be policy stability at least for a reasonable period of time, say 10 years. Last year, for example, the department of electricity development (DoED) made changes in its rules and regulations four times within a year. Such frequent changes in rules and regulations and policies do not help in enthusing investors to invest in Nepalese power sector. Furthermore, it is a very time consuming process to acquire documents related to forest clearance, EIA, procurement and use of explosives. Land acquisition for projects is also equally difficult. Now-a -days, it is becoming increasingly difficult to manage local expectations.</p>
<p>
	<strong>Do you see the possibility of developing projects independently by private companies? <br />
	</strong></p>
<p>
	Nepali power companies can develop small power projects (up to 25 MW) independently. For bigger projects, however, they have to enter into joint ventures with foreign power companies or investors. The government should encourage more and more domestic investors to invest in hydropower, by way of equity investment.</p>
<p>
	<strong>Why do you think commercial banks are hesitating to invest in this sector?</strong></p>
<p>
	It is a very strange situation that though Nepal is facing an unprecedented 19 hoursa- day of load shedding, the commercial banks are reluctant to invest in the power sector. The main reason is that the power purchase agreement (PPA) rates have remained virtually stagnant over the last 10 years. During the same period, the prices of construction materials like cement, steel rods, copper wire, fuel costs, and labour charges have increased exponentially.</p>
<p>
	To make matters worse, the bank interest rates have also increased from 10 per cent to 15 per cent. The government is still hesitant to make suitable adjustments in PPA rates and thats why the PPA rates reflect market conditions. For example, if a farmer finds that the cost of producing potatoes is Rs 20 per kg as against the market price of Rs 16 per kg, s/ he will rather invest in producing other crops that ensure better rates of return. This is the reason for which the commercial banks are reluctant to invest in the power sector.</p>
<p>
	<strong>What are the challenges for investors after developing a project? <br />
	</strong></p>
<p>
	The challenges for investors to invest in Nepalese power sector are many. The tariff rates do not reflect market conditions while the bank interest rates are still high. It is difficult and time consuming to overcome bureaucratic hassles to acquire documents related to forest clearance, EIA report, procurement and use of explosives etc. Land acquisition is another problem that the investor is finding increasingly difficult to cope with. Policy changes are frequent, more often to discourage the investors. And lastly, it is becoming increasingly difficult to cope with the management of local expectations.</p>
<p>
	<strong>How do you expect the government to play a role so as to invite more private investors in this sector? <br />
	</strong></p>
<p>
	The government has to make appropriate changes in the electricity act and policies so as to instil confidence in investors. There should be an electricity regulatory commission that will create a level playing field for both private and public sectors. The government should make adjustment in power tariff so as to ensure reasonable rate of return. If needed, it should think about VAT exemption to make the power sector most lucrative in Nepal. The objective of the whole exercise should be to lure general public (through shares), investors, and banks to invest enthusiastically in the power sector. There should be policy stability for at least 10 years. Furthermore, a new department of clearance can be established under the energy ministry to ensure that all documents are processed within a month. The government should play a proactive and facilitating role in acquiring land for projects and managing local expectations.</p>
<p>
	<strong>How do you find the government's role in ending the energy crisis at the earliest and accelerate power development in Nepal?</strong></p>
<p>
	Nepal is facing unprecedented load shedding of 19 hours a day which is a serious problem. But the government does not seem to be as serious as the grave situation demands. The measures announced by the government seem to be piecemeal, rather than announcing all the needed measures at once. The present power crisis, if continued any longer, will eventually put our entire economy to a grinding halt. Therefore, the politicians have to become more serious in solving Nepalese power problems. &nbsp;</p>',
			'published' => true,
			'created' => '2012-02-24',
			'modified' => '2012-08-23',
			'keywords' => '',
			'description' => 'Pradeep Gangol is the Executive Manager of the Independent Power Producers Association, Nepal (IPPAN). IPPAN has been consistently advocating and lobbying for investor friendly environment in Nepalâese power development. Gangol is also a senior hydropower engineer and has more than two decades of experience to his credit in planning, surveying and designing of hydropower projects.',
			'sortorder' => '541',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	)
)
$current_user = null
$logged_in = false
include - APP/View/Elements/side_bar.ctp, line 60
View::_evaluate() - CORE/Cake/View/View.php, line 971
View::_render() - CORE/Cake/View/View.php, line 933
View::_renderElement() - CORE/Cake/View/View.php, line 1224
View::element() - CORE/Cake/View/View.php, line 418
include - APP/View/Articles/index.ctp, line 157
View::_evaluate() - CORE/Cake/View/View.php, line 971
View::_render() - CORE/Cake/View/View.php, line 933
View::render() - CORE/Cake/View/View.php, line 473
Controller::render() - CORE/Cake/Controller/Controller.php, line 968
Dispatcher::_invoke() - CORE/Cake/Routing/Dispatcher.php, line 200
Dispatcher::dispatch() - CORE/Cake/Routing/Dispatcher.php, line 167
[main] - APP/webroot/index.php, line 117

Warning (2): simplexml_load_file() [<a href='http://php.net/function.simplexml-load-file'>function.simplexml-load-file</a>]: I/O warning : failed to load external entity &quot;&quot; [APP/View/Elements/side_bar.ctp, line 60]Code Context//    $file = 'http://aabhiyan:QUVLg8Wzs2F7G9N7@nepalstock.com.np/api/indexdata.xml';



    if(!$xml = simplexml_load_file($file)){
$viewFile = '/var/www/html/newbusinessage.com/app/View/Elements/side_bar.ctp'
$dataForView = array(
	'articles' => array(
		(int) 0 => array(
			'Article' => array(
				[maximum depth reached]
			)
		),
		(int) 1 => array(
			'Article' => array(
				[maximum depth reached]
			)
		),
		(int) 2 => array(
			'Article' => array(
				[maximum depth reached]
			)
		),
		(int) 3 => array(
			'Article' => array(
				[maximum depth reached]
			)
		),
		(int) 4 => array(
			'Article' => array(
				[maximum depth reached]
			)
		),
		(int) 5 => array(
			'Article' => array(
				[maximum depth reached]
			)
		),
		(int) 6 => array(
			'Article' => array(
				[maximum depth reached]
			)
		),
		(int) 7 => array(
			'Article' => array(
				[maximum depth reached]
			)
		),
		(int) 8 => array(
			'Article' => array(
				[maximum depth reached]
			)
		),
		(int) 9 => array(
			'Article' => array(
				[maximum depth reached]
			)
		),
		(int) 10 => array(
			'Article' => array(
				[maximum depth reached]
			)
		),
		(int) 11 => array(
			'Article' => array(
				[maximum depth reached]
			)
		),
		(int) 12 => array(
			'Article' => array(
				[maximum depth reached]
			)
		),
		(int) 13 => array(
			'Article' => array(
				[maximum depth reached]
			)
		),
		(int) 14 => array(
			'Article' => array(
				[maximum depth reached]
			)
		)
	),
	'current_user' => null,
	'logged_in' => false
)
$articles = array(
	(int) 0 => array(
		'Article' => array(
			'id' => '870',
			'article_category_id' => '40',
			'title' => 'Now Is The Challenge Of Getting Right Reinsurer At A Competitive Price',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	<strong style="color: rgb(35, 200, 250); font-size: 16px; text-align: right;">‘When the losses start decreasing, the premium will come down’</strong></p>
<p style="text-align: justify;">
	<strong><img align="right" alt="Kewal Krishna Shrestha, Everest Insurance" height="316" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/kewal_cover_feb2013.jpg" style="margin: 0 0 0 10px;" width="250" /></strong></p>
<address style="text-align: right;">
	<strong>Kewal Krishna Shrestha&nbsp;</strong></address>
<address style="text-align: right;">
	<strong>President, Nepal Insurers Association &amp;</strong></address>
<address style="text-align: right;">
	<strong>CEO, Everest Insurance</strong></address>
<p style="text-align: justify;">
	<strong><br />
	</strong></p>
<p style="text-align: justify;">
	<strong>What is the size of the aviation insurance market in Nepal?</strong></p>
<p style="text-align: justify;">
	The market size is around Rs 420- 500 million in terms of the premium we collect from our clients.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What about your company’s stake in the market?</strong></p>
<p style="text-align: justify;">
	We own around 25-30 per cent share in Nepal’s aviation insurance market.&nbsp;</p>
<p style="text-align: justify;">
	<strong>It is said that some insurance companies are trying to form a pool to collectively handle the claims on aviation insurance. Are you aware of the latest progress in this regard?</strong></p>
<p style="text-align: justify;">
	I don’t think the pool is what we need to improve the aviation insurance business. Now we are competing to get the lowest rate from reliable companies (reinsurers) but if such a pool is formed, there would be monopoly in the insurance market and there would be no competition. Insurance companies could syndicate the aviation insurance business and the situation could worsen further. The premium will be at a high rate and the airliners will raise the ticket price which in turn will make air travelling difficult. It seems beneficial to all of us but if we view it minutely it is only a means of syndicating that could affect the whole country economically. &nbsp;</p>
<p style="text-align: justify;">
	However, if such pool is sure to be formed we could form this pool in two ways. One, we can calculate certain risks in the aviation industry and other, we can focus on the risks involved in the hull, baggage etc. However creating such a pool needs lots of vision.&nbsp;</p>
<p style="text-align: justify;">
	Beema Samiti recently organized an interaction programme on the possibilities of merger between &nbsp;insurance companies. This interaction was a good initiation in the insurance business but I think both the government and Beema Samiti should be well prepared on it. It needs lots of homework and researches whether to form a pool or to merge the insurance companies.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What future do you see for the aviation insurance business in Nepal?</strong></p>
<p style="text-align: justify;">
	The prospects of aviation business in Nepal depend on the growth of the airliners. The more airlines are there, the better for the aviation insurance business. The theory of demand and supply is applied in the aviation business also. Many airlines are not functioning well and some of them have registered but have not started their operation yet. If new airliners start operating it would benefit both the airliners and the aviation industry. &nbsp;Development of airports and runways in a sustainable way can also sustain airliners. And the development of airliners ultimately grows the aviation insurance business. Since there is a lot of prospects in the tourism sector, I see bright future of aviation insurance business.&nbsp;</p>
<p style="text-align: justify;">
	<strong>Aviation insurance premium in Nepal is said to be one among the highest in the world? Why is it so high?</strong></p>
<p style="text-align: justify;">
	No, I disagree with this. We used to pay 8-9 per cent premium some 10 years ago and we were able to reduce that as low as 2 per cent later. Now again the reinsurance companies are charging the same old rate or even higher. It is mainly because of the risk factors in the aviation industry of Nepal and I don’t think it is unjustifiable. The terrain, safety measures in the aviation industry in Nepal and lack of maintaining safety standards by all the stakeholders involved in the aviation industry are some of the reasons behind the increment of premium. We lack the standard safety measures in spite of ICAO advice.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What do you expect from the Beema Samiti or the government for that matter to facilitate the aviation insurance business in the country? &nbsp;</strong></p>
<p style="text-align: justify;">
	The government can enforce the safety standards. It can properly manage the runways, ground handling, and certify efficiency of the people and the equipment used in the aircraft or for the aircraft maintenance. If you see how the baggage in airports is handled, you will find how improperly things are done. The baggage is loaded in tractors and the insurer has to pay if there is a damage. Furthermore, the international airport in Nepal is very crowded. I think the TIA should now be shifted to some convenient place.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What are the key challenges and issues facing the aviation insurance industry in Nepal?</strong></p>
<p style="text-align: justify;">
	Now is the challenge of getting the right reinsurer at a competitive price. The aviation business is anyway running though the reinsurers are charging up to 12 per cent. But what if they charge 20-25 per cent? I don’t think aviation in Nepal could bear such high premium rates. Moreover, the environment could be such that even the high premium might not draw reinsurers into confidence. Because of the high risk involved in this business, the reinsurers could add more clauses which could affect the overall aviation business in Nepal. And then it will be hard to find reliable reinsurers and we will have to reinsure with whichever party we find. When the claim increases, the premium market becomes hard and reinsurers hesitate to do business. And aviation insurance is driven by reinsurers. Unless the scenario of this seller-driven market changes, we won’t have any other alternative.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What needs to be done to address these challenges?</strong></p>
<p style="text-align: justify;">
	CAAN has to be strong. All the stakeholders of the aviation industry should maintain the safety standards prescribed by ICAO in terms of physical amenities, ground handling, aircraft maintenance, tracing of the aircraft personnel etc. Maintaining the safety standard is the foremost requirement. Everybody in the aviation industry should strictly follow the policies and run under rules and regulations of the government. &nbsp;</p>
<p style="text-align: justify;">
	<strong>The annual claims payout in the aviation section has been constantly rising. This is bound to further increase the already significantly high aviation insurance premium. How are we going to tackle this problem?</strong></p>
<p style="text-align: justify;">
	This is not a problem; it’s an outcome which is natural. When claims payout in the aviation sector starts increasing, increment in the premium is normal internationally. &nbsp;And when the claims start rising, the party is affected and slowly it affects other airliners. When the risk is found the reinsurer loads the premium and that is considered normal in the insurance business.&nbsp;</p>
<p style="text-align: justify;">
	When safety measures are properly followed the risk has to go down. For this, all the stakeholders in the aviation industry should come together and contribute. &nbsp;Evaluation of our work and adopting things that make this business ideal as well as searching ways of perfection in the aviation business is a must.&nbsp;</p>',
			'published' => true,
			'created' => '2013-03-16',
			'modified' => '2013-03-16',
			'keywords' => '',
			'description' => 'Now we are competing to get the lowest rate from reliable companies (reinsurers) but if such a pool is formed, there would be monopoly of the insurance companies and there would be no competition.',
			'sortorder' => '754',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 1 => array(
		'Article' => array(
			'id' => '869',
			'article_category_id' => '40',
			'title' => 'When The Losses Start Decreasing, The Premium Will Come Down',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	<strong style="color: rgb(35, 200, 250); font-size: 16px; text-align: right;">‘When the losses start decreasing, the premium will come down’</strong></p>
<p>
	<img align="right" alt="Pronab Sen, National Insurance Company Ltd" height="317" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/pronab_cover_feb2013.jpg" style="margin: 0 0 0 10px;" width="250" /></p>
<address style="text-align: right;">
	<strong>Dr Pronab Sen&nbsp;</strong></address>
<address style="text-align: right;">
	<strong>Chief Executive Officer,&nbsp;</strong></address>
<address style="text-align: right;">
	<strong>Nepal</strong><strong>National Insurance Company Ltd</strong></address>
<p>
	 </p>
<p style="text-align: justify;">
	<strong>What is your company’s stake in the aviation insurance portfolio?</strong></p>
<p style="text-align: justify;">
	We are moving very selectively in the aviation insurance in Nepal. Previously, Guna Air was 100 per cent with us and now Simrik Air has taken it over. There are some airliners which are having reinsurance support from our corporate office in India- like Buddha Air. We have around five percent market share in the aviation portfolio. Agni Air is co-insured with Shikhar Insurance – 60 percent with them and 40 per cent with us. Another airline in Pokhara has insured 49 per cent with us and 51 per cent with Shikhar. We are now negotiating with Simrik because Guna was with us. &nbsp;</p>
<p style="text-align: justify;">
	We are the direct branch of a reinsurance company in India governed by the Indian Government. We have high retention capacity. We reinsure the portion to other reinsurance companies that is beyond our financial strengths. This is a worldwide phenomenon in insurance business. It depends on portfolios and varies from risk to risk. Sometimes, we retain 20 per cent and sometimes 90- depending on the risks.</p>
<p style="text-align: justify;">
	<strong>Is it true that the insurance companies in Nepal have not been able to make profits from aviation insurance? Why?</strong></p>
<p style="text-align: justify;">
	Yes it is true. And the reason is there are a number of airliners which are very small in size. It may be also because of the weather and terrain of Nepal. Small airliners and aviation companies do not afford expertise and there are few airliners where I have seen the full expertise – this is the biggest challenges for the Nepali aviation sector. Many of the aircraft are also very old. &nbsp;</p>
<p style="text-align: justify;">
	Some of the insurance companies have retention capacity of 0.4 per cent and rest is reinsured. These companies are getting only the reinsurance commission. &nbsp;</p>
<p style="text-align: justify;">
	<strong>Some insurance companies are trying to form a pool to collectively handle the aviation insurance claims. What is your view on this proposal?</strong></p>
<p style="text-align: justify;">
	It is still in the pipeline. Nothing concrete has come out so far. But if such a pool is formed, it will help both the aviation insurers as well as the airliners. After the formation of the pool, they don’t have to run around different countries trying to find out the lowest rate. Once the pool is formed, they know that they have to approach only one office which will organize everything. And the office will be the consortium of a number of insurance companies.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What future do you see for aviation insurance business in Nepal?</strong></p>
<p style="text-align: justify;">
	The future is good because there is a tremendous growth in the tourism sector in Nepal. The tourism sector has a tremendous scope and the more this sector grows, the more the aviation sector expands. More people prefer to travel by air in Nepal considering the time taken in travelling by roads. By air you reach Pokhara in 20-25 minutes.But if you take a bus, it takes 5- 6 hours. And the growth of airliners has paved the road for growth of the aviation insurance companies.&nbsp;</p>
<p style="text-align: justify;">
	<strong>Almost whatever the insurance companies earn from the aviation segment goes to the reinsurance companies abroad. Some are even said to be making losses in the aviation segment. It is said that the companies know that they are not going to make profits from the aviation segment. But they do aviation insurance just to show high insurance premium collection. What do you say?</strong></p>
<p style="text-align: justify;">
	It is not like that. The premium is based on the past losses. If you see the statistics, almost every year there is an air crash and some years, there are around two air crashes in Nepal. And the rate of premium is governed by the reinsurance market. Because of the air accidents, some of the reinsurers were hesitant to do business in Nepal. The aviation summit last month also put forth lots of similar issues in the aviation industry- the dos and the don’ts. Beyond that, the aviation business has a very bright future.&nbsp;</p>
<p style="text-align: justify;">
	<strong>Aviation insurance premium in Nepal is said to be one among the highest in the world? Why is it so high?</strong></p>
<p style="text-align: justify;">
	Yes. As I already said, insurance premiums are based on the past losses. Because of the crashes, the premium has been rising. The recent crashes of Sita Air and Agni Air were a serious concern for the reinsurers.&nbsp;</p>
<p style="text-align: justify;">
	<strong>Are those high premium rates justifiable?&nbsp;</strong></p>
<p style="text-align: justify;">
	The loss is calculated based on the coverage offered by the insurance companies. Suppose there is a loss. You pay some percent of the loss. You pay for the hull losses and the machinery parts or you pay for the passenger liabilities. Passenger liability losses are much higher than the hull losses depending on the kind of passengers. The liability losses are much higher if the passengers are from the US or Canada, and lower if they are from the SAARC countries. The liability losses vary from people to people because of theirs living standard. While finalizing the rates, reinsurers study these things.&nbsp;</p>
<p style="text-align: justify;">
	Airliners not only fly Nepali people or SAARC people but also other foreigners. For example, most of the people in the mountain flights are from European countries. Furthermore, airliners have different premiums depending on their types, aircraft, and management facilities they have.&nbsp;</p>
<p style="text-align: justify;">
	<strong>How can we lower the high insurance premium?</strong></p>
<p style="text-align: justify;">
	It’s a million dollar question. It has to be high, otherwise it won’t be viable. We are not totally dependent on our own companies. We may not have the capacity, so we need to approach other markets for reinsurance. When the losses start decreasing, the premiums will simultaneously come down. For example in India, the fire premium rate was very high in the past. Many studies were conducted. And when they calculated the total premium over a period of time, and how much profit they generated- then the premium started coming down. Likewise, though the premium is high at the moment, it will definitely go down every year if the risk is reduced. In the present scenario, you don’t have any choice. Until the reinsurer accepts the business, how can you reinsure?</p>
<p style="text-align: justify;">
	<strong>The country’s first-ever aviation insurance summit was organized in the capital recently. How helpful was this summit?</strong></p>
<p style="text-align: justify;">
	I think it was helpful. We got to know the perspectives of different reinsurers present there. It was the first of its kind event in Nepal and was helpful for everyone involved in the aviation industry.&nbsp;</p>',
			'published' => true,
			'created' => '2013-03-16',
			'modified' => '2013-03-16',
			'keywords' => '',
			'description' => 'We have high retention capacity. We re-insure the portion to other reinsurance companies that is beyond our financial strengths.',
			'sortorder' => '753',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 2 => array(
		'Article' => array(
			'id' => '868',
			'article_category_id' => '40',
			'title' => 'Unhealthy Competition Among The Insurance Companies Should Be Stopped',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	<span style="color:#23c8fa;"><span style="font-size: 16px;"><strong>‘Unhealthy competition among the insurance companies should be stopped’</strong></span></span></p>
<p>
	<strong><img align="right" alt="Prem Bahadur Maharjan, Rastriya Beema Sansthan" height="307" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/prem_cover_story_feb2013.jpg" style="margin:0 0 0 10px;" width="250" /></strong></p>
<address style="text-align: right;">
	<strong>Prem Bahadur Maharjan&nbsp;</strong></address>
<address style="text-align: right;">
	<strong>Chairman</strong></address>
<address style="text-align: right;">
	<strong>Rastriya Beema Sansthan</strong></address>
<div>
	 </div>
<p style="text-align: justify;">
	<strong>What is your company’s stake in the aviation insurance market?</strong></p>
<p style="text-align: justify;">
	The amount of insurance is calculated in foreign currency. We own around USD 2 million business which constitutes 30 to 40 per cent of the total aviation insurance business. We are the only insurance company insuring big aircraft including jet planes. We have insured the Jet planes of the national flag carrier, Nepal Airlines, and BB Airways lately. We have succeeded in acquiring the largest proportion of insurance share in the market because national airlines is insured with us. &nbsp;&nbsp;</p>
<p style="text-align: justify;">
	<strong>Is it true that the insurance companies have not been able to make profits from aviation insurance? Why?</strong></p>
<p style="text-align: justify;">
	I don’t agree with this. &nbsp;In our case, we feel that there is some harsh competition including in the premium rates. And particularly in the private airlines sector, we have witnessed a number of air crashes. That might have contributed to the loss in the overall aviation insurance business but it is not the case of Beema Sansthan. We have not gone through such loss. Nor &nbsp;have our clients faced such air crashes.&nbsp;</p>
<p style="text-align: justify;">
	<strong>Some insurance companies are trying to form a pool to collectively handle the claims on aviation insurance. When could we see such a pool?</strong></p>
<p style="text-align: justify;">
	I have also heard about it. I guess the practice of collectively handling the aviation insurance claims is yet to materialize. It would be good if such a pool is formed. It will help prevent unhealthy competition.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What future do you see for aviation insurance business in Nepal?</strong></p>
<p style="text-align: justify;">
	I see a lot of potential for this business. &nbsp;The aviation market has grown in Nepal over the years and with it, the aviation insurance business, too, has grown. The other big reason is that Nepal is promoting tourism by organizing many events. This has increased the number of air passengers to Nepal and thus helped the aviation insurance in the country.&nbsp;</p>
<p style="text-align: justify;">
	<strong>Almost whatever the insurance companies earn from the aviation segment goes to the reinsurance companies abroad. Some are even said to be making losses in the aviation segment. It is said that the companies know that they are not going to make profits from the aviation segment. But they do aviation insurance just to show high insurance premium collection. What do you say?</strong></p>
<p style="text-align: justify;">
	In a way, it is true. Since we don’t have a strong financial institution that can cover the aviation insurance, we depend on foreign reinsurance companies. Though the percentage of commission from premium collection that we collect seems minimal, we are able to sustain the operation. Though the commission might be less in comparison to the bigger amount of insurance premium; we have other indirect benefits as well. It is because we have to reinsure &nbsp;with very reliable reinsurance companies recognized internationally. There are very few reliable reinsurance companies. Beema Sansthan has found a re-insurer based in the United Kingdom.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What do you expect from the Beema Samiti or the government for that matter to facilitate the aviation insurance business in the country? &nbsp;</strong></p>
<p style="text-align: justify;">
	There is unhealthy competition among the insurance companies at present. They tend to take the aviation insurance business at low rates ignoring the risk factors. The situation is such that some companies might collapse if something bad happens to the airlines they have insured. Moreover, I have heard that some insurance companies are even unable to pay out the claims. Beema Samiti, being the regulatory body, can set some standards to avoid such kind of unhealthy competition. Beema Sansthan is a government-owned institution. So, it does not need to jump into this unhealthy competition. Though aviation insurance is growing, almost all the premium collected here goes abroad. We get only a fraction of it as commissions. I think this is the time that Beema Samiti should form a government-owned re-insurance company in Nepal. It will help us to stop or decrease the amount of money going outside the country.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What are the key challenges and issues facing the aviation insurance industry in Nepal?</strong></p>
<p style="text-align: justify;">
	As I already mentioned, the first challenge is unhealthy competition among some insurance companies. The risk factor is also growing and it is making premiums costlier. We have witnessed many air crashes in a quite short period of time. It is not only about insurance, it is also about the safety of the people.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What needs to be done to address these challenges?</strong></p>
<p style="text-align: justify;">
	There has to be a strict monitoring mechanism for air traffic discipline. People involved in the aviation business should be given safety education. Pilots should also be alerted not to take any sort of risks.&nbsp;</p>
<p style="text-align: justify;">
	Moreover, unhealthy competition among the insurance companies should be stopped. And it could be managed since there are very limited insurance companies in the aviation sector. Furthermore, the government should try to establish reinsurance companies here in Nepal itself.</p>
<p style="text-align: justify;">
	<strong>The country’s first-ever aviation insurance summit was organized in the capital recently. How did you find this summit?</strong></p>
<p style="text-align: justify;">
	From educational point of view, the summit was quite fruitful to the people involved in the aviation insurance sector. It was successful in raising the issues related to the risk factors in the aviation insurance and about the premiums that are in practice. Such summits are helpful in making people aware about the things happening in the aviation insurance market. I expect such events to continue.&nbsp;</p>',
			'published' => true,
			'created' => '2013-03-16',
			'modified' => '2013-03-16',
			'keywords' => '',
			'description' => 'The first challenge is unhealthy competition among some insurance companies.The risk factor is also growing and it is making premiums costlier.',
			'sortorder' => '752',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 3 => array(
		'Article' => array(
			'id' => '867',
			'article_category_id' => '40',
			'title' => 'Airclaims Is A Major Resource For Nepali Civil Aviation',
			'sub_title' => '',
			'summary' => null,
			'content' => '<address>
	<strong style="text-align: right;"><font color="#23c8fa" size="3"><span style="font-style: normal;">‘Airclaims is a major resource for Nepali civil aviation’</span></font></strong></address>
<address>
	<strong style="text-align: right;"><font color="#23c8fa" size="3"><span style="font-style: normal;"><br />
	</span></font></strong></address>
<address>
	<strong>Douglas G Cavannagh</strong></address>
<address>
	<strong>Risk and Safety Manager</strong></address>
<address>
	<strong>Airclaims&nbsp;</strong><strong>(A UK-based leading reinsurance company)</strong></address>
<p style="text-align: justify;">
	<strong><br />
	</strong></p>
<p style="text-align: justify;">
	<strong>How long has your company been involved in the insurance business in Nepal?&nbsp;</strong></p>
<p style="text-align: justify;">
	Airclaims is the leading provider of claims, risk management and asset management services to the global aviation industry. Founded in 1964 Airclaims has been handling aviation insurance claims in Nepal since the late 1960s. Airclaims currently handles in excess of 2500 assignments each year though a global network of 20 offices. Airclaims is the leading provider of such expertise worldwide.&nbsp;</p>
<p style="text-align: justify;">
	In terms of Airclaims risk and safety consulting services this service offering was initially utilised by aviation insurance underwriters to assess the risk profile of different operators. The initiation of these studies was often a consequence of a serious accident or a deteriorating loss record on the part of an operator.&nbsp;</p>
<p style="text-align: justify;">
	As our capability grew these services were expanded to include risk and safety assessments of maintenance, repair and overhaul facilities, helicopter operators, ground handling companies and airports. During the past 20 years many of these services have also been utilised by petroleum and mining companies who use our expertise to assess the risk of different contractors that they use. Airclaims is now one of the leading providers of operator risk assessments in this sector. Our experience is often in demand from investors who require a bespoke due diligence study to assist them to better understand the risks associated with a potential acquisition and to provide valuations and condition surveys of aircraft to potential purchasers or those who wish to update the value of their aviation assets. We also undertake a considerable amount of work for airlines and operators who require a completely impartial assessment of their operation and a worldwide perspective to help them improve their own internal safety capability. This ranges from the initial assessment and needs analysis, to project management, training, coaching and final assessment.&nbsp;</p>
<p style="text-align: justify;">
	In today’s challenging asset management environment, the demand is for a business partner that not only has a strong reputation and broad capability but also the consistency of approach.&nbsp;</p>
<p style="text-align: justify;">
	Our integration of what are typically considered separate functions, such as project management, airworthiness oversight, powerplant services and risk management are all combined to form ten core modules, providing a unique capability&nbsp;</p>
<p style="text-align: justify;">
	<strong>How do you differentiate yourself from other companies?</strong></p>
<p style="text-align: justify;">
	We differentiate ourselves by:&nbsp;</p>
<ul>
	<li style="text-align: justify;">
		Drawing on ‘real world’ experience gained from our involvement in the aftermath of many of the largest aviation accidents and losses during the past 50 years.&nbsp;</li>
	<li style="text-align: justify;">
		Being able to recommend bespoke solutions to mitigate risk based on our work with all the different parties involved in aviation, not just airlines and operators.&nbsp;</li>
	<li style="text-align: justify;">
		Using our international experience gained from working with many different nationalities and cultures, to train and coach organisations on how to achieve the same objectives using alternative methods.&nbsp;</li>
	<li style="text-align: justify;">
		Using our exposure to accident sites and our knowledge of emergency response services to tailor procedures to the reality of what actually happens during these events.&nbsp;</li>
</ul>
<p style="text-align: justify;">
	<strong>The size of your business in Nepal at present?&nbsp;</strong></p>
<p style="text-align: justify;">
	That really depends on how often there is an accident. Unfortunately for some that has been a little too often. If there was to be a reduction in the number of accidents as a result of Airclaims providing Risk Management rather than Claims Management Services then that would be fine with us too. We are currently the preferred aviation claims handling company for the national airline and a number of domestic operators in Nepal and also most International carriers who operate services to Kathmandu. Our presence in Nepal over many decades has enable Airclaims to build up much valued relationships.&nbsp;</p>
<p style="text-align: justify;">
	<strong>Why is the insurance premium in aviation so high in Nepal?&nbsp;</strong></p>
<p style="text-align: justify;">
	There are a number of factors that affect the rate at which the insurance premium is calculated in any market. Some of those factors are loss record, operating environment and the type and value of the aircraft being insured.&nbsp;</p>
<p style="text-align: justify;">
	Nepal is undoubtedly a challenging operating environment for operators and crews in terms of terrain, weather and infrastructure and these factors do mean that along with a loss record that reflects these challenges, insurance costs will be higher. However, with improvements in infrastructure, training and operations, it is quite possible to address many of these factors and in doing so ensure that the cost of insurance is maintained at a reasonable level.&nbsp;</p>
<p style="text-align: justify;">
	There is also the factor of insurance market capacity something which cannot be directly influenced in Nepal. Worldwide, it could be said that there is a good deal of capacity i.e. insurers who want to underwrite aviation risks. Capacity and competition help keep the price down although, Nepal is seen as a higher risk region because of the factors already mentioned above.&nbsp;</p>
<p style="text-align: justify;">
	We know that all parties involved in aviation in Nepal are keen to support the improvements that are needed to ensure risk is reduced and Airclaims are ready to play its part in the provision of not just loss management services but also risk management services.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What are the challenges faced by the aviation insurance business in Nepal?&nbsp;</strong></p>
<p style="text-align: justify;">
	The challengers faced by the aviation insurance business in Nepal are the challenges that face the aviation operators as well. The biggest challenge is to reduce operational risk. Despite the significant challenges that are faced, Nepal is clearly serious in its desire to reduce risk and consequently improve safety. It can be done.&nbsp;</p>
<p style="text-align: justify;">
	The main challenges facing aviation in Nepal are:&nbsp;</p>
<ul>
	<li style="text-align: justify;">
		Infrastructure improvement. There needs to be a significant investment in better basic airport facilities (i.e. runways, navigation aids, etc.)&nbsp;</li>
	<li style="text-align: justify;">
		Weather reporting. There is a requirement for a significant number of automatic weather stations to report the weather being experienced in real time, via satellite link, in the more remote parts of the country.&nbsp;</li>
	<li style="text-align: justify;">
		Better operational control being exercised by the operators. It needs to become a complete team effort especially when difficult decisions are needed associated with dispatch of aircraft in the difficult operational environment that exists.&nbsp;This will become even more important over the next decade or so as the average age and experience levels of pilots are reduced.&nbsp;</li>
	<li style="text-align: justify;">
		More and better training to help reduce the effect of the loss of highly experienced pilots over the next ten years.&nbsp;</li>
</ul>
<p style="text-align: justify;">
	<strong>What can Nepal do to overcome these challenges?&nbsp;</strong></p>
<p style="text-align: justify;">
	The system of regulation that has been in place for the past 50 plus years may have reached its maximum effectiveness. Regulation by requiring compliance with rules and regulations has probably got as good as it will get globally. The adoption of a more proactive and predictive Safety Management System (SMS) is needed by the operators and aviation authorities in Nepal. Having an effective way of safety oversight such as through adoption of a Safety Management System (SMS) has been proved to improve safety and risk management culture. Such a system can be used to support airline owners, airline managers, pilots &amp; engineers and all who are involved in aviation; this includes the regulators who must have a key role in supporting new ways of looking at risk and safety management and oversight.&nbsp;</p>
<p style="text-align: justify;">
	<strong>The annual claims payout in the aviation section has been constantly rising. This is bound to further increase the already significantly high aviation insurance premium. How are we going to tackle this problem?&nbsp;</strong></p>
<p style="text-align: justify;">
	The current global picture is interesting with record low levels of claims for successive years. Unfortunately this trend has not been seen in Nepal. Tackling the problem will require leadership on the part of the regulating authorities towards resetting the scene for risk and safety management such as through improvement in the operational management operators. The regulating authorities can and need to play a leading role in improving oversight and ensuring that all operators are able to take advantage of an open and even handed approach to improvement of infrastructure and operational standards. Operators investing in good safety systems and management should be supported and those that are failing to do this need to be provided with proper advice and if necessary some forms of sanction up to and including withdrawal of AOC.&nbsp;</p>
<p style="text-align: justify;">
	New approaches and thinking will bring positive benefits. We can’t just keep doing business as we have always done and expect things to get better on their own. Change is inevitable in all businesses not least aviation and the benefits to Nepal can be significant in terms of social and economic reward.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What prospects do you see for aviation insurance business in Nepal in the future?&nbsp;</strong></p>
<p style="text-align: justify;">
	The prospects for aviation insurance business in Nepal are bright. There is a capable and knowledgeable local market which has good relationships with the global insurance community. The present level of risk is too high but there are enough insurers willing to support the market, albeit currently at a higher cost than in some other places. What is perceived as the current high cost of insurance can and should be reduced for operators who demonstrate a good safety culture and record, adopt a Safety Management Programme that is working well and can prove that it is making a difference.&nbsp;</p>
<p style="text-align: justify;">
	<strong>Is there anything else that you would like to say?&nbsp;</strong></p>
<p style="text-align: justify;">
	As a leading provider of Claims Handling and Risk and Asset Management Services and with our long association with Nepal aviation, Airclaims can help make a safer environment for all stakeholders in aviation in Nepal, but it has a cost. Therefore, we are ready to work with the leaders of aviation in Nepal to support Nepal in the development of its aviation capability and ambitions with safety as the focus of any plan. Once it happens all of Nepalese society will reap the benefits.&nbsp;</p>',
			'published' => true,
			'created' => '2013-03-16',
			'modified' => '2013-03-16',
			'keywords' => '',
			'description' => 'Nepal is undoubtedly a challenging operating environment for operators and crews in terms of terrain, weather and infrastructure and these factors do mean that along with a loss record that reflects these challenges, insurance costs will be higher.',
			'sortorder' => '751',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 4 => array(
		'Article' => array(
			'id' => '866',
			'article_category_id' => '40',
			'title' => 'Sky Is The Limit For Aviation Insurance In Nepal',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p style="text-align: justify;">
	<img align="right" alt="Prakash Panday, Shikhar Insurance Company Ltd" height="276" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/prakash_panday_cover_feb2013.jpg" style="margin: 0px 0px 0px 10px;" width="235" /></p>
<address style="text-align: right;">
	<strong style="color: rgb(35, 200, 250); font-size: 16px; font-style: normal;">‘Sky is the limit for aviation insurance in Nepal’</strong></address>
<address style="text-align: right;">
	 </address>
<address style="text-align: right;">
	<strong>Dip Prakash Panday</strong></address>
<address style="text-align: right;">
	<strong>CEO</strong></address>
<address style="text-align: right;">
	<strong>Shikhar Insurance Company Ltd</strong></address>
<p>
	 </p>
<p style="text-align: justify;">
	<strong>What is the size of the aviation insurance market in Nepal?</strong></p>
<p style="text-align: justify;">
	The total size of the aviation insurance market of the domestic private sector in Nepal is around USD 8.5 -9 million.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What about your company’s stake in the market?</strong></p>
<p style="text-align: justify;">
	We have around 70-75% market share.</p>
<p style="text-align: justify;">
	<strong>Is it true that the insurance companies have not been able to make profits from the aviation insurance? Why?</strong></p>
<p style="text-align: justify;">
	Aviation Insurance in Nepal has been a loss making portfolio for all the insurers involved. &nbsp;This has been because of the losses in the last couple of years. Nepal is being taken as a high risk zone for aviation insurance.&nbsp;</p>
<p style="text-align: justify;">
	<strong>It is said that some insurance companies are trying to form a pool to collectively handle the aviation insurance claims. What is the latest progress in this regard?</strong></p>
<p style="text-align: justify;">
	It is a very good concept. Reinsurance companies support about 99.5 per cent insurance and only 0.5% is handled by the local insurance companies. The main idea behind forming this pool is to take the advantage of the volume and also to get quality reinsurers so that losses get paid in a timely manner and also to have standardization in all the policies. &nbsp;This can also help in some investment in safety features.&nbsp;</p>
<p style="text-align: justify;">
	<strong>How is this pool going to help the insurance companies, if and when it is formed?</strong></p>
<p style="text-align: justify;">
	It is still in the planning process. Insurance companies and operators have to come together with full support from the regulators before such a pool can be formed. &nbsp;</p>
<p style="text-align: justify;">
	<strong>What future do you see for aviation insurance business in Nepal?</strong></p>
<p style="text-align: justify;">
	Sky is the limit for aviation insurance in Nepal. The only thing is that safety factors have to be improved. Nepal’s aviation sector is classified as the highest risk zone for reinsurers. We want to see Nepal as a safe destination. When a pool of insurers is going to own the overall aviation insurance, more responsibility shall be felt. Risk management is very important.&nbsp;</p>
<p style="text-align: justify;">
	<strong>Almost whatever the insurance companies earn from the aviation segment goes to the reinsurance companies abroad. Some are even said to be making losses in the aviation segment. It is said that the companies know that they are not going to make profits from the aviation segment. But they do aviation insurance just to show high insurance premium collection is. What do you say?</strong></p>
<p style="text-align: justify;">
	We are not sending money, we are transferring risk. The reason that the companies are still in profit is because the money is flowing in from the reinsurers abroad. Since they agreed to take the risk, they bear the losses as well. But after eight consecutive years of losses, they are getting scared. Some of the reinsurers have already withdrawn from the Nepali aviation market.</p>
<p style="text-align: justify;">
	<strong>How can we lower the high insurance premium?</strong></p>
<p style="text-align: justify;">
	It will take time. It is important to win the confidence of the reinsurers and prove that Nepal’s aviation sector is a safe zone for investment. This can be done only by reducing the losses. Fear is a very dangerous thing. Our terrains are difficult, which has sent a wrong perception. Similarly, loss is also a perception and this can be changed. All we need is 2 to 3 years of good loss ratio.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What do you expect from the Beema Samiti or the government for that matter to facilitate the aviation insurance business in the country? &nbsp;</strong></p>
<p style="text-align: justify;">
	It would be great if the Beema Samiti would help in the process of making an Aviation Pool. Active participation and support is required from them and the Civil Aviation Authority of Nepal (CAAN), especially on the safety side. This should not be only on papers but also in practice.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What are the key challenges and issues facing the aviation insurance industry in Nepal?</strong></p>
<p style="text-align: justify;">
	CAAN has to take the lead role. CAAN and the private airline operators should be more alert. There should be an improvement in monitoring flight data, safety infrastructure etc. For example, many airports in Nepal are not black-topped. When the weather is bad, flights should be aborted and airports should be closed. Individual behavior should be monitored by the operators. We also need to invest in training and skill development of the people involved in the aviation business.&nbsp;</p>
<p style="text-align: justify;">
	<strong>The annual claims payout in the aviation section has been constantly rising. This is bound to further increase the already significantly high aviation insurance premium. How are we going to tackle this problem?</strong></p>
<p style="text-align: justify;">
	There should be a considerable investment in safety measures. I feel that the only way out now is to produce good results for the reinsurers. Losses do happen but the frequency of losses in our country is high. If we go jointly, I feel that this will be a good beginning and we can produce significant results. &nbsp;</p>
<p style="text-align: justify;">
	<strong>There are various types of aviation insurance policies in the world. Are all of them available in Nepal?</strong></p>
<p style="text-align: justify;">
	Three basic types of aviation products are available in Nepal. These are basically for Hull, Liability including Passengers and Crew Personnel Accident and Hull War. Hull insurance covers the insurance of aircraft. Till last year, Combined Single Limit Liability insurance required was USD 60 million per aircraft which has now been revised. Hull War insurance is used in case of war, hijacking etc. &nbsp;</p>
<p style="text-align: justify;">
	<strong>The country’s first-ever aviation insurance summit was organized in the capital recently. How helpful was this summit?</strong></p>
<p style="text-align: justify;">
	Reinsurers came to the market and studied it. Their perception has changed. We took them to see our infrastructures including a mountain flight and had discussions on the current issues of the aviation market. We are trying our best to boost the reinsurers’ confidence. We feel that the summit has helped to bring some positive change in their risk perception of our country.</p>
<div style="text-align: justify;">
	 </div>',
			'published' => true,
			'created' => '2013-03-16',
			'modified' => '2013-03-16',
			'keywords' => '',
			'description' => 'The reason that the companies are still in profit is because the money is inflowing from the reinsurers abroad. Since they agreed to take the risk, they bear the losses as well.',
			'sortorder' => '750',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 5 => array(
		'Article' => array(
			'id' => '782',
			'article_category_id' => '40',
			'title' => 'Cover Story January 2013',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p style="text-align: justify;">
<!--[if gte mso 9]><xml>
 <w:WordDocument>
  <w:View>Normal</w:View>
  <w:Zoom>0</w:Zoom>
  <w:TrackMoves/>
  <w:TrackFormatting/>
  <w:AutoHyphenation/>
  <w:PunctuationKerning/>
  <w:ValidateAgainstSchemas/>
  <w:SaveIfXMLInvalid>false</w:SaveIfXMLInvalid>
  <w:IgnoreMixedContent>false</w:IgnoreMixedContent>
  <w:AlwaysShowPlaceholderText>false</w:AlwaysShowPlaceholderText>
  <w:DoNotPromoteQF/>
  <w:LidThemeOther>EN-US</w:LidThemeOther>
  <w:LidThemeAsian>X-NONE</w:LidThemeAsian>
  <w:LidThemeComplexScript>X-NONE</w:LidThemeComplexScript>
  <w:Compatibility>
   <w:BreakWrappedTables/>
   <w:SnapToGridInCell/>
   <w:WrapTextWithPunct/>
   <w:UseAsianBreakRules/>
   <w:DontGrowAutofit/>
   <w:SplitPgBreakAndParaMark/>
   <w:DontVertAlignCellWithSp/>
   <w:DontBreakConstrainedForcedTables/>
   <w:DontVertAlignInTxbx/>
   <w:Word11KerningPairs/>
   <w:CachedColBalance/>
  </w:Compatibility>
  <w:BrowserLevel>MicrosoftInternetExplorer4</w:BrowserLevel>
  <m:mathPr>
   <m:mathFont m:val="Cambria Math"/>
   <m:brkBin m:val="before"/>
   <m:brkBinSub m:val="--"/>
   <m:smallFrac m:val="off"/>
   <m:dispDef/>
   <m:lMargin m:val="0"/>
   <m:rMargin m:val="0"/>
   <m:defJc m:val="centerGroup"/>
   <m:wrapIndent m:val="1440"/>
   <m:intLim m:val="subSup"/>
   <m:naryLim m:val="undOvr"/>
  </m:mathPr></w:WordDocument>
</xml><![endif]-->	<span style="font-size:14px;"><img alt="coverstory" border="1" height="281" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/international.jpg" vspace="10" width="400" /></span></p>
<p class="MsoNormal" style="text-align: justify;">
	<strong><span style="font-size:14px;"><span class="A8"><span style="font-family: ">By Sushila Budhathoki</span></span></span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<strong><span style="font-size:14px;"><span class="A8"><span style="font-family: ">&nbsp;</span></span></span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<strong><span style="font-size:14px;"><span class="A9">International <span style="line-height: 115%; font-family: ">Degrees in Nepal International Degrees in Nepal</span></span></span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<strong><span style="font-size:14px;"><span class="A9"><span style="line-height: 115%; font-family: ">&nbsp;</span></span></span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span class="A16">G</span><span style="color: black;">one are the days when students had no choice but to go abroad for foreign degrees, thanks to the increasing number of foreign educational institutions which are providing internationally recognized education in Nepal.</span><br />
	<br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">With the growing popularity of A Level, international affiliation has become important for the brand value of the Nepali educational institutions. According to the Ministry of Education (MoE), the importance of foreign affiliation for higher education emerged to the fore zone six years ago in BS 2063 and currently there are 87 educational institutions affiliated to foreign institutions. Among them, 36 institutions are providing Bachelor level and above Degrees (see table). Dr Keshav Kumar Shrestha, Executive Director, Curriculum Development Centre (CDC) of Tribhuvan University, says getting affiliations to foreign universities has seen an upsurge in Nepal in recent years. “These institutions are helping students to broaden their knowledge and make them more practical as well as assisting them to complete the courses more efficiently keeping in mind that the world is turning into a global village,” he says.<br />
	<br />
	<img alt="coverstory" border="1" height="314" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/coverstory(4).jpg" vspace="10" width="469" /></span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">These colleges have emerged at a time when going abroad for study has become a common phenomenon. The foreign institutions operating in Nepal are expected to lower this trend as enrolling in these institutions is more accessible and affordable. According to a government publication titled “Nepal Education in Figures 2012”, a total of 11,912 students applied for permission to go to 53 different countries during fiscal year 2011/12. Among them, 3,759 were female and 8153 were male students. Samjana Basnyat, Principal of International School of Tourism and Hotel Management, says, “As education is vital, a degree from a reputed institution is a feather in your cap. General Nepalis cannot afford to go abroad for higher studies.”</span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">International exposure is one of the factors that helps to make an individual qualified globally. The foreign-affiliated institutions in the country provide an international exposure as well as an international degree to the students. They get the same certificate which the students who go abroad can hope to get. According to Kshitij Regmi, Business Development Director at Islington College, though the fee structure of the foreign-affiliated colleges is a little higher than that of the other local colleges, the students get double advantage when they enroll in foreign-affiliated institutions like Islington. He says, “We are giving a world class British degree here in Nepal and for that we have world class infrastructure and resources. Getting the same degree in Europe requires a lot of resources and is unmatched to what we give here.”</span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">Islington College runs BBA and other specialized courses like BIT- Bachelor in Multi-media, Computing, Networking and IT Security. The college produces 300 plus graduates a year. Regmi adds, “Education is an investment. Now the students have to start building a career right after the Bachelor level unlike till the recent past when one would not bother about a career before completing the Master level. Therefore, they have to invest more to learn earlier and faster. And it’s not only money that they are expected to invest in their education; they need to invest time and planned efforts as well.”<br />
	<br />
	<br />
	<img alt="featured" border="1" height="1002" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/foregin.jpg" vspace="10" width="500" /></span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">The demand for higher level education is growing in Nepal is apparent in the statistics on the students’ number in Nepal. More than 300,000 students appear in the SLC exam every year, and about half of them pass it. Around 100,000 pass the +2 level every year. However, the number of educational institutes providing higher level studies is insufficient to accommodate them all. According to Nepal Education in Figures 2012, there are 9 universities and 3383 higher secondary schools - 2,499 public and 884 private schools. Similarly, there are 1,102 colleges of the universities including 90 public and 1,012 private colleges, 3 medical institutions and 418 Technical Education and Vocational Training (TEVT) institutions. At the existing universities, which offer education up to the PhD level, faculties like humanities, management, education, science and technology and engineering are popular among the students. The international institutions operating in Nepal have included varieties of courses in these fields in addition to other international courses.<br />
	<br />
	<br />
	<img alt="coverstory" border="1" height="169" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/coverstory12.jpg" vspace="10" width="292" /></span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">The education ministry says, while granting permission to students to go abroad or to foreign institutions to open their affiliated institutions here, it gives priority to the subjects which are rare at the Nepali educational institutes. There are different courses for the students to choose from in the fields of management, Information Technology, Hospitality, Science, Computer Science and Fashion Designing. Some of the colleges also run specialized courses. For example, Kathmandu Forestry College runs M.Sc.in Geo- Information; International School of Tourism and Hotel Management runs Master of Innovation and Management in Tourism. Similarly, such institutions are running courses as per the need of time and market. As there is a high demand particularly in the field of management, many of these colleges are running BBA or MBA classes. Human biology is the latest course that is popular among the students.<br />
	<br />
	<br />
	<img alt="coverstory" border="1" height="439" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/coverstory1.jpg" vspace="10" width="450" /></span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">Dr Dev Raj Adhikari, Dean of Central Department of Management, Tribhuvan University (he is also a member of the Expert Committee formed under the Ministry of Education for the monitoring and evaluation of foreign universities), feels the need for welcoming good foreign universities since the trend of global education has already started. According to him, as we have entered into the WTO regime, it is not appropriate to restrict foreign universities from coming to Nepal. He says, “The presence of top quality universities in Nepal will encourage Nepali universities to raise their standards and be on a par with their foreign counterparts. It will also motivate Nepali colleges to increase the quality of their education in order to compete and sustain in the market.”</span></span></p>
<p class="MsoNormal" style="text-align: justify;">
	<strong><span style="font-size:14px;">&nbsp;</span></strong></p>
<p class="Pa15" style="margin-top: 5pt; text-align: justify;">
	<strong><span style="font-size:14px;"><span style="color: black;">Growing popularity</span></span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">The institutions are running international courses particularly because of the demand driven market. According to Biplav Singh, Senior Programme Manager at King’s College, the trend of enrolling in foreign institutions is increasing fast. King’s College which started BBA classes in 2009 has produced 12 MBA graduates and the number of intake this year is 66. Similarly, Lord Buddha Education Foundation which started MBA classes in 2000 has produced around 400 MBA graduates. Dr Tulasi Thapaliya, Under Secretary at the Ministry of Education, says these institutions are fulfilling the demand of those students who are opting for internationally recognized courses. He says, “Colleges are coming to us for the approval of a range of subjects. The colleges also see huge prospects in these courses. That is why they are investing huge amounts to establish their institutions.”</span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">High chances of job placement after the completion of the courses are also luring the students. Timely completion of the courses and possibility of credit transfer to a college abroad are the other attractions. Many colleges are providing skill development trainings beyond their academic courses to enable the students to compete in the international market. King’s College runs an MBA entrepreneurship course for those who are running their own business or planning to start a business on their own. Singh says, “We are working intensively for the placement of our graduates in the job market. We have already started Chinese language classes and a 2-year compulsory English class for MBA students.” Similarly, Islington College organizes job fairs where they call the prospective employers and the chances of students getting jobs are high. Regmi says, “Co-operation from the government and job providers is increasing. Currently we have tie-ups with many national and multinational companies for student placement and internship programmes. Some of our students are earning more than Rs 200,000 per month.”<br />
	<br />
	<br />
	<br />
	<img alt="coverstory" border="1" height="216" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/coverstroy13.jpg" vspace="10" width="193" /></span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">Started in 2004, International School of Tourism and Hotel Management basically produces hotel management graduates, Many of its students are working at the assistant or even executive level positions in many five star hotels in Nepal and abroad, according to Samjana Basnyat, Principal of the College. She says, “We focus on shaping the overall personality of the students because inculcating positive attitude is a must in today’s competitive age. This positive attitude does make an individual far more superior than others.” The college has a high number of students in Higher Diploma in Hotel Management (Equivalent to Bachelors Degree) course.</span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">Many of these colleges are providing full time faculty support which helps students learn beyond their curriculum. The resource centers of these colleges like libraries, computer-labs, science-labs etc are also available full time. Some colleges are offering customized curricula to suit the needs and demand of the Nepali market. Courses like Diploma in Hotel and Restaurant Management, Bachelor in Hotel and Catering Management, Diploma in Travel and Tourism Management etc are being provided by these institutions as the tourism sector is seeing a shortage of qualified manpower. On the other hand, some courses are more advanced than that of Nepali universities, especially the courses offered by the British and American universities. However, the curriculum is not everything about the offered courses, say the experts. Adhikari says, “The quality of faculty and teaching- learning methodology plays a crucial role in setting the quality of the offered degrees. The quality of graduates is equally dependent on the quality of faculty members and the quality of pedagogy practiced.”</span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><strong>&nbsp;<img alt="coverstory 2012" border="1" height="284" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/coverstroy14.jpg" vspace="10" width="260" /></strong></span></p>
<p style="text-align: justify;">
	 </p>
<p class="MsoNormal" style="text-align: justify;">
	<strong><span style="font-size:14px;"><span style="color: black;">Weak monitoring<br />
	</span>&nbsp; <br />
	</span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">The growing demand has led to some unethical practices too. Some colleges are found admitting students beyond their capacities and running courses without any government approval. In September 2012, some 72 colleges across the country including some foreign institutes were found running management, IT and natural science courses without approval from the MoE. Among them, many were reputed foreign institutes and renowned colleges. San Institute of Nursing, the first institute to get foreign affiliation, lost its good reputation when the college could not run smoothly. The college established in 2060 BS (some nine years ago) closed down soon after producing its first batch. According to Basnyat, the failure of the international educational institutes in maintaining academic discipline is becoming a threat for the education sector. She says, “The international educational institutes in Nepal should emphasize on quality education. Failure to maintain academic discipline and merely going for quantity will take us nowhere.”</span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">The government publishes the list of colleges affiliated to foreign institutions after providing affiliations and permission for operating in Nepal. Dr Tulasi Thapaliya, says, “It is high time that we started regulating these international institutions so that they could offer quality education in Nepal.” Many of the parents and students are unaware of the fact that if the institution has not got its courses or curriculum approved from the government, the institution or the course becomes invalid and the students will not get the degree. Without government authorization, the degrees are not recognized. By law, the institutions need government permission before adding courses or branches. However, there are many instances of the colleges not following the rules. Some of the colleges have been found to collect fees from the students or publish advertisements without any assurance that the classes will actually start. Likewise, many of these colleges are offering courses that are beyond their capacity and without permission from the authorities while some are busy in promotions rather than providing quality education.</span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">The ‘Directive for Foreign Educational Institutions Running Higher Level Education, 2059’ has laid down the requirements and procedures needed to be followed to run such colleges. There are provisions laid down in the directive to apply for opening an institution, getting foreign affiliation and adding courses and programmes. The directive has also set down the rules for human resource requirement in the institution, credibility of the university concerned and the relevance of the courses offered in Nepal. However, it is a different matter that MoE has not been able to handle these issues properly.<br />
	<br />
	<br />
	<img alt="cover story january 2012" border="1" height="324" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/glacier15.jpg" vspace="10" width="284" /></span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">Foreign educational institutions that want to operate in Nepal must be accredited by the law of the country of origin, according to the existing Nepali law. The institutes cannot close down its operation before the end of the academic year. They should be purely educational institutions and should follow the directives of 2059 BS. There are norms for all educational institutes. For example, there are separate specific norms set for GCE A Level, Engineering B.E. &amp; IT, Nursing and Hotel Management. There is a committee at the Ministry of Education (MoE) to scrutinize the quality of the international degrees offered in Nepal and the foreign universities that the Nepali colleges are affiliated to. But the committee has not been able to carry out its responsibilities, say the critics. They also point out that many of the colleges are violating the norms. Moreover, they also complain that there is no law to penalize such colleges operating without the government’s approval. The existing Education Act 1971 lacks clear provisions to check such lawbreakers. A bill to amend the Act awaits the parliament’s go-ahead.</span> <br />
	</span></p>
<p style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">Although the international courses have good credibility in the international market, freedom to choose and decide the curriculum by colleges themselves may invite negative consequences, say the experts. They further add that it is necessary to carefully inspect and monitor the standard and quality of pedagogy and courses introduced here. There is an academic council at TU that develops the courses to be run by Nepali colleges. The council also helps to implement the courses developed by foreign universities in Nepal. Dr Shrestha says, “We have also kept in mind the need for course revision at every department. Such courses should also meet national and international market demand.” <br />
	</span></span><span style="font-size:14px;"> </span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">There are many foreign-affiliated colleges in Nepal that are having administrative problems. “Many colleges are in the reviewing process due to the lack of documents. And many of them have been suspended for their failure to prove credibility,” says an officer at MoE, requesting anonymity. According to him, weak monitoring and regulation has helped these colleges to run without proper documentation, infrastructure, capacity, credibility and meeting other required criteria. There is no clear policy on the number of faculties and programmes a colleges can run. The MoE officer adds,” We are reviewing all these colleges for their exact status.” On the other hand, the institutions say that the red tapism in the Nepali bureaucracy is the main problem in timely the updating of their statuses.<br />
	<br />
	<br />
	<img alt="coverstory" border="1" height="198" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/hospital.jpg" vspace="10" width="182" /></span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">A lot of problems are seen in the tuition fees that these institutions raise. There are different fee structures for different faculties. The fees also vary from college to college. Many of these colleges have not properly mentioned how much fee is collected from each student. However, according to Roj Nath Pandey, Assistance Spokesperson for the MoE, there are no written complaints against these institutions for taking high tuition fees. He says, “We would instantly take action if any complaint is lodged in this regard. They cannot take fees more than what they have mentioned in their applications seeking our approval for the course.”&nbsp;&nbsp;</span></span></p>
<p class="MsoNormal" style="text-align: justify;">
	<strong><span style="font-size:14px;"><span style="color: black;">The way forward</span></span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">Many of these colleges have just started their sessions and the results are yet to come. Yet, it should be recognized that these emerging affiliates of international institutions have raised the hope of developing Nepal as an international education hub. “If we carry forward the mission to fulfill this dream, it is possible to make Nepal an educational hub,” opines Dr Shrestha. According to him, the basic infrastructure to develop Nepal as an education hub must be there and the academic calendar should be updated. He says, “Activities like padlocking and protests at TU are a huge setback to this mission. The resources within the universities should be well managed first to start the mission of developing the country into an international education hub. Also, a timely change in the curriculum is a must.”</span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">International affiliations have also opened the door to the international training institutes. Linked with The London Chamber of Commerce and Industry (LCCI), LCCI Nepal has been working with around 15 colleges, mostly with foreign affiliation. “Ours is a new initiative. We work in the Nepali education sector as an outsourced knowledge provider. Our training enables students to gain knowledge beyond the course. They can work in whichever country they go because they are trained professionally,” shares Dikshanta Bhatta, Assistant Manager at LCCI Nepal. He adds, “Our programmes are so popular that we are now targeting also the colleges that are affiliated to Nepali universities.”</span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">The college operators are also hopeful of a bright future in Nepal. They believe that if they focus on providing quality education to the Nepali students and offer a moderate fee structure, they will be able to get enough number of students. Regmi says, “Nepal is a strategically located country. It has good links to various countries including neighbouring India, China, Pakistan and Bangladesh. Technical subjects such as IT have good prospects.” He demands policies facilitating the global system which he says is a basic requirement of the global market. Regmi says, “We are in an open market and have a dynamic future. We could work better than this if we had more friendly policies.”</span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">The MoE, on the other hand, is planning to intensify the monitoring process this year. Dr Thapaliya Says, “Now we are taking action against some of the colleges which are found admitting more students than they can effectively handle. We are also reviewing the performances of these colleges.” The Supreme Court has also recently issued an 11-point order seeking to regulate the freewheeling private schools and colleges including the foreign institutions in response to a writ filed by advocates. This verdict will have a strong impact on the colleges which are not performing well.</span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="line-height: 115%; color: black;">Some of the institutions are also conducting monitoring and evaluation by themselves for quality assurance. However, the bad image of some colleges is casting a shadow on the good private colleges operating in Nepal under affiliation from foreign universities. The colleges, too, are afraid that the wrong deeds of a few colleges might ruin all of them. Basnyat shares, “Our plan is to keep upgrading ourselves in terms of infrastructure, quality education etc and provide the necessary facilities to the students as well as increase collaboration with the international players and get affiliations from different hospitality outlets so that our graduates could get multiple avenues.”</span></span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="line-height: 115%; color: black;">&nbsp;</span></span></p>
<p class="MsoNormal" style="text-align: justify;">
	<strong><span style="font-size:14px;"><span class="A3">‘There is a need to regulate and maintain foreign colleges to </span><span class="A3">prevent unfair </span><span class="A3"><span style="line-height: 115%; font-family: ">Competition’</span></span></span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<strong><span style="font-size:14px;"><span class="A3"><span style="line-height: 115%; font-family: "><br />
	&nbsp;<img alt="tulsi" border="1" height="307" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/tulsi.jpg" vspace="10" width="269" /></span></span></span></strong></p>
<address>
	<span style="font-size:12px;"><strong><span style="color: black;">DR TULASI THAPALIYA </span></strong></span></address>
<address>
	<span style="font-size:12px;"><strong><span class="A0" style="">Under Secretary </span></strong></span></address>
<address>
	<span style="font-size:12px;"><strong><span class="A0" style=""><span style="line-height: 115%;">Ministry of Education</span></span></strong></span></address>
<p class="MsoNormal" style="text-align: justify;">
	<strong style="font-size: 14px;"><span style="color: black;">How did the trend of establishing colleges with international affiliations begin in Nepal?</span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">Globalization of education compelled many countries to run academic programmes which are popular internationally. The charm of studying foreign courses in one’s own country and getting a certificate recognized globally at the end is high in any country. It looks so normal today that it has become something of a trend. Nepal, too, could not remain unaffected from this charm as more and more colleges in Asia started introducing international courses through affiliations with foreign colleges/universities. Nepal took its cue from this international trend.</span><br />
	<br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><strong><span style="color: black;">What has been the contribution of these foreign affiliated colleges? Has the Ministry made any evaluation?</span>&nbsp; </strong><br />
	</span></p>
<p class="Pa10" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">The Ministry is yet to carry out any evaluation of that sort. However, there are some good aspects that these colleges have brought about. For example, the students in Nepal have exposure to international curricula. They don’t need to go abroad for the foreign courses which are already available in Nepal, thanks to these foreign-affiliated colleges. Another advantage is that they get choices in the curriculum. And the most important thing is that the institutions providing higher education in Nepal can learn from the experiences of these foreign-affiliated colleges.</span></span></p>
<p class="MsoNormal" style="text-align: justify;">
	<strong><span style="font-size:14px;"><span style="color: black;"><br />
	</span></span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<strong><span style="font-size:14px;"><span style="color: black;">How does the MoE monitor the foreign-affiliated colleges?</span></span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">We have a monitoring mechanism. There is a committee at the MOE to monitor these institutions. We are planning to intensify the monitoring process this year. The monitoring process will be more regular in the days to come.</span><br />
	<br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><strong><span style="color: black;">What are the criteria for permitting colleges to get foreign affiliations?</span> <br />
	</strong></span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">Colleges in Nepal are running international courses because of the market demand. If there were no students demanding these courses, then these institutions would not come to us to get these courses approved by the ministry. The MoE gives the approval for these courses but this approval is subject to consent from the University Grant Commission.</span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">There are a number of criteria for getting foreign affiliations for Colleges. The process begins with the institutions wishing to run the academic programmes of international universities applying to the MoE. Their applications must include the consent of the University Grant Commission and other professional bodies. Then we observe the overall status of the applying colleges. We have a scrutiny mechanism to see whether the college is really in a position to offer the intended courses or not. We look at their physical facilities, infrastructure, human resource, credibility and validity of the international institutions offering affiliations.</span> <br />
	</span></p>
<p style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">Sometimes, the foreign institutions offering affiliations to Nepali institutions may not have much credibility back in their own countries. We also consider the demand of the said courses in Nepal. Particularly, we encourage those courses that are not offered by the Nepali universities. These are some of the conditions and criteria that we follow. There is a guideline already approved by the cabinet that the criteria in detail. </span><br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><strong><span style="color: black;">There are a range of subjects from management and hospitality to information technology to culinary arts. But many of the foreign-affiliated colleges are running BBA or MBA classes. Why?</span> <br />
	</strong></span></p>
<p style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">It is not about the BBA or MBA classes; it is about the demand of the students. However, there are two different ways of regulating and managing educational programmes. One, you could run trial courses to see what courses are in demand. The other option is the colleges come forward with proposals seeking approval for the courses they want to teach. The main idea is the demand for the subject by the students. If the demand rises, these subjects could be offered by many colleges. Yesterday only, I got a proposal for running micro-biology classes by one of the colleges. Many colleges are planning to run different management courses. </span></span><span style="font-size:14px;"> </span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa23" style="margin-top: 5pt; text-align: justify;">
	<span style="font-size:14px;"><strong><span style="color: black;">It is often complained that foreign affiliations are hampering the higher education system in Nepal. What do you have to say? </span></strong></span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">There are two sides to this complaint. One is because of the rise in the number of foreign affiliated colleges, many students are choosing them instead of colleges that teach courses of Nepali universities. This could be affecting the education system of Nepal.</span> <br />
	</span></p>
<p class="Pa23" style="margin-top: 5pt; text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">The other side is a positive one. The existing colleges and universities in Nepal get the chance to learn from the foreign-affiliated colleges and their new courses. Foreign-affiliated colleges can create an environment of completion where the colleges teaching courses of Nepali varsities, too, can become innovative in their courses and/ or curricula. Of course, there is a need to regulate these institutions properly to prevent unfair competition.<br />
	<br />
	<br />
	</span><strong><span style="color: black;"> </span></strong></span></p>
<p class="Pa23" style="margin-top: 5pt; text-align: justify;">
	<span style="font-size:14px;"><strong><span style="color: black;">It is said that the trend to go abroad for studies among Nepali students would have been low had there been foreign-affiliated colleges in Nepal in the past, say as back as a decade or so? What do you think?</span></strong></span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">It could have, perhaps, but I am not sure. It’s not only for the reason of education that the Nepali students go for abroad studies; there are other reasons as well. For example, they go abroad to earn while they learn. They might even want to learn beyond the courses they are enrolled to. Students even go to different countries to learn the same courses; they pick the country of their choice. International exposure and other opportunities are other important factors behind the current trend of going for abroad studies.</span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="line-height: 115%; color: black;">So, the presence of foreign-affiliated colleges in Nepal may not lower the abroad study graph very drastically. It could, however, contribute to some extent in lowering the number of students going abroad for studies. But it cannot completely stop the trend.</span></span></p>
<p class="MsoNormal" style="text-align: justify;">
	 </p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:16px;"><span style="line-height: 115%; color: black;">&nbsp;</span></span><strong style="font-size: 16px;"><span class="A3">‘Timely revision of <span style="line-height: 115%; font-family: ">curriculum is a must’</span></span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span class="A3"><span style="line-height: 115%; font-family: "><img alt="keshav" border="1" height="305" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/keshavkumar.jpg" vspace="10" width="300" /><br />
	</span></span></span></p>
<address>
	<span style="font-size:14px;"><strong><span style="color: black;">DR KESHAV KUMAR SHRESTHA </span></strong></span></address>
<address>
	<span style="font-size:14px;"><strong><span class="A0">Executive Director </span></strong></span></address>
<address>
	<span style="font-size:14px;"><strong><span class="A0"><span style="line-height: 115%; font-family: ">Curriculum Development Centre (CDC), TU</span></span></strong></span></address>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><strong><span class="A0"><span style="line-height: 115%; font-family: ">&nbsp;</span></span></strong></span></p>
<p class="MsoNormal" style="text-align: justify;">
	<strong style="font-size: 14px;"><span style="color: black;">Why do Nepali colleges need affiliations with foreign universities?</span></strong></p>
<p style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">Nepali colleges have joined the trend of getting affiliated to foreign universities lately. The foreign courses taught by these colleges have helped the Nepali students in broadening their knowledge and getting, perhaps, more practical education. Today, the world has become a global village; everything is globalised, including education. Colleges in one country get affiliated with foreign universities in order to teach foreign courses. This trend has helped the Nepali students in more than one way. </span><br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa23" style="margin-top: 5pt; text-align: justify;">
	<strong><span style="font-size:14px;"><span style="color: black;">Why doesn’t the CDC develop such courses on its own? </span></span></strong></p>
<p style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">Tribhuvan University has its own way and process of developing curricula. CDC develops courses on the basis of their need. For example, if there is a four-year course, we discuss its merits and demerits in depth. With the teamwork of ‘subject committees’, CDC not only develops curricula but also conducts seminars, orientation programmes and workshops to help the teaching and learning of foreign courses in the country. We are also careful about updating and even revising the TU courses from time to time. There is an Academic Council at TU that oversees the course developing process. Such courses should also meet national and international market interests. I think TU needs to implement the credit hours requirement system for its courses too. </span><br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><strong><span style="color: black;">Are the foreign courses beneficial for the Nepali students in the long run?</span></strong> <br />
	</span></p>
<p class="Pa10" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">There are professional as well as academic benefits for the Nepali students from the foreign courses. These courses also ensure better career opportunities and future for the students. </span></span></p>
<p style="text-align: justify;">
	<strong><span style="font-size:14px;"><span style="color: black;"><br />
	What are the possibilities of developing Nepal into an educational hub?</span></span><br />
	</strong></p>
<p class="Pa10" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">This is a broad topic to discuss. First, we need the basic infrastructure to develop Nepal as an education hub. The academic calendar should be updated and other new changes should be introduced. Recent activities like padlocking and protests happening at TU are a huge setback to such a m mission. Before Nepal can be developed into an international education hub, we should be able to manage the resources within the Nepali universities well. And, I repeat, timely changes in the curricula are a must. </span></span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;">&nbsp;</span></p>
<p style="text-align: justify;">
	<span style="font-size:14px;"><strong><span style="color: black;">How is CDC supporting the students’ educational freedom to take courses of their choice?</span></strong> </span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">We definitely pay attention to the interests of the students by keeping ourselves abreast with the market demand. The basic thing here is to enhance the quality of education. The students are given utmost freedom to choose from the available courses. TU has eight-semester BBA and four-semester MBA courses. Along with the freedom, the students should not forget the competition in the market and the credibility of the available courses.</span></span></p>
<p class="MsoNormal" style="text-align: justify;">
	<strong><span style="font-size:14px;">&nbsp;</span></strong></p>
<p class="Pa23" style="margin-top: 5pt; text-align: justify;">
	<strong><span style="font-size:14px;"><span style="color: black;">What changes in TU courses is CDC bringing in the coming days?</span></span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">A change may not always mean an immediate broad adjustment. We change existing courses or introduce new ones by analyzing the needs and demands in the market. For example, we have paid much attention to developing and bringing new courses in of Information Technology, Hotel Management, BBA and others. There is a demand for these courses as they are more likely to give the students a secured career.</span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<strong><span style="font-size:14px;">&nbsp;</span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<strong><span style="font-size:14px;"><span style="color: black;">There is a common complaint that the annual system hasn’t work well in the education sector. What is CDC doing to address this complaint?</span> <br />
	</span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">The annual system focuses on mass education. However, it needs to be changed according to time. Recently, we have developed a new course, Tea Technology and Management (BSC Tea Technology), at Mechi Multiple Campus, Jhapa.</span> <br />
	</span></p>
<p style="text-align: justify;">
	<span style="font-size:14px;"><br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><strong><span style="color: black;">Are the foreign courses more practical and skill-oriented?</span> <br />
	</strong></span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="line-height: 115%; color: black;">The most important thing is that these courses have a good reputation in the market. However, it is also true that only a few percent of fresh graduates get good jobs in the market. So, it’s high time to ensure the production of quality and competitive manpower by domestic as well as foreign-affiliated colleges.</span></span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;">&nbsp;</span></p>
<p style="text-align: justify;">
<!--[if gte mso 9]><xml>
 <w:LatentStyles DefLockedState="false" DefUnhideWhenUsed="true"
  DefSemiHidden="true" DefQFormat="false" DefPriority="99"
  LatentStyleCount="267">
  <w:LsdException Locked="false" Priority="0" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Normal"/>
  <w:LsdException Locked="false" Priority="9" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="heading 1"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 2"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 3"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 4"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 5"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 6"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 7"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 8"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 9"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 1"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 2"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 3"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 4"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 5"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 6"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 7"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 8"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 9"/>
  <w:LsdException Locked="false" Priority="35" QFormat="true" Name="caption"/>
  <w:LsdException Locked="false" Priority="10" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Title"/>
  <w:LsdException Locked="false" Priority="1" Name="Default Paragraph Font"/>
  <w:LsdException Locked="false" UnhideWhenUsed="false" Name="Body Text"/>
  <w:LsdException Locked="false" Priority="11" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Subtitle"/>
  <w:LsdException Locked="false" Priority="22" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Strong"/>
  <w:LsdException Locked="false" Priority="20" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Emphasis"/>
  <w:LsdException Locked="false" Priority="59" SemiHidden="false"
   UnhideWhenUsed="false" Name="Table Grid"/>
  <w:LsdException Locked="false" UnhideWhenUsed="false" Name="Placeholder Text"/>
  <w:LsdException Locked="false" Priority="1" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="No Spacing"/>
  <w:LsdException Locked="false" Priority="60" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Shading"/>
  <w:LsdException Locked="false" Priority="61" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light List"/>
  <w:LsdException Locked="false" Priority="62" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Grid"/>
  <w:LsdException Locked="false" Priority="63" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 1"/>
  <w:LsdException Locked="false" Priority="64" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 2"/>
  <w:LsdException Locked="false" Priority="65" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 1"/>
  <w:LsdException Locked="false" Priority="66" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 2"/>
  <w:LsdException Locked="false" Priority="67" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 1"/>
  <w:LsdException Locked="false" Priority="68" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 2"/>
  <w:LsdException Locked="false" Priority="69" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 3"/>
  <w:LsdException Locked="false" Priority="70" SemiHidden="false"
   UnhideWhenUsed="false" Name="Dark List"/>
  <w:LsdException Locked="false" Priority="71" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Shading"/>
  <w:LsdException Locked="false" Priority="72" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful List"/>
  <w:LsdException Locked="false" Priority="73" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Grid"/>
  <w:LsdException Locked="false" Priority="60" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Shading Accent 1"/>
  <w:LsdException Locked="false" Priority="61" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light List Accent 1"/>
  <w:LsdException Locked="false" Priority="62" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Grid Accent 1"/>
  <w:LsdException Locked="false" Priority="63" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 1 Accent 1"/>
  <w:LsdException Locked="false" Priority="64" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 2 Accent 1"/>
  <w:LsdException Locked="false" Priority="65" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 1 Accent 1"/>
  <w:LsdException Locked="false" UnhideWhenUsed="false" Name="Revision"/>
  <w:LsdException Locked="false" Priority="34" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="List Paragraph"/>
  <w:LsdException Locked="false" Priority="29" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Quote"/>
  <w:LsdException Locked="false" Priority="30" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Intense Quote"/>
  <w:LsdException Locked="false" Priority="66" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 2 Accent 1"/>
  <w:LsdException Locked="false" Priority="67" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 1 Accent 1"/>
  <w:LsdException Locked="false" Priority="68" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 2 Accent 1"/>
  <w:LsdException Locked="false" Priority="69" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 3 Accent 1"/>
  <w:LsdException Locked="false" Priority="70" SemiHidden="false"
   UnhideWhenUsed="false" Name="Dark List Accent 1"/>
  <w:LsdException Locked="false" Priority="71" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Shading Accent 1"/>
  <w:LsdException Locked="false" Priority="72" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful List Accent 1"/>
  <w:LsdException Locked="false" Priority="73" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Grid Accent 1"/>
  <w:LsdException Locked="false" Priority="60" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Shading Accent 2"/>
  <w:LsdException Locked="false" Priority="61" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light List Accent 2"/>
  <w:LsdException Locked="false" Priority="62" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Grid Accent 2"/>
  <w:LsdException Locked="false" Priority="63" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 1 Accent 2"/>
  <w:LsdException Locked="false" Priority="64" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 2 Accent 2"/>
  <w:LsdException Locked="false" Priority="65" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 1 Accent 2"/>
  <w:LsdException Locked="false" Priority="66" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 2 Accent 2"/>
  <w:LsdException Locked="false" Priority="67" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 1 Accent 2"/>
  <w:LsdException Locked="false" Priority="68" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 2 Accent 2"/>
  <w:LsdException Locked="false" Priority="69" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 3 Accent 2"/>
  <w:LsdException Locked="false" Priority="70" SemiHidden="false"
   UnhideWhenUsed="false" Name="Dark List Accent 2"/>
  <w:LsdException Locked="false" Priority="71" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Shading Accent 2"/>
  <w:LsdException Locked="false" Priority="72" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful List Accent 2"/>
  <w:LsdException Locked="false" Priority="73" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Grid Accent 2"/>
  <w:LsdException Locked="false" Priority="60" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Shading Accent 3"/>
  <w:LsdException Locked="false" Priority="61" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light List Accent 3"/>
  <w:LsdException Locked="false" Priority="62" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Grid Accent 3"/>
  <w:LsdException Locked="false" Priority="63" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 1 Accent 3"/>
  <w:LsdException Locked="false" Priority="64" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 2 Accent 3"/>
  <w:LsdException Locked="false" Priority="65" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 1 Accent 3"/>
  <w:LsdException Locked="false" Priority="66" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 2 Accent 3"/>
  <w:LsdException Locked="false" Priority="67" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 1 Accent 3"/>
  <w:LsdException Locked="false" Priority="68" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 2 Accent 3"/>
  <w:LsdException Locked="false" Priority="69" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 3 Accent 3"/>
  <w:LsdException Locked="false" Priority="70" SemiHidden="false"
   UnhideWhenUsed="false" Name="Dark List Accent 3"/>
  <w:LsdException Locked="false" Priority="71" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Shading Accent 3"/>
  <w:LsdException Locked="false" Priority="72" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful List Accent 3"/>
  <w:LsdException Locked="false" Priority="73" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Grid Accent 3"/>
  <w:LsdException Locked="false" Priority="60" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Shading Accent 4"/>
  <w:LsdException Locked="false" Priority="61" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light List Accent 4"/>
  <w:LsdException Locked="false" Priority="62" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Grid Accent 4"/>
  <w:LsdException Locked="false" Priority="63" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 1 Accent 4"/>
  <w:LsdException Locked="false" Priority="64" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 2 Accent 4"/>
  <w:LsdException Locked="false" Priority="65" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 1 Accent 4"/>
  <w:LsdException Locked="false" Priority="66" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 2 Accent 4"/>
  <w:LsdException Locked="false" Priority="67" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 1 Accent 4"/>
  <w:LsdException Locked="false" Priority="68" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 2 Accent 4"/>
  <w:LsdException Locked="false" Priority="69" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 3 Accent 4"/>
  <w:LsdException Locked="false" Priority="70" SemiHidden="false"
   UnhideWhenUsed="false" Name="Dark List Accent 4"/>
  <w:LsdException Locked="false" Priority="71" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Shading Accent 4"/>
  <w:LsdException Locked="false" Priority="72" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful List Accent 4"/>
  <w:LsdException Locked="false" Priority="73" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Grid Accent 4"/>
  <w:LsdException Locked="false" Priority="60" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Shading Accent 5"/>
  <w:LsdException Locked="false" Priority="61" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light List Accent 5"/>
  <w:LsdException Locked="false" Priority="62" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Grid Accent 5"/>
  <w:LsdException Locked="false" Priority="63" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 1 Accent 5"/>
  <w:LsdException Locked="false" Priority="64" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 2 Accent 5"/>
  <w:LsdException Locked="false" Priority="65" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 1 Accent 5"/>
  <w:LsdException Locked="false" Priority="66" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 2 Accent 5"/>
  <w:LsdException Locked="false" Priority="67" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 1 Accent 5"/>
  <w:LsdException Locked="false" Priority="68" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 2 Accent 5"/>
  <w:LsdException Locked="false" Priority="69" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 3 Accent 5"/>
  <w:LsdException Locked="false" Priority="70" SemiHidden="false"
   UnhideWhenUsed="false" Name="Dark List Accent 5"/>
  <w:LsdException Locked="false" Priority="71" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Shading Accent 5"/>
  <w:LsdException Locked="false" Priority="72" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful List Accent 5"/>
  <w:LsdException Locked="false" Priority="73" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Grid Accent 5"/>
  <w:LsdException Locked="false" Priority="60" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Shading Accent 6"/>
  <w:LsdException Locked="false" Priority="61" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light List Accent 6"/>
  <w:LsdException Locked="false" Priority="62" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Grid Accent 6"/>
  <w:LsdException Locked="false" Priority="63" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 1 Accent 6"/>
  <w:LsdException Locked="false" Priority="64" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 2 Accent 6"/>
  <w:LsdException Locked="false" Priority="65" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 1 Accent 6"/>
  <w:LsdException Locked="false" Priority="66" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 2 Accent 6"/>
  <w:LsdException Locked="false" Priority="67" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 1 Accent 6"/>
  <w:LsdException Locked="false" Priority="68" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 2 Accent 6"/>
  <w:LsdException Locked="false" Priority="69" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 3 Accent 6"/>
  <w:LsdException Locked="false" Priority="70" SemiHidden="false"
   UnhideWhenUsed="false" Name="Dark List Accent 6"/>
  <w:LsdException Locked="false" Priority="71" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Shading Accent 6"/>
  <w:LsdException Locked="false" Priority="72" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful List Accent 6"/>
  <w:LsdException Locked="false" Priority="73" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Grid Accent 6"/>
  <w:LsdException Locked="false" Priority="19" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Subtle Emphasis"/>
  <w:LsdException Locked="false" Priority="21" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Intense Emphasis"/>
  <w:LsdException Locked="false" Priority="31" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Subtle Reference"/>
  <w:LsdException Locked="false" Priority="32" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Intense Reference"/>
  <w:LsdException Locked="false" Priority="33" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Book Title"/>
  <w:LsdException Locked="false" Priority="37" Name="Bibliography"/>
  <w:LsdException Locked="false" Priority="39" QFormat="true" Name="TOC Heading"/>
 </w:LatentStyles>
</xml><![endif]--><!--[if gte mso 10]>
<style>
 /* Style Definitions */
 table.MsoNormalTable
	{mso-style-name:"Table Normal";
	mso-tstyle-rowband-size:0;
	mso-tstyle-colband-size:0;
	mso-style-noshow:yes;
	mso-style-priority:99;
	mso-style-qformat:yes;
	mso-style-parent:"";
	mso-padding-alt:0in 5.4pt 0in 5.4pt;
	mso-para-margin-top:0in;
	mso-para-margin-right:0in;
	mso-para-margin-bottom:10.0pt;
	mso-para-margin-left:0in;
	line-height:115%;
	mso-pagination:widow-orphan;
	font-size:11.0pt;
	font-family:"Calibri","sans-serif";
	mso-ascii-font-family:Calibri;
	mso-ascii-theme-font:minor-latin;
	mso-hansi-font-family:Calibri;
	mso-hansi-theme-font:minor-latin;
	mso-bidi-font-family:"Times New Roman";
	mso-bidi-theme-font:minor-bidi;}
</style>
<![endif]-->	<span style="font-size:14px;"><br />
	</span></p>',
			'published' => true,
			'created' => '2013-02-07',
			'modified' => '2013-03-15',
			'keywords' => '',
			'description' => 'Gone are the days when students had no choice but to go abroad for foreign degrees, thanks to the increasing number of foreign educational institutions which are providing internationally recognized education in Nepal.',
			'sortorder' => '671',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 6 => array(
		'Article' => array(
			'id' => '774',
			'article_category_id' => '40',
			'title' => 'Learning : The Ropes December 2012',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
<!--[if gte mso 9]><xml>
 <w:WordDocument>
  <w:View>Normal</w:View>
  <w:Zoom>0</w:Zoom>
  <w:TrackMoves/>
  <w:TrackFormatting/>
  <w:PunctuationKerning/>
  <w:ValidateAgainstSchemas/>
  <w:SaveIfXMLInvalid>false</w:SaveIfXMLInvalid>
  <w:IgnoreMixedContent>false</w:IgnoreMixedContent>
  <w:AlwaysShowPlaceholderText>false</w:AlwaysShowPlaceholderText>
  <w:DoNotPromoteQF/>
  <w:LidThemeOther>EN-US</w:LidThemeOther>
  <w:LidThemeAsian>X-NONE</w:LidThemeAsian>
  <w:LidThemeComplexScript>X-NONE</w:LidThemeComplexScript>
  <w:Compatibility>
   <w:BreakWrappedTables/>
   <w:SnapToGridInCell/>
   <w:WrapTextWithPunct/>
   <w:UseAsianBreakRules/>
   <w:DontGrowAutofit/>
   <w:SplitPgBreakAndParaMark/>
   <w:DontVertAlignCellWithSp/>
   <w:DontBreakConstrainedForcedTables/>
   <w:DontVertAlignInTxbx/>
   <w:Word11KerningPairs/>
   <w:CachedColBalance/>
  </w:Compatibility>
  <w:BrowserLevel>MicrosoftInternetExplorer4</w:BrowserLevel>
  <m:mathPr>
   <m:mathFont m:val="Cambria Math"/>
   <m:brkBin m:val="before"/>
   <m:brkBinSub m:val="--"/>
   <m:smallFrac m:val="off"/>
   <m:dispDef/>
   <m:lMargin m:val="0"/>
   <m:rMargin m:val="0"/>
   <m:defJc m:val="centerGroup"/>
   <m:wrapIndent m:val="1440"/>
   <m:intLim m:val="subSup"/>
   <m:naryLim m:val="undOvr"/>
  </m:mathPr></w:WordDocument>
</xml><![endif]-->	<span style="font-size:12px;"><img alt="learningtheropes" border="1" height="181" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/rashesh.jpg" vspace="10" width="338" /><br />
	<br />
	<br />
	<img alt="telephone" border="1" height="165" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/camels.jpg" vspace="10" width="249" /><br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:12px;"><span color:="" myriad="" style="font-family: ">By Rashesh Vaidya</span></span></p>
<p class="MsoNormal">
	<span style="font-size:12px;"><span color:="" myriad="" style="font-family: ">&nbsp;</span></span></p>
<p class="Pa9">
	<strong><span style="font-size:12px;"><span style="color: black;">Camels and Eagles </span></span></strong></p>
<p class="MsoNormal">
	<strong><span style="font-size:12px;"><span class="A28"><span style="line-height: 115%; font-family: ">The rating system identifies the problematic banks which are in need of increased supervision.</span></span></span></strong></p>
<p class="MsoNormal">
	<strong><span style="font-size:12px;"><span class="A28"><span style="line-height: 115%; font-family: ">&nbsp;</span></span></span></strong></p>
<p class="Default">
	<span style="font-size:12px;"><span class="A4">A </span><span style="color: black;">commercial bank’s performance can be measured in terms of its ability to meet the expectations of its owners, employees, depositors and borrowers. A bank’s performance can be evaluated by analysing its financial reports- report of condition and report of income. The bank’s management has to protect the interests of all concerned parties - creditors, owners and others. They have to ensure minimum operating efficiency and keep the bank’s risks at a minimum level. Their survival depends upon their operating performance.</span> <br />
	</span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:12px;"><span style="color: black;">Commercial banks are the most regulated of all the institutions in the financial system because of the direct impact of their activities on the economy. Every commercial bank is regulated and governed by their regulator i.e. the Nepal Rastra Bank (NRB), the country’s central bank. The NRB inspects and supervises (on-site and off-site) the banks and financial institutions (BFIs) to ensure that the banks operate in a safe and sound manner. Sections 49(1) and 49(2) and 52(1) to 52(5) of the Bank and Financial Institution Act (BAFIA), 2006 and sections 76 to 88 of the Nepal Rastra Bank Act, 2006 have given full authority to the NRB to direct, supervise and inspect the BFIs it has issued licenses to.&nbsp;&nbsp; </span></span><span style="font-size:12px;"> <span style="color: black;"><br />
	</span></span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">For this purpose, the regulators have developed a uniform numerical rating system called CAMELS Rating, which is based on the financial statements of the banks and on-site examinations. The Bank Supervision Department of NRB can carry out on-site examination of commercial banks in Nepal by sending examination teams to the commercial banks. Onsite examination can be either corporate level covering all aspects of the functioning of the bank or can be a targeted branch-level inspection. On completion of the on-site –examination, examiners perform CAMELS rating of the bank. This rating is exclusively used for supervisory purpose and is not revealed to the general public.&nbsp;&nbsp; </span></span><span style="font-size:12px;"> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">The examiners or inspection team evaluates a bank’s health on the basis of the overall rating based on capital adequacy, assets quality, management quality, earning ability, liquidity position and sensitivity to market risks (systematic risks). The Federal Reserve Regulators in the USA developed the numerical CAMELS rating system in the early 1970s to help structure their bank examination process.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">The BFIs are categorised into different groups based on their overall strength, quality and operating soundness. The rating system identifies the problematic banks which are in need of increased supervision. In the CAMELS rating system, each bank is assigned two sets of ratings:</span><br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">&nbsp;&nbsp;&nbsp;&nbsp; 1.<span font-size-adjust:="" font-stretch:="" font-style:="" font-variant:="" font-weight:="" line-height:="" new="" style="font-family: " times=""> </span></span><span style="color: black;">Performance Ratings, which comprise six individual ratings that address each of the CAMELS components; and</span> <br />
	</span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:12px;"><span style="color: black;">&nbsp;&nbsp;&nbsp;&nbsp; 2. An overall Composite Rating, which is a single rating based on a comprehensive assessment of the bank’s overall condition.Both the&nbsp;&nbsp; ratings are scored on a numerical scale of 1 to 5 in the ascending order of supervisory concern where “1” represents the best rating and “5” the worst. </span></span></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:12px;"><span style="color: black;">Here is a description of the rating scores for each of the six components: </span></span></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span></p>
<p class="Pa7" style="text-align:justify">
	<strong><span style="font-size:12px;"><span style="color: black;">Rating 1 (A) indicates very strong performance </span></span></strong></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp;</span></strong></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">Rating 2 (B) indicates above-average performance that adequately provides for a safe and sound operation of the BFIs.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">Rating 3 (C) indicates performance that is flawed to some degree.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">Rating 4 (D) indicates unsatisfactory performance which, if left unchecked, could threaten the solvency of the BFIs.</span> <br />
	</span></p>
<p class="Pa7" style="text-align:justify">
	<span style="font-size:12px;"><span style="color: black;">Rating 5 (E) indicates very unsatisfactory performance and calls for immediate remedial attention for the survival of the BFIs. </span></span></p>
<p class="Default">
	<span style="font-size:12px;"><br />
	<span style="color: black;">The rating of banks can be further developed by giving a score to each component of the CAMELS, known as the Composite CAMELS Rating Score. The Composite CAMELS Rating can be calculated as:</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">Composite CAMELS Rating= C(0.25)+A(0.25)+M(0.25)+E(0.10)+ L(0.10)+S(0.05)</span> <br />
	</span></p>
<p>
	 </p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">Each of the above six parameters can be weighted on a scale of 1 to 100 and contains a number of sub-parameters with individual weightage. The banks should be rated on a five-point scale (A to E) based on the lines of the international CAMELS rating model.</span><br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">The CAMELS system evaluates banks on the following six parameters:</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1.<span font-size-adjust:="" font-stretch:="" font-style:="" font-variant:="" font-weight:="" line-height:="" new="" style="font-family: " times="">&nbsp;&nbsp; </span></span><span style="color: black;">Capital Adequacy: Capital adequacy has been the main pillar of existence of any bank. Banks have to maintain a proper mix of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; different types of capitals to avoid pressure on their dividend policies and inadequacy of total capital funds against the risk exposure. Capital adequacy is measured by the ratio of capital to risk-weighted assets (CRAR). A sound capital base strengthens the confidence of depositors.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">2. Asset Quality: One of the indicators for asset quality is the ratio of non-performing loans to total loans (Gross Non-Performing Assets - GNPA). The gross non-performing loans to gross advances ratio is more indicative of the quality of credit decisions made by bankers. A higher GNPA is indicative of poor credit decision-making.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">3. Management: The ratio of non-interest expenditures to total assets can be one of the measures to assess the working of the management. This variable, which includes a variety of expenses, such as payroll, workers’ compensation and training investment, reflects the management policy stance.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">4. Earnings: It can be measured as the return on asset ratio.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">5. Liquidity: The cash maintained by a bank and balances with the central bank to the total asset ratio is an indicator of the bank’s liquidity. In general, banks with a larger volume of liquid assets are perceived safe, since these assets would allow them to meet unexpected withdrawals.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">Section 38 of BAFIA, 2006 provides for maintaining a good liquidity position by the BFIs. Commercial banks are required to maintain CRR (cash reserve ratio) at 5 per cent of their total deposits. The NRB monitors the CRR weekly, and the liquidity profile on a quarterly basis.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">6. Sensitivity to Market Risks/Systems and Control: Risks associated with adverse movements in the exchange rates (including gold positions), interest rates, liquidity and investment in equity are covered under market risk management. A bank faces market risks either from its investments in government securities and bonds or from the exchange rate risk that persist in matching position. The market risk is managed by the banks’ Asset and Liability Committee (ALCO) which assesses policies and levels of risk appetite.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">However, the CAMELS approach has inherent indeterminacy and subjectivity. There can be instances when an examination of the accounting records cannot decide whether to give an average or below average score. The ‘good’ and ‘bad’ indicators are easy to spot, but the ‘in-betweens’ are not. This is a problem of indeterminacy. But when bank inspectors are forced to make a judgment, it leads to the second problem of subjectivity and hence these ratings could come up with differing levels of expectations and perspectives. Among the six variables, ‘M’ has been missing - the one which assesses the management quality and corporate governance. This has been a paradox because most of the failures of the banks are related with the quality and efficiency of their management. The problem arises while trying to quantify the management quality in the due course of analyzing and evaluating the performance of the BFIs. Thus, the central bank of Taiwan, has been using CARSEL instead of CAMELS to measure the management ability and sensitivity to market to fullfil the Regulatory Compliance and Stability criteria, respectively.</span><br />
	</span></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp;<img alt="camels" height="389" src="http://newbusinessage.com/ckfinder/userfiles/Images/camelsan.jpg" width="500" /></span></strong></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp;</span></strong></p>
<p class="Pa13" style="margin-top:5.0pt">
	<strong><span style="font-size:12px;"><span style="color: black;">About EAGLES</span></span></strong></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">The EAGLES system is able to measure and compare banks’ performance in a more determinate, objective and consistent manner. The name is derived from the key success factors confronting banks today, i.e. Earning ability, Asset quality, Growth, Liquidity, Equity and Strategy. This approach has been pioneered and has gained credibility among the banking community and fund management industry in Asia, for competition analysis and investment planning, respectively. The authenticity and popularity of EAGLES increased after it was able to predict the Asian financial crisis of the 1980s.</span> <br />
	</span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:12px;"><span style="color: black;">The effective management of a bank strategy is indicated by the Strategic Response Quotient (SRQ). It is an intriguing ratio because it assesses the management’s ability to lend, garner deposits, generate fee-based income and manage the operating cost. An appropriate balance of the three core banking activities will depend on the bank’s strategy. The SRQ is obtained by dividing the interest margin by net operating cost (that is, the total operating cost minus fee income). The higher figure the better combined with excellent risk controls. <br />
	<br />
	<br />
	<img alt="eagles" border="1" height="560" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/camesl.jpg" vspace="10" width="429" /><br />
	</span></span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">EAGLES evaluates banks on the following six parameters:</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">1.<span font-size-adjust:="" font-stretch:="" font-style:="" font-variant:="" font-weight:="" line-height:="" new="" style="font-family: " times="">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span><span style="color: black;">Earning Ability: Earning ability is shown by three noteworthy indicators – Return on Assets (ROA), Return on Shareholders’ Fund (ROSF) and Income/Overheads Ratio (IOR). The importance of IOR is usually not well understood. The main point lies in that income depends on external market forces, while overheads is highly influenced by internal staffing. So, the bank must know how to adjust the staffing according to the market demand for its products and services.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">This is shown by three indicators - ROA, Return on Net worth (RONW) and IOR. Usually, the importance of IOR is that income depends on external market forces, while overheads is highly influenced by internal staffing. So, the bank must know how to adjust the staffing according to the market demand for its products and services.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">2. Asset Quality: Asset quality is best assessed by on-site inspection of the bank’s loan portfolio. If this is not possible, asset quality can be measured by the level of bad debt provisions, that is, bad and doubtful debts (BDD) as a percentage of total loans. A conservative approach will dictate that the quantum of provision to err on the high side is rather low.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">This is best judged by the level of bad debt provisions, that is, bad and doubtful debts as a percentage of total loans. A conservative approach will dictate that the quantum of provision is on the high side is rather low.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">3. Growth: Growth rates of loans and core deposits are the most important indicators of how a bank wants to position itself in the market. A high growth loan book without a corresponding growth in the deposit base signifies an intention to increase interest margins. A higher deposit growth without a corresponding growth in loans means that the bank is suffering from low interest margins. For some banks, lower interest margins could hamper their overall profitability.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">Growth rates of loans and core deposits are the most important indicators of how a bank wants to position itself in the market. A high growth loan book without a corresponding growth in the deposit base signifies an intention to increase interest margins. A higher deposit growth without a corresponding growth in loans means that the bank suffers from low interest margins.<br />
	<br />
	<br />
	<br />
	<img alt="composite" border="1" height="524" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/composite.jpg" vspace="10" width="500" /></span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">4. Liquidity: Liquidity can be described as the ability of a bank to have sufficient funds to meet cash demands for loans, deposit withdrawals and operating expenses. For this reason, a balance should be made between the amount of deposits garnered and the quantum of loans extended. The indicator is the deposit-to-loan ratio or credit-deposit ratio (CD Ratio). It is important for a bank, therefore, to maintain a balance between the amounts of deposits garnered and the quantum of loans extended. Also, investment to deposit ratio is used as an efficient indicator of liquidity.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">5. Equity: Equity level and capital adequacy have a profound impact on the bank. There is an international guideline (Basel II) that stipulates a bank must have a minimum capital equivalent to 8 per cent of the risk adjusted assets. Even the central bank of Nepal, the NRB, has mentioned a comfort zone of 6 and 10 per cent of core capital and total capital funds, respectively, based on the risk-weight assets (percent). Many banks are restricted to open additional branches unless they meet the minimum capital requirements.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">Similarly, sections 31(1) and (2) of BAFIA, 2006 have also categorized the financial institutions into four classes, namely: A, B, C and D based on their minimum capital requirements. And sections 42(1) to 42(5) have clearly explained the provision of capital adequacy for the BFIs in Nepal.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">6. Strategy: The effective management of a bank’s strategy is indicated by the strategic response quotient (SRQ). It assesses the management’s ability to lend, garner deposits, generate fee based income and manage the operating cost. As to what is an appropriate balance of the three core banking activities depends on the bank’s strategy. The SRQ is obtained by dividing the interest margin by net operating cost (that is, total operating cost minus fee income). The higher figure the better combined with excellent risk controls.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">Each of the six parameters is divided into sub-parameters for effective evaluation. The EAGLES rating, unlike CAMELS, is based purely on arithmetical ratios and hence does not involve grades or ratings. Thus, there is no subjectivity involved in EAGLES and banks are judges purely on the ratio outputs and ranked highest to lowest based on these parameters. Each bank is ranked highest to lowest on each of the sub-parameters. The bank with higher ranks on more sub-parameters will be ranked the highest in that particular parameter. Accumulating all the parameters, the bank that gets the highest rank on more parameters stands on the top of the list.</span><br />
	<br />
	<img alt="camsel" border="1" height="560" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/camesl(1).jpg" vspace="10" width="429" /><br />
	</span></p>
<p class="Default">
	<strong><span style="font-size:12px;"><span style="color: black;">About MACRO</span> <br />
	</span></strong></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">MACRO is a rating system formerly used by examiners to evaluate the safety and soundness of savings institutions. MACRO is an acronym for the five elements that were evaluated: Management, Assets quality, Capital adequacy, Risk management and Operating results. Based on the examiner’s evaluation, each element would be rated on a scale of 1 to 5, and the institution would be assigned an overall MACRO rating of 1 to 5. The indications of MACRO rating were:</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">The MACRO Rating System was used by the Federal Thrift Examiners from (exact date) 1984 to August 15, 1994, before it was replaced by the CAMELS Rating System.</span><br />
	<br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:12px;"><b style="mso-bidi-font-weight:normal"><span style="line-height: 115%; color: black;">Vaidya is a Researcher associated with New Business Age (P) Ltd. He can be contacted at rashesh_vaidya@hotmail.com</span></b> <br />
	</span></p>',
			'published' => true,
			'created' => '2013-01-22',
			'modified' => '2013-01-22',
			'keywords' => '',
			'description' => 'A commercial bank’s performance can be measured in terms of its ability to meet the expectations of its owners, employees, depositors and borrowers. A bank’s performance can be evaluated by analysing its financial reports- report of condition and report of income. The bank’s management has to protect the interests of all concerned parties - creditors, owners and others. They have to ensure minimum operating efficiency and keep the bank’s risks at a minimum level. Their survival depends upon their operating performance.',
			'sortorder' => '664',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 7 => array(
		'Article' => array(
			'id' => '768',
			'article_category_id' => '40',
			'title' => 'Cover Story December 2012',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	 </p>
<p>
<!--[if gte mso 9]><xml>
 <w:WordDocument>
  <w:View>Normal</w:View>
  <w:Zoom>0</w:Zoom>
  <w:TrackMoves/>
  <w:TrackFormatting/>
  <w:PunctuationKerning/>
  <w:ValidateAgainstSchemas/>
  <w:SaveIfXMLInvalid>false</w:SaveIfXMLInvalid>
  <w:IgnoreMixedContent>false</w:IgnoreMixedContent>
  <w:AlwaysShowPlaceholderText>false</w:AlwaysShowPlaceholderText>
  <w:DoNotPromoteQF/>
  <w:LidThemeOther>EN-US</w:LidThemeOther>
  <w:LidThemeAsian>X-NONE</w:LidThemeAsian>
  <w:LidThemeComplexScript>X-NONE</w:LidThemeComplexScript>
  <w:Compatibility>
   <w:BreakWrappedTables/>
   <w:SnapToGridInCell/>
   <w:WrapTextWithPunct/>
   <w:UseAsianBreakRules/>
   <w:DontGrowAutofit/>
   <w:SplitPgBreakAndParaMark/>
   <w:DontVertAlignCellWithSp/>
   <w:DontBreakConstrainedForcedTables/>
   <w:DontVertAlignInTxbx/>
   <w:Word11KerningPairs/>
   <w:CachedColBalance/>
  </w:Compatibility>
  <w:BrowserLevel>MicrosoftInternetExplorer4</w:BrowserLevel>
  <m:mathPr>
   <m:mathFont m:val="Cambria Math"/>
   <m:brkBin m:val="before"/>
   <m:brkBinSub m:val="--"/>
   <m:smallFrac m:val="off"/>
   <m:dispDef/>
   <m:lMargin m:val="0"/>
   <m:rMargin m:val="0"/>
   <m:defJc m:val="centerGroup"/>
   <m:wrapIndent m:val="1440"/>
   <m:intLim m:val="subSup"/>
   <m:naryLim m:val="undOvr"/>
  </m:mathPr></w:WordDocument>
</xml><![endif]--></p>
<p>
	<strong><span style="font-size:14px;"><span class="A13">By Gaurav Aryal (With inputs from Rashesh Vaidya, Sushila Budhathoki, Abha Dhital and Bivek Dhakal)</span></span><span style="font-size:14px;"> </span></strong></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;</span></span></strong></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span style="line-height: 115%; color: rgb(22, 144, 186);">Nepali Economy</span></span></strong></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">Before and After Maoist Insurgency</span></span></strong></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;<br />
	<img alt="" border="1" height="240" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/coverstory15.jpg" vspace="10" width="400" /><br />
	</span></span></strong><span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">Five years before the Maoist insurgency started in Nepal in 1996, Nepal’s GDP growth rate was approximately 5.34 percent per annum. The growth rate plunged to 3.36 percent per annum in 2006, the year the underground Maoists came over-ground following the success of the peaceful April Uprising (Jana Andolan II) and the subsequent restoration of the dissolved House of Representatives in April 2006. The economy’s growth rate kept fluctuating over the next five years till 2011.</span></span></p>
<p class="Pa7" style="text-align:justify">
	<span style="font-size:14px;"><span class="A4">N</span><span style="color: rgb(34, 30, 31);">epal is yet to witness a ‘healthy’ growth rate, which has so far fluctuated between 3.3 and 4.5 percent in this millennium, with the exception of 6.10 percent in 2008. Perhaps nobody is happy with the country’s slow growth rate, but the economists are probably the most worried lot. They lament the fact that the country’s economy has continued the downward trend even after the peace deal between the government and the Maoist guerrillas signed on November 21, 2006. A majority of Nepali economists cite the lack of new investments as the major reason for this poor show of the Nepali economy. They blame an ‘unfavourable investment climate’ created by the political uncertainty for the lack of new investments – foreign as well as domestic. However, it is not that every sector slackened over the past one and a half decades. Some sectors have witnessed encouraging growth rates. (it would be better if you could cite some examples)</span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;"><img alt="cover story december 2012" border="1" height="258" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/agriculturalproduction.jpg" vspace="10" width="400" /><br />
	<br />
	<br />
	<br />
	<span style="color: rgb(34, 30, 31);">Despite the political upheavals which include a decade-long armed insurgency, sectors such as telecommunications, education, information technology, road construction, and remittance have registered significant growths over this period. In the education sector, the literacy rate has continued a steady growth. This is mainly because of the rise in private sector investment in education, and the top priority attached to the sector by the government which allocates the largest share of the national budget to education. <br />
	<br />
	</span></span><span style="font-size:14px;"><img alt="cover story december 2012" border="1" height="244" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/totaltourist.jpg" vspace="10" width="400" /></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;"><br />
	<span style="color: rgb(34, 30, 31);">Remittance has become the lifeline of the Nepali economy in recent times. Despite huge trade deficits, the country’s Balance of Payment has remained positive, barring some hiccups. The remittance inflow has fuelled the growth of the banking sector and helped in the reduction of poverty and increase in the people’s living standard, believe the economists and experts.<br />
	<br />
	</span></span><span style="font-size:14px;"><img alt="cover story december 2012" border="1" height="310" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/totalroadlenght.jpg" vspace="10" width="500" /></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;"><br />
	<span style="color: rgb(34, 30, 31);">However, energy and tourism, arguably the two most prospectful sectors in the country, have not grown as expected. The entry of the private sector through Public Private Partnership (PPP) and Power Purchase Agreement with the state-owned Nepal Electricity Authority (NEA) has shown some hopes in the hydropower sector. However, the hope to resolve the power crisis that has only intensified since 2006 is still out of sight. <br />
	<br />
	</span></span><span style="font-size:14px;"><img alt="cover story december 2012" border="1" height="266" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/totalremittance.jpg" vspace="10" width="500" /></span></p>
<p>
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Similarly tourism, another sector widely tipped as the basis for Nepal’s economic development, could not improve as expected over the years. A veteran of Nepal’s tourism sector and Chairman Emeritus of Hotel Soaltee Crowne Plaza, Prabhakar SJB Rana notes that though the tourism industry gained some ground over the past one decade, “there are plenty of areas where we could not do anything at all”. Rana as well as other analysts attribute this failure mainly to Nepal’s inability to promote and advertise itself as an exciting tourist destination in the world’s tourist originating markets. <br />
	<br />
	</span></span><span style="font-size:14px;"><img alt="cover story december 2012" border="1" height="217" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/telephonelandlineexpansion.jpg" vspace="10" width="400" /></span><br />
	<span style="font-size:14px;"> </span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Economists as well as development planners seem to be disappointed with the latest political and economic developments. Deependra Bahadur Kshetry, Vice-chairman of the National Planning Commission, says, “The country is moving backward instead of going forward”. Referring to the difficulties of the current government led by Dr. Baburam Bhattarai in bringing out a full national budget for fiscal year 2012/13, he added, “The kind of hindrance created by the opposition parties in Nepal (in the presentation of the national budget) is seen nowhere in the world.” The size of the budget this year has shrunk compared to that of the previous year. Kshetry blames the ‘non-cooperation’ by the opposition parties for the sluggish growth of the Nepali economy in recent years. <br />
	<br />
	</span></span><span style="font-size:14px;"><img alt="cover story december 2012" border="1" height="279" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/landbought.jpg" vspace="10" width="500" /><br />
	</span></p>
<p>
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Several other analysts echo Kshetry’s concerns and cite the example of the Maoist obstruction to the presentation of the national budget last year by the then government led by CPN-UML leader Jhalanath Khanal. </span></span><span style="font-size:14px;"> </span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span></p>
<p>
	<strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">The Good Old 90s</span></span></strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);"><br />
	<br />
	Mid 1990s was a time when the scenario was much brighter with the economic growth rate hovering around five percent. From 1990, the year democracy was restored to 1995, Nepal’s overall situation improved, according to senior economist Dr Dilli Raj Khanal. But in the years after 1995, the Nepali economy witnessed a slowdown which turned into a negative growth during 2000-2005. Recalling the situation of the 1990s, economist Prof. Dr. Bishwambher Pyakuryal says, “There was devaluation of the Nepali currency, economic imbalance, and unemployment but the economy continued to grow - albeit at a modest rate - even during the insurgency in the late 1990s. The donors were supporting the development projects; ongoing projects were being given continuity. But, the donors cut their financial support to Nepal by 48 percent in the last fiscal year, compared to the previous year.”</span></span><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);"><br />
	<br />
	</span></span><br />
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);"><span style="font-size:14px;"><img alt="cover story december 2012" border="1" height="247" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/goverment.jpg" vspace="10" width="400" /></span> <br />
	Dr. Khanal adds, “Nepal’s economic growth rate, which was already slow, further deteriorated during the period of 2000 - 2005. The Maoist insurgency, which escalated during these years, is to blame to a great extent for today’s flagging economy.” Another economist, Dr Chiranjibi Nepal observes, “Although there was little economic progress from 1996 to 2000, the country was faring well, so to speak. But after 2000, there was a massive decline in economic activities, followed by the closure of several industries and slowdown in the manufacturing sector. The cumulative negative impact of all this on the economy was too heavy.” </span></span><span style="font-size:14px;"> </span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;">&nbsp;</span></strong><span style="font-size:14px;"><img alt="cover story december 2012" border="1" height="240" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/GDP.jpg" vspace="10" width="400" /><br />
	<br />
	<br />
	</span></p>
<p class="Pa13" style="margin-top:5.0pt">
	<strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Sri Lankan Comparison </span></span></strong></p>
<p>
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Economists and development experts often compare the economic situations of Nepal and Sri Lanka, for both countries have gone through violent armed insurgencies in recent history. When Nepal was passing through an armed Maoist conflict, Sri Lanka was going through the LTTE violence. In fact, Sri Lanka’s insurgency-related problems were far bigger than those of Nepal, in terms of both size and scale. For example, the Sri Lankan conflict took the life of its then head of the state and aeroplanes parked at the international airport in the capital were blown off in LTTE attacks. Nothing of that sort happened in Nepal. (The massacre of King Birendra and his family was not a terrorist act.)</span></span><span style="font-size:14px;"><br />
	<br />
	</span><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Dr. Nepal says, “It is amazing that Sri Lanka achieved five percent growth rate even when the armed conflict there was in full swing. What’s more, the island country’s growth rate crossed seven percent after the LTTE violence was brought to an end. In stark contrast, Nepal has continued with its poor show in terms of economic progress even after so many years of the start of the peace process.”</span></span><span style="font-size:14px;">&nbsp;</span><span style="font-size:14px;"> </span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);"><br />
	Former finance minister Dr. Prakash Chandra Lohani explains the reasons. “Political uncertainty and chaos has been at the root of the sorry state of the Nepali economy. It’s unfortunate that the same reasons still prevail and are hindering Nepal’s economic progress,” he says. </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;"><br />
	&nbsp;<span style="color: rgb(34, 30, 31);">The lack of any worth-noting investment in the major sectors of the economy has been another hurdle to Nepal’s economic progress. Neither domestic nor foreign investment worth mentioning has been made since the start of the peace process in the country. According to Dr. Pyakuryal, no significant amount of foreign direct investment (FDI) has come to Nepal over this period because of the feeling of insecurity and lack of confidence in the government. </span></span></p>
<p class="Pa13" style="margin-top:5.0pt">
	<span style="font-size:14px;">&nbsp;<br />
	</span><br />
	<span style="font-size:14px;"><span style="font-size:14px;"><img alt="cover story december 2012" border="1" height="255" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/budget.jpg" vspace="10" width="400" /><br />
	<br />
	</span> <span style="color: rgb(34, 30, 31);">However, all hopes are not lost for Nepal. Analysts still see the possibility of a double digit growth for the Nepali economy, provided that the state can ensure political stability and policy predictability for foreign as well as domestic investors. Some instances in the recent past support this optimism. For example, a number of foreign investors flocked Nepal – some of them wanted to explore investment opportunities while others came with concrete proposals in their hands – immediately after the government and the Maoist guerrillas signed the comprehensive peace accord on November 21, 2006. Similarly, many foreign investors applied and got the permission to conduct detailed surveys for developing a number of hydropower projects of different capacities. But many of these investors haven’t been able to go ahead with their projects, thanks to the hurdles posed by different vested interest groups. Successive governments over the years have not been able to deal effectively with these ‘project spoilers’, perhaps because of the uncertainty looming large over their own future.</span></span></p>
<p class="Pa13" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">&nbsp; <br />
	</span></span></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">&nbsp;</span><span style="color: rgb(34, 30, 31);">Human Development Index</span> </span></strong><br />
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Nepal’s Human Development Index (HDI) value for 2011 is 0.458 and the country is positioned 157th out of 187 countries included in the Index. According to a report of UNDP, between 1990 and 2011, Nepal’s HDI value increased from 0.340 in 1990 to 0.509 in 2006 and 0.458 in 2011.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">The analysts say remittance has a lot to do with poverty reduction and consequent improvement in HDI over the years. According to the Human Development Report 2011, life expectancy at birth in 1995 was 57.5 years and it increased to 65.6 in 2005 and to 68.8 in 2011. Improved health condition due to availability of health services and improved awareness are considered as contributing factors for increased life expectancy.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span><span style="font-size:14px;"><img alt="cover story december 2012" border="1" height="320" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/electricity.jpg" vspace="10" width="500" /></span></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Remittance&nbsp;&nbsp;&nbsp; </span></span></strong><span style="font-size:14px;"><br />
	</span></p>
<p>
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">The role of remittance in Nepali economy is increasing continuously. When most of the sector of the economy are showing downward trend, remittance inflow has constantly increased. This on the other hand has kept the Nepali economy going, say analysts. Remittance inflow that was Rs 239.388 billion in the fiscal year 1995/96 made a steep rise to Rs 413.428 billion in 2000/01 and to Rs 430.396 billion in 2001/02. Though the following five years till 2004/05 saw a near stagnation in remittance inflow, it registered a sharp rise to Rs 1246.423 billion in 2010/11. The trend shows that it is likely to keep on growing in the years to come too.</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">The remittance inflow in 1995/96 was equivalent to 1.79 percent of the GDP. That ratio shot up to 10.97 percent in 2001/02 and 18.69 per cent in 2010/11, according to the statistics provided by Nepal Rastra Bank.&nbsp;&nbsp; <br />
	<br />
	Remittance is credited to be one of the most important contributor to reduction of poverty incidence which, according to the Nepal Living Standards Survey III (NLSS-III), published in 2011, stands at 25.2 per cent, down from 31 percent a decade earlier.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Number of Nepali youth going abroad for employment increased during the insurgency and in the following years. Upon publication of the NLSS-II which showed poverty reduced to 31 percent from 42 percent shown in the NLSS-I in 1996, analysts had expressed fear that the poverty incidence may shoot back to 42 percent or above if the peace process started by then encouraged the migrant workers to go back to the village and discouraged further migration out of the village. But it seems that the outflow of the people from the villages is not likely to be reversed in the foreseeable future.</span><br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;<br />
	</span><span style="font-size:14px;"><img alt="cover story december 2012" border="1" height="162" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/human.jpg" vspace="10" width="500" /><br />
	</span></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Trade&nbsp;&nbsp; </span></span></strong><br />
	<br />
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Nepal’s international trade has continuously been in deficit in the absence of low industrial base. Measures for trade promotion have not brought significant improvement. Trade analysts say that easy availability of cheap Chinese goods has displaced many industries though it has helped in improving the lifestyle of the people. Nepal’s readymade garments industry (one of the major export industries) lost its American and European market due to the combination of two reasons that struck it simultaneously. One, the quota facility it enjoyed in these markets till late 1990s was lost with the phase out of the multi-fibre agreement in international trade. Second, the severe labour unrest instigated by the Maoists during the insurgency as well as after they came overground following the success of Jana Andolan II, disrupted the supply chain that forced the buyers to search other sources of supply.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">According to data from Trade and Export Promotion Centre (TEPC) and NRB, between fiscal years 1995/96 and 2011/12, it was only in 1999/2000 and 2000/01, the trade was measured surplus. The surplus in 1999/2000 and 2000/01 was by Rs 18.43 billion with India and Rs 40.24 billion with other countries and by Rs 19.18 billion with India and Rs 40.85 billion with other countries respectively.</span> <br />
	</span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Nepal’s international trade has been concentrating more and more in India in the recent years. While the share of countries other than India in Nepal’s total international trade was higher than with India till fiscal year 2001/02, then after India’s share started to be higher than that of other countries. </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span><br />
	<strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Government Budget&nbsp;&nbsp; </span></span></strong><span style="font-size:14px;"><br />
	</span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Capital expenditure in the government budget during the insurgency (from 1995/96 till 1998/99) was low and almost stable. But it was higher than the recurrent expenditure. However, in years after 1999/2000, recurrent expenditure has zoomed up while capital expenditure remained almost stagnant until the fiscal year 2005/06. One of the reasons behind such scenario was concentrated priorities of the government to calm the heightening conflict. For that purpose, expenditure was diverted to investment in security purpose; as a result, development projects were affected. It was also complained that the environment was not favourable for successful completion of the projects by the project executors during the conflict era. In the last six years recurrent expenditure has been growing substantially, reads the data provided by the Office of the Comptroller General.</span></span></p>
<p>
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Analysing this, Prof. Dr. Bishwambher Pyakuryal says, after the peace process started, many projects were either postponed or discontinued because of lack of trust in the government by donors. For example, last year the donors decreased their financial support by 48 per cent. Deficit budget is financed through foreign loan and internal loan. The amount of foreign borrowings in 2000/2001 (Rs 12.044 billion) was almost equal to the borrowings in 2010/11 (Rs 12.075 billion) while it decreased to Rs 4.546 billion in 2002/03. Similarly, the internal borrowing reached a record high in 2010/11 with Rs 42.515 billion. In the fiscal year 2009/10 it was Rs 29.914 billion and in 2006/07 it was Rs 17.892 million.</span></span><span style="font-size:14px;"><br />
	<br />
	&nbsp;</span><span style="font-size:14px;"> </span></p>
<p class="Pa13" style="margin-top:5.0pt">
	<strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Roads </span></span></strong></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);"><br />
	One of the areas where Nepal registered a good growth was in the expansion of roads network. The total length of roads has doubled over the fifteen years period between 1996 and 2012. The growth had slowed down when the conflict was at its worst. However, the growth never really ceased. Many remote parts of Nepal have been connected by road over these years. The growth is particularly in the length of fair weather roads. One reason for this increasing trend is initiative taken by local people. Growth is seen also in the length of gravelled roads that have helped in improving accessibility. In the recent years it can be noticed that the length of black-topped roads has outpaced other kinds of roads.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Electricity </span></span></strong><span style="font-size:14px;"><br />
	<br />
	<span style="color: rgb(34, 30, 31);">Electricity shortage has hamstrung industrial growth and made city life miserable. And the history reveals very interesting facts. In 1990, the installed capacity of hydropower generation in the country was 0.73 million MW which increased to 0.86 million MW in 1995/96 which gives an addition of 0.15 million MW within six years. This increased to 1.76 million MW in 2005/2006 – an increase of 0.9 million MW in ten years. Now in 2012 it stands at 2.36 million MW.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa13" style="margin-top:5.0pt">
	<strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Telecommunication </span></span></strong></p>
<p>
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">There has been a good increase in the telephone coverage across the country over the last 15 years. And this expansion is speedier in cellular mobile phones. According to the census 2011, 7.37 per cent of Nepali population uses landline telephone though this is heavily concentrated in urban areas where 22.66 per cent population uses it. In rural areas only 3.77 per cent of the population there has landline telephone. Similarly 64.63 per cent of total population of Nepal uses cellular mobile phone. This ratio is 84.07 per cent in urban areas and 59.98 per cent in rural areas. According to the census 2011 report published in November 2012.</span></span><br />
	 </p>
<p class="Pa13" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">The telephone sector suffered a lot during the insurgency. For example, many telephone towers were blown up by Maoist insurgents. However, this sector gained the most after the peace process started.</span></span></p>
<p class="Pa13" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">&nbsp;</span></span></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">&nbsp;</span><span style="color: rgb(34, 30, 31);">Agriculture&nbsp; </span></span></strong><span style="font-size:14px;"><br />
	</span></p>
<p>
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">The Agriculture sector saw stagnant trend during the period between 1995/96- 2011/12. The cash crops sub-sector did better – the production of cash crops doubled during the period. Within the cash crop subsector, the major crops that recorded substantial growth were tea, coffee and cardamom. </span></span><span style="font-size:14px;"> </span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">According to Sheela Thapa, Deputy Director at AEC (Agro Enterprise Center), consistent growth in the agricultural production was mainly because of the good weather and high rate of seed replacement. She says, “We don’t have pest problems. Farmers are increasingly using hybrid seeds as well as improved seeds which have positive impact in the production figures.” </span></span></p>
<p>
	<span style="font-size:14px;"><br />
	<span style="color: rgb(34, 30, 31);">Within this period, the year 2008 was the best in terms of weather and the availability of fertilizers while the drought and flood in 2006/ 07 resulted in a slump in agricultural production. </span></span><span style="font-size:14px;"> </span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Durga Prasad Upreti, Senior Economist at Agricultural Commodity Export Promotion Program says though there were no direct effects of armed conflict or the subsequent peace process in agricultural production, the country has lagged behind six to seven years in terms of agricultural sector development due to the conflict. He attributes the subsistence farming system for no effect of the conflict or the subsequent peace process in agriculture. According to him, had there been commercial farming with large scale farms producing the goods for the market, Nepal’s agricultural sector would have certainly suffered huge losses due to that conflict. </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span><strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Irrigation&nbsp;&nbsp; </span></span></strong><span style="font-size:14px;"><br />
	</span></p>
<p>
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">There were noticeable changes in the irrigation sector with the start of Maoist civil war in 1995/96. The hilly region saw massive decline in the growth of additional land irrigated. About 10,600 hectares of additional land were brought under irrigation in 1995/96, but it was only 1,620 hectares in 2006/07 and only 1,345 hectares in the first nine months of the fiscal year 2011/12. In Terai region, 36,084 hectares additional land was brought under irrigation in 1995/96. It was 16,782 hectares in 2005/06 and 16,101 hectares in the first nine months of the fiscal year 2011/12. </span></span><span style="font-size:14px;"> </span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Similarly, the method of irrigation has also been varied since 1995/96 with the increase in the use of ground water system. The canal water irrigation system was the main source of irrigation, irrigating 33,898 additional land in 1995/96, 5,460 hectare in 2006/07 and 12,935 hectares in the first nine months of the fiscal year 2011/ 12. On the other hand, the ground water irrigation system was 12,231 hectares in 1995/96, 21,024 hectares in 2006/07 and 4,512 hectares in the first nine months of the fiscal year 2011/12 respectively. According to the Economy Survey 2011/12, about 67 per cent of the total agricultural land is covered by irrigation.</span> <br />
	</span></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;">&nbsp;</span></strong></p>
<p class="Pa13" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Manufacturing</span></span></p>
<p>
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Manufacturing sector was the greatest sufferer due to the conflict and it is still the same. The problem started to be more pronounced from the year 2003/04 since when there was massive decline is recorded in the production of manufactured goods. </span></span><span style="font-size:14px;"> </span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span></p>
<p>
	<strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Education&nbsp;&nbsp;</span></span></strong></p>
<p class="MsoNormal">
	<br />
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Education sector too was badly affected by the conflict that forced many schools to close down, particularly in remote rural areas, and the students there were forced to join the Maoist army. However, that triggered the private sector to open new schools and colleges (mainly plus two colleges) in the cities, particularly in the capital. The conflict also encouraged the students to go abroad for studies. Now, colleges in Nepal have started getting affiliation with foreign universities and offering their courses here.</span> <br />
	</span></p>
<p>
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">According to the latest National Census 2011, the country’s literacy rate stood 65.9 percent, up from the 54.1 percent in 2001. However, this trend indicates that that it will take over three decades for Nepal to achieve the Millennium Development Goal (MDG) of 100 percent literacy, whereas that goal is actually set for 2015. </span></span><span style="font-size:14px;"> </span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa13" style="margin-top:5.0pt">
	<strong><span style="font-size:14px;"><span class="A0">National Census-2011 </span></span></strong></p>
<p class="Pa18">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Overall literacy rate (age-5 and above) =65.9% </span></span></p>
<p class="Pa18">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Male literacy=75.1% </span></span></p>
<p class="Pa18">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Female literacy=57.4% </span></span></p>
<p class="Pa18">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Highest Literacy Rate (Kathmandu=86.3%) </span></span></p>
<p class="Pa18">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Lowest Literacy Rate (Rautahat=41.7%) </span></span></p>
<p class="Pa18">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Education Above SLC=10.2% (Total Pop.) </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Tourism</span> </span></strong></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Tourism industry was not affected in the initial years of the armed conflict. So, till the end of the millennium, Nepal got good number of foreign tourists. One reason for that was the Visit Nepal Year campaign of 1998. According to the given data, it was after the millennium the tourism sector in Nepal witness a negative growth for few years. The government declared the year 2011 as ‘Nepal Tourism Year’ expecting similar effects as those of Visit Nepal Year -1998, but it was largely a failed exercise. The tourist arrival in that year was 736,215, much less than the expected one million, though nearly double the number of 1996 or 2006.</span><br />
	<br />
	</span></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Civil Aviation&nbsp; </span></span></strong><span style="font-size:14px;"><br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Decade-long conflict adversely affected civil aviation industry as well. Many Air traffic control towers were destroyed in the conflict. For example, the ‘West Locator Tower-Dharke’ was completely destroyed and it is still in the dilapidated state.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Another effect of the conflict was in the international flight movement to and from Kathmandu. Driven out of their villages, Nepali youth started going abroad for work and that increased the demand for international flights. Consequently foreign airlines started increasing their flights to Kathmandu. However, Nepal’s flag carrier Nepal Airline Corporation could not benefit from this as it suffered from lack of aircraft. Consequently, Nepal could not derive as much benefit as could have from this boom in international air traffic.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa13" style="margin-top:5.0pt">
	<strong><span style="font-size:14px;"><span class="A0">Air operator’s certificate </span></span></strong></p>
<p class="Pa18">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Total AOC issued – 69 </span></span></p>
<p class="Pa18">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Valid AOC – 39 </span></span></p>
<p class="Pa18">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Invalid and Cancelled –30 </span></span></p>
<p class="Pa18">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Airline in Operation –34 </span></span></p>
<p class="Pa18">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">AOC Valid but Not in Operation – 5 </span></span></p>
<p class="Pa18">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Helicopter Operator with Valid AOC –8 </span></span></p>
<p class="Pa18">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Fixed Wing Operator with Valid AOC –14 </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">Aviation Sports with Valid AOC –17</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;</span></span></p>
<p class="MsoNormal">
	<span style="font-size:16px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;</span></span></p>
<p class="MsoNormal">
	<span style="font-size:16px;"><strong><span color:="" myriad="" style="line-height: 115%; font-family: ">‘We must strengthen our democracy’</span></strong></span></p>
<p class="MsoNormal">
	 </p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span color:="" myriad="" style="line-height: 115%; font-family: ">&nbsp;<img alt="cover story december 2012" border="1" height="227" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/PRABHAKAR-SJB-RANA.jpg" vspace="10" width="200" /></span></span></p>
<p class="Pa0">
	<span style="font-size:14px;"><span class="A0">PRABHAKAR SJB RANA </span></span></p>
<p class="Pa0">
	<span style="font-size:14px;"><span class="A0">Chairman Emeritus </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A0"><span style="line-height: 115%; font-family: ">Soaltee Hotel Ltd, Crowne Plaza Kathmandu</span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A0"><span style="line-height: 115%; font-family: ">&nbsp; <br />
	</span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Sri Lanka, too, suffered from an armed insurgency which was more intense and persisted for a longer period than the Maoist conflict in Nepal. But Sri Lanka has been doing well in recent times, following the end of the violence there. In comparison, Nepal is not doing that well though the decade-long conflict was said have ended six years ago. In my view, our socio-economic condition is going downward at present. To become a prosperous nation with robust economy, we must groom and strengthen our democracy.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">As a matter of fact, the economy and social factors are inseparable and proportional to each other. At present, the inflation is on the rise and the main factor behind the gloomy picture is the decreasing exports. The political instability has held the nation a hostage. On the one hand, there is a positive progress in the tourism sector, while on the other, we haven’t made much difference. According to the October statistics, the international tourism market has witnessed a fall. So, we must acknowledge the fact that it’s high time that we became self-dependent and started thinking how to raise our market at the global level. <br />
	</span></span></p>
<p class="MsoNormal">
	<strong><span style="font-size:16px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;</span></span></strong></p>
<p class="MsoNormal">
	<strong><span style="font-size:16px;"><span color:="" myriad="" style="line-height: 115%; font-family: ">‘Peace process did not bring optimism for investment’</span></span></strong></p>
<p class="MsoNormal">
	 </p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span color:="" myriad="" style="line-height: 115%; font-family: ">&nbsp;<img alt="cover story december 2012" border="1" height="205" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/DR-PRAKASH-CHANDRA-LOHANI.jpg" vspace="10" width="200" /></span></span></p>
<p class="Pa0">
	<span style="font-size:14px;"><span class="A0">DR PRAKASH CHANDRA LOHANI </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A0"><span style="line-height: 115%; font-family: ">Economist</span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A0"><span style="line-height: 115%; font-family: ">&nbsp;</span></span></span></p>
<p class="MsoNormal">
	The average growth rate of the Nepali economy was around five percent during the 1990-2000 decade, despite the beginning of the decade-long Maoist civil war in 1996. However, after the peace process, there was a slowdown in the economy, mainly because of the lack of new investments. One reason for this might be there were an increasing number of improper investments, misuse of money and leakage in investments.</p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Post the peace process, the government had no plan for investment and it could not guarantee the investors for business in Nepal. There were ongoing big budget programmes but with no productivity. A lot of money was wasted in unproductive sectors which led to the failure of Nepali economy to achieve even the minimum growth.</span> <br />
	</span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">The peace process, unlike the people’s expectations, did not bring optimism and as a result, the economy could not prosper in the post-conflict period. Uncertainty and political unrest were the major reasons behind this. </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">Now, the country has no regular income source because of high rate of unemployment. Young people are wandering all over the world like never before - only to earn. Unless they are employed, the country cannot generate income. If we want to reform our economy we need to minimize the political risks. Drafting the new constitution and creating conducive environment for investors will surely bring positive changes in the Nepali economy.</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;</span></span></p>
<p class="MsoNormal">
	<strong><span style="font-size:16px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;</span><span color:="" myriad="" style="line-height: 115%; font-family: ">‘Intra- party consensus on economic issues’</span></span></strong></p>
<p class="MsoNormal">
	 </p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span color:="" myriad="" style="line-height: 115%; font-family: ">&nbsp;<img alt="cover story december 2012" border="1" height="225" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/PROF-DR-BISHWAMBHER-PYAKURYAL.jpg" vspace="10" width="200" /></span></span></p>
<p class="Pa0">
	<span style="font-size:14px;"><span class="A0">PROF DR BISHWAMBHER PYAKURYAL </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A0"><span style="line-height: 115%; font-family: ">Economist</span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A0"><span style="line-height: 115%; font-family: ">&nbsp; <br />
	</span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Historically there seems to have been positive relation between economic development and political stability in Nepal. However, it is difficult to find the exact relation in the current scenario. It is mainly because Nepal could not prosper after the peace process when compared to the time of conflict. For example, Iraq, a country in Western Asia is achieving a double digit growth despite such a shaking unrest. We don’t find a relation between political instability and economic growth there.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Nepal’s growth rate was four percent during the years 1997- 2003 and three percent during 2003- 2008. Before the Maoist war, the average growth rate was four percent, but it decreased by one percent after the peace process. During the insurgency, there was an increase in unemployment, devaluation of the Nepali currency, economic imbalance etc but the economic growth was not that uncertain and many development projects were going on. However, after the peace process, many projects were either postponed or discontinued because of the lack of trust in the government. Last year only, donors decreased their assistance by 48 per cent.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Political stability is supposedly the backbone of economic stability. Therefore, politicians should understand that politicization of economic agendas is never fruitful. With the erosion of political credibility, the trend of Nepalis investing outside the country has been on the rise. The government has fallen short of motivating and inspiring the private sector. Even more alarming, perhaps, is the ever rising exodus of the productive population – the age group of 16 to 29 – for foreign employment. Remittance, a not-so-dependable source in today’s global politico-economy, has kept the Nepali economy afloat so far.</span> <br />
	</span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">The common people do not care which party or person is in power; all that they care about, perhaps, is how the inattention to the country’s economic agendas is affecting their lives. Now the economic situation is unpredictable. If this situation continues, the possibilities of less production, labour migration, capital flight, uncertainty, insecurity for investors will rise for sure. Economic issues should not become the victim of anybody’s vested political interest. We can have a continuous growth in the economy if the political leaders are ready for it. </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">There should be an inter-party consensus on high priority sectors such as health and education. This has become very urgent and it’s high time that the politicians felt this urgency. There should be consensus at the policy level for the implementation of the economic agendas. This is the only way to regain the people’s support and trust which is very vital for sustaining the political change and preventing economy flight. Our policies and legal framework, too, should be predictable. I wonder why our politicians couldn’t learn to agree on the common economic agendas. However, I am optimistic that they will, someday.<br />
	</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;</span></span></p>
<p class="MsoNormal">
	<span style="font-size:16px;"><strong><span color:="" myriad="" style="line-height: 115%; font-family: ">‘Stable government is a must for development’</span></strong></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span color:="" myriad="" style="line-height: 115%; font-family: ">&nbsp;<br />
	<img alt="cover story december 2012" border="1" height="257" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/DR-CHIRANJIBI-NEPAL.jpg" vspace="10" width="200" /><br />
	</span></span></p>
<p class="Pa0">
	<span style="font-size:14px;"><span class="A0">DR CHIRANJIBI NEPAL </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A0"><span style="line-height: 115%; font-family: ">Economist</span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A0"><span style="line-height: 115%; font-family: ">&nbsp;</span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Economic activities in Nepal were highly affected during the years 1996- 2000, leading to a low economic growth. The economy’s downward spiral started in 1996, and after the year 2001, the changes became noticeable with the growth turning negative. It was when Nepal started being compared with conflict-hit countries such as Burundi and North Korea.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">The worst-hit sectors were industry and manufacturing, declining from 16 per cent in 2001 to six per cent in 2006. This massive decline in economic activities and closure of the industries hit the economy hard. The resulting negative growth introduced foreign employment as a major business. Weak export and nil employment were the main features of the economy back then. The trend of foreign employment peaked while export saw a massive decline from 2000 to 2006. The contribution of remittance to the GDP was higher than that of total export. After 2006, the situation was expected to improve. But it did not, with the economic growth rate hovering around barely above six per cent. The growth rate saw a downward trend again in the years 2008-2012, with an average of three per cent.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Nepal is losing its international credibility, thanks to the current political mismanagement. A clear indicator for this is the decline in the annual foreign direct investment (FDI) inflow which has decreased from Rs 9 billion nine years back to around Rs 7 billion at present. For survival, the country depends as much on remittance as the Netherlands once relied on its oil resource. If the remittance inflow follows a downward trend, what will be the future of Nepal?</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Remittance is simply undependable as a means to sustain the economy in the long run. Also, its inflow which depends on a number of external factors is unpredictable. It is a kind of slow poison which ultimately kills a nation in the course of time. The government has no strategies to generate employment in the country. When there is no productivity, how can we have growth? This is why our international trade comprises of 85 per cent import and a mere 15 per cent export. There is no fixed time for presenting the country’s annual budget, which has been delayed over and again. Meanwhile, the budget deficit has reached Rs 3. 87billion.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">It seems amazing that Sri- Lanka, which was growing at about five percent during the LTTE conflict, has been able to achieve a growth rate of more than seven per cent post the conflict. But Nepal, on the other hand, has failed to achieve any impressive growth rate even after the peace deal. I don’t understand why Nepal hasn’t witnessed a healthy economic growth though the decade-long armed insurgency here ended six years ago. Our major problem, perhaps, has been unstable government. Moreover, economic growth also depends on policy consistency and stability; Nepal lacks long-term government policies.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">Nepal has huge prospects in many sectors, including hydropower and tourism, which await their effective exploitation. For the past few years, Nepal’s average annual hydropower generation capacity has been only six mega-watts. At this rate, it will take us a century to produce 600 MW of hydropower. Our total hydropower potential is up to 63,000 MW. I am confident that we can bring about impressive changes over the next five years – there is no need to wait for another 25 years as suggested by some politicians - if we have a government stability and policy consistency. <br />
	</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);"><br />
	</span></span></p>
<p class="MsoNormal">
	<strong><span style="font-size:16px;"><span color:="" myriad="" style="line-height: 115%; font-family: ">‘We lack clear economic policies’</span></span></strong></p>
<p class="MsoNormal">
	<img alt="cover story december 2012" border="1" height="222" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/DR-DILLIRAJ-KHANAL.jpg" vspace="10" width="200" /></p>
<p class="Pa0">
	<span style="font-size:14px;"><span class="A0">DR DILLIRAJ KHANAL </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A0"><span style="line-height: 115%; font-family: ">Economist</span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A0"><span style="line-height: 115%; font-family: ">&nbsp;</span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Compared to other Asian countries, Nepal always has had a slow growth rate. Nepal’s economy started slowing down further after 1995; the effects of this were quite visible during the years 2000-2005. The armed Maoist insurgency certainly had some impact on the Nepali economy, but it was only a marginal impact.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Unlike in many African nations which have been through conflicts, the negative impacts of the Maoist insurgency on Nepal’s economy became more perceptible after the beginning of the peace process. Nepal hasn’t seen the kind of economic growth which normally follows the establishment of peace after a long period of conflict in any country. This is mainly because we could not give priority to our economic issues.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">The fact that the political parties in Nepal cannot agree on even presenting the country’s full national budget on time speaks volumes about our current problems. The country could not get its annual budget on time, except for one fiscal year, after the start of the peace process in 2006. It is unfortunate that the politicians have failed to focus on the country’s economic agendas over this period. Their concern for the worsening economy is limited to slogans and speeches only. In reality, their only concern is how to get the reins of power. Power is what they have been fighting for all these years, after the signing of the peace deal.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">We don’t have the pre-requisite for development, either. For example, we lack the infrastructures that are a must for a big-budget project to run smoothly. We haven’t been able to encourage local as well as foreign investors to invest in the country. High transaction costs, power shortage and water scarcity have made it further difficult to sustain the industry. In addition, the investors find the overall environment in the country not conducive for investment.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">There is uncertainty in the global environment and the political instability in Nepal has made achieving economic prosperity further difficult. My research on finding the sources of economic growth also suggests the need to have proper economy and to make good policies to implement them. If we do it, we can have high growth rate in coming 10 years- and we don’t need to wait for 2030. Nepal can benefit from the development of global economic hubs like China and India as well. We could increase our income by five times what we earn today. We can have better economy than the newly emerged economies like Malaysia, UAE and other Gulf countries.</span> <br />
	</span></p>',
			'published' => true,
			'created' => '2013-01-04',
			'modified' => '2013-02-07',
			'keywords' => '',
			'description' => 'Five years before the Maoist insurgency started in Nepal in 1996, Nepal’s GDP growth rate was approximately 5.34 percent per annum. The growth rate plunged to 3.36 percent per annum in 2006, the year the underground Maoists came over-ground following the success of the peaceful April Uprising (Jana Andolan II) and the subsequent restoration of the dissolved House of Representatives in April 2006. The economy’s growth rate kept fluctuating over the next five years till 2011.',
			'sortorder' => '658',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 8 => array(
		'Article' => array(
			'id' => '739',
			'article_category_id' => '40',
			'title' => 'Cover Story November 2012',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	COVER STORY</div>
<div>
	<span>By Pinaki Roy (with inputs from Sushila Budhathoki, Bivek Dhakal and Abha Dhital)<br />
	<br />
	<br />
	<img alt="coverstory" border="1" height="362" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/coverstory(3).jpg" vspace="10" width="400" /><br />
	</span></div>
<div>
	 </div>
<div>
	Corporate Buildings</div>
<div>
	<span>Customised Business Premises as Corporate Fad</span></div>
<div>
	 </div>
<div>
	<b>Corporate houses in Nepal are attracted towards having their own buildings with a vision to make business operations easier and less time consuming among a host of other reasons. The trend of getting customized buildings constructed has caught up fast with the corporate entities in the last one-and-a-half decade or so, observe analysts.</b></div>
<div>
	 </div>
<div>
	<span>G</span>etting a building constructed for business purposes is becoming a onetime and long-term investment for the corporate groups in the country. Om Rajbhandary, the Chairman of Brihat Investments Pvt Ltd credits the banking sector for starting the trend. He says, “The banks were among the first ones to have their own buildings constructed while the other sectors followed suit in the last 15 years or so.”</div>
<div>
	 </div>
<div>
	 </div>
<div>
	Operating from rented offices is becoming a thing of the past. By having their own buildings, corporate big-wigs are focusing more on creating an impression on their business associates and the clientele at large. People usually perceive a corporate house to be of a certain standard if it owns a building. Kumar Lamsal, the CEO of Sanima Bank believes, “It directly relates to the image of a company that can neither be built nor destroyed in a day.” He explains that though one has to spend a huge amount in constructing own building, “The benefits are for many years to come and the cost will be ultimately compensated in the long run.”</div>
<div>
	 </div>
<div>
	 </div>
<div>
	From a global perspective too, the need of the hour for businesses is to opt for high rise buildings. It is more so in the case of Nepal where there is little land to spare in urban areas, especially in Kathmandu, where most corporate houses operate from. The multi-storied corporate buildings serve as easy means to minimize uncontrolled urbanization as well as the completion cost of the buildings. “I believe that the corporate big-wigs building skyscrapers for their organizations is a positive initiation given the rapid flow of unmanaged urbanization in Kathmandu,” says Bishnu Panthee, the Vice President of the Society of Nepalese Architects (SONA). He adds that there aren’t any viable options other than building high rises in the capital as the city needs to adapt to the latest trend and move ahead with the times.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	The charm of working when you are using your own resources makes the working environment more conducive and also boosts the workers’ moral spirit. Working environment plays a vital role in productivity and a good infrastructure certainly leaves a good impression on the minds of the internal as well as external customers. A well furnished and equipped office space helps to maintain reputation and image of the companies. Round the clock CCTV and security system, high speed elevators, fire fighting system, emergency exits, telephone facilities on demand, adequate parking space, power back-up system, earthquake resistant structures and external finishing are features and facilities that the corporate buildings provide.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	There is a deep-rooted concept in the psyche of a regular Nepali that people who have their own houses are stable. “Having own building for corporate and business purpose feels no different and hence, can’t be termed as an exception,” asserts Rajbhandary. He adds, “It is high time indeed for the corporate houses to move on with their own resources.” Lamsal agrees and cites the convenience of conducting business operations from own premises as an overriding reason for the decision to have ‘Alakapuri’, Sanima Bank’s corporate headquarters. He adds, “For a bank, owning a building means a lot and having it has always been one of our priorities. We needed the building to run our business in the most efficient manner possible.”</div>
<div>
	 </div>
<div>
	The trend for owning customized buildings has emerged as a requirement for the Nepali corporate houses. To have your own building makes you feel like you have everything in your business, say experts. “You are comfortable in that building because it’s made as per your requirements and hence, it has become common for corporate houses these days to treat this factor on a prioritized basis.” The sense of pride and ownership in having one’s own office premises is a temptation that most corporate companies are finding hard to resist and one that promises to grow stronger as time passes.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	 </div>
<div>
	 </div>
<div>
	<span>Sanima Bank<br />
	<br />
	<img alt="sanima bank" border="1" height="346" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/sanimabank(1).jpg" vspace="10" width="400" /><br />
	<br />
	</span></div>
<div>
	Commonly known as Sanima Bank building, the ‘Alakapuri’ building is situated in Naxal. Designed by Architect Dr Prakash Bir Singh Tuladhar of New Progressive Designers, it has a contemporary design with structural glazing facade. While Vastu has been adhered to, it also has a fountain and basement parking. This six storied building with a total area of approximately 47,000 sq ft can accommodate up to 300 work station at one time. It also has elevator and automatic sensor doors in each floor. Approximately, Rs 350 million was invested in the building which took three years to complete and came into operation in January this year.</div>
<div>
	 </div>
<div>
	<br />
	 </div>
<div>
	<span>Butwal Power Company<br />
	<br />
	<img alt="butwal power company" border="1" height="149" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/butwal-power-company(1).jpg" vspace="10" width="171" /><br />
	<br />
	</span></div>
<div>
	Butwal Power Company (BPC), located in Buddhanagar, is designed by Innovative Createers Pvt Ltd. This nine storied building with a basement and gross area of 50,000 sq ft can accommodate up to 300 employees. While the building is mostly based on Vastu, it also portrays the Green Building concept with an objective of being LEED (Leadership in Energy and Environment Design) certified project to be issued by USGBC (US Green Building Council). The BPC building has Earth Air Tunnel with solar system for continuous hot/cold air, Wind Turbine (3KW capacity) with battery hybrid system, Anaerobic Sewage Filter System, double glazed window system for energy optimization, deep boring for water supply, and LED lights. Its underground parking system can accommodate up to 50 vehicles at a time. It has two elevators and a terrace garden of approximately 15000 sq ft in area. With open office arrangement, the building also has a pantry in each floor. Approximately, Rs 300 million was invested in the building which took three years to complete and came into operation in August this year.</div>
<div>
	<br />
	<br />
	 </div>
<div>
	<span>Bhat Bhateni Super Market<br />
	<br />
	<img alt="bhat bhateni" border="1" height="290" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/bhatbhatenisupermarket(1).jpg" vspace="10" width="338" /><br />
	<br />
	</span></div>
<div>
	The corporate building of Bhat Bhateni Super Market is situated in Tangal. With a total area of 85,000 sq ft, the building has five floors. This Seismic Resistant Structure designed by Tanka Bahadur Shrestha is also based on Vastu. The building that has a massive accommodation capacity was constructed in several phases. It has five escalators and a 13 person capacity elevator. The parking area for customers has room for 75 cars and 400 motorcycles. The building also has a 24 hours generator backup system.<br />
	<br />
	 </div>
<div>
	 </div>
<div>
	<span>Prabhu Finance Company<br />
	<br />
	<img alt="prabhu" border="1" height="340" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/prabhufinancelimited(1).jpg" vspace="10" width="400" /><br />
	<br />
	</span></div>
<div>
	The corporate building of Prabhu Finance Company Limited located in Lainchaur is designed by Dr Prakash Bir Singh Tuladhar. This contemporary building has six floors and an area of 26,300 sq ft. This building can accommodate up to 250 people at a time. A total of Rs 100 million was invested in the construction of the building that took 18 months to complete. The building has pantry, elevator and a basement parking area.<br />
	<br />
	 </div>
<div>
	 </div>
<div>
	<span>Shikhar Biz Centre<br />
	<br />
	<img alt="shirkhar" border="1" height="335" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/shikarfinancelimited(1).jpg" vspace="10" width="391" /><br />
	<br />
	</span></div>
<div>
	Shikhar Biz Centre situated in the heart of Thapathali boasts of seven floors. Designed by Vastukala Paramarsha, the building is vastu friendly. The design of Shikhar Biz Centre has a contemporary look and the owner Shikhar Insurance operates from the fifth, sixth and seventh floors. With an investment of about Rs 200 million, the building took four years to complete construction. The building has an area of 5500 sq ft and includes a small lawn and underground parking. The building has two elevators, a staircase and an emergency staircase.</div>
<div>
	<br />
	<br />
	 </div>
<div>
	<span>Rastriya Banijya Bank<br />
	<br />
	<img alt="rastriya banijya bank" border="1" height="411" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/rastriyabanijyabank(1).jpg" vspace="10" width="485" /><br />
	<br />
	</span></div>
<div>
	The design and supervision of Rastriya Banijya Bank (RBB) was done by Rachana Consulting Architects and Engineers Pvt Ltd. RBB, government owned and the largest commercial bank in Nepal, was established in 1966. According to an RBB source, a French lady was the architect of the building. Located in close proximity to Singha Durbar, the seven storied building has an accommodation capacity of 500 people. With an investment of Rs 110 million, it took two years to complete construction. The main building, built in an area of 11 ropanis, was officially inaugurated in 2055 BS. The building has a parking area, a garden and three big halls. The special feature of building is that all the rooms receive adequate natural light. The Bank also has a cafeteria for the staff and two elevators.<br />
	<br />
	 </div>
<div>
	 </div>
<div>
	<span>Lomus Pharmaceuticals<br />
	<br />
	<img alt="lomus" border="1" height="276" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/lomusparmcuticals(1).jpg" vspace="10" width="320" /><br />
	<br />
	</span></div>
<div>
	Bishnu Panthee, the Vice President of Society of Nepalese Architects (SONA) is the architect of Lomus building situated at Lazimpat. While talking about Vastu, minute details have been taken into consideration and the building has a contemporary look. It has three-and-a-half floors with an overall accommodation capacity of 80 people. It took around seven months to complete the construction of the building. Constructed with an investment of about Rs 40 million, the Lomus building built on an area of 20 annas has been in operation since the last seven years. It also boasts of a spacious parking lot and a big hall.<br />
	<br />
	 </div>
<div>
	 </div>
<div>
	<span>Siddhartha Insurance<br />
	<br />
	<img alt="siddhartha" border="1" height="368" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/siddharthainsurance(1).jpg" vspace="10" width="431" /><br />
	<br />
	</span></div>
<div>
	Vastu Kala Paramarsha designed the building of Siddhartha Insurance Limited located at Babarmahal and is vastu-friendly. The five-storied building has an accommodation capacity of 42 people on each floor. With an investment of approximately Rs 90 million, the construction started in 2066 BS and it took two-and-a-half years to complete. The building came into operation five months ago. The total area of the building is 12000 sq ft and has a double basement parking in addition to two elevators. The fourth and fifth floors of the building are used by Siddhartha Insurance. Similarly, rest of the floors are given on lease. The building has a special ‘Betel Leaf’ shape on the north east direction covering second, third and fourth floors.</div>
<div>
	<br />
	<br />
	 </div>
<div>
	<span>NMB Bank<br />
	<br />
	<img alt="nmb" border="1" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/nmbbanklimited(1).jpg" vspace="10" /><br />
	<br />
	<br />
	</span></div>
<div>
	The building and interior design of NMB Bank located at Babarmahal is done by Architecture Design Firm. The building of NMB is based on vastu and can accommodate around 250 people. The building has five floors and boasts of a contemporary look. It took around one-and-a-half years to complete the building construction, with an investment of Rs 50 million. The total land area of the building is 11529 sq ft with open space covering 6980 sq ft and plinth 4547 sq ft. The bank building has separate parking facilities for two wheelers and four wheelers. Similarly, the building has training and system rooms and has ensured efficient management of space for large number of staff in the main hall. The building also has an elevator.<br />
	<br />
	<br />
	 </div>
<div>
	 </div>
<div>
	<span>Ace Development Bank<br />
	<br />
	<img alt="ace" border="1" height="339" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/acedevelopmentbanklimited(1).jpg" vspace="10" width="400" /><br />
	<br />
	</span></div>
<div>
	The corporate building of Ace Development Bank located at Naxal in Kathmandu is designed by Architect Rajesh Shrestha from Vastukala Paramarsha Nepal. From the direction of the floor face to the positioning of different departments, the structure of the building is completely based on the instruction of Vastu expert Madhav Mangal Joshi. The four-storied building accommodates around 120 employees and is built on two ropanis while the total area of the building is 20,000 sq ft. The first phase of the construction was completed in one-and-a-half years which included the basement, ground floor and first floor. The rest of the construction was completed three months ago. The bank has utilized the space to the maximum; there is a basement with parking capacity for 27 cars, a conference hall with 100 people capacity, a garden inside the compound, and a cafeteria for the staff. It has meeting halls in each floor while rain water harvesting system makes the building unique among other corporate buildings.<br />
	<br />
	 </div>
<div>
	 </div>
<div>
	<span>Nabil Bank</span></div>
<div>
	<br />
	<img alt="nabil" border="1" height="341" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/nabilbanklimited.jpg" vspace="10" width="400" /><br />
	<br />
	 </div>
<div>
	Located at Durbarmarg, the heart of Kathmandu, the corporate building of Nabil bank has a combination of modern design and vastu. The building is designed by Design Cell Pvt Ltd and the annex building took about 12 months for the construction. The total area of the building is 53500 sq ft which has six floors including the basement. The bank shifted in the building in November 2010 which accommodates around 320 staff members. There is a roof top garden, two units of elevators and two staircases in the building. Basement parking is only meant for motorbikes while two other parking spaces behind the building are for other vehicles. The basement parking accommodates around 100 motorbikes while 40 big vehicles could be parked over the ground.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	 </div>
<div>
	 </div>
<div>
	<span>Saakha Halls<br />
	<br />
	<img alt="saakha halls" border="1" height="253" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/saakhahalls.jpg" vspace="10" width="293" /><br />
	<br />
	</span></div>
<div>
	 </div>
<div>
	The five-storied corporate building of Saakha Group located at Tinkune, Kathmandu is built as per pillar system and is contemporary in design. The building is built on 2.5 ropanis while the area of the building stretches about12500 sq ft. Since the building has window glasses on three sides, there is no need to switch on the lights during the day time. The group established their office in this building two years ago that accommodates around 200 people. There is a board meeting room, a visitors room for staff and a business room. Parking facility inside the compound is available with a capacity to accommodate 15 big vehicles and 25 motorbikes. A separate pantry for staff, a 100 KV transformer and lift facility are also part of the building.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	<span>Sarada Group<br />
	<br />
	<img alt="sa" border="1" height="278" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/saradagroup.jpg" vspace="10" width="400" /><br />
	<br />
	<br />
	</span></div>
<div>
	Sarada Group’s corporate building is located at Thapathali. Designed by Architect Rajesh Shrestha of Vastukala Paramarsha, the building is built on an area of two ropanis and stretches to 40000 sq ft. Constructed at a cost of around Rs 100 million, it can accommodate around 300 people. The building has six floors including the basement parking which accommodates around 100 motorbikes and 30 vehicles. There is also a motorbike parking over the ground within the compound area. The group is operating from the third floor of the building since the last three years and has rented other floors to various businesses. It also boasts of an elevator and generator back up.</div>
<div>
	 </div>
<div>
	<br />
	 </div>
<div>
	<span>United Traders Syndicate<br />
	<br />
	<img alt="united" border="1" height="343" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/unitedtradersyndicate.jpg" vspace="10" width="400" /><br />
	<br />
	</span></div>
<div>
	The corporate office of United Traders Syndicate, the sole distributor of Toyota vehicles in Nepal, was built more than 45 years ago. The building was further renovated 15 years ago at a cost of around Rs 50 million. Built from Nepali bricks, the building has the look of a typical Nepali house with a modern design. It accommodates around 120 staff members. The five-storied building has different departments in each floor including the Chairman’s office on the third floor, a conference hall on the fourth floor and a monitoring, controlling and processing room (MCP) on the fifth floor. The parking at the building accommodates around 30 big vehicles and 50 motorbikes. The building is built on six ropanis and also features a small garden, a workshop and a sales office.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	<span>Brihat Investment<br />
	<br />
	<img alt="brihat" border="1" height="359" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/brihatinvestment.jpg" vspace="10" width="415" /><br />
	</span></div>
<div>
	 </div>
<div>
	The corporate building of Brihat investment is designed by Architect Prathana Vaidya. The company has tried its best to incorporate every possible feature based on vastu from office cabin to its desk position. Contemporary in form, the building has features like duplex unit with eight rooms, two board rooms, executive board room and an executive lounge. Lawns, separate parking areas for motorbikes and cars, pantry and a spacious garden are also part of the building. The 3500 sq ft building took one year to complete with an investment of Rs 40 million. The company shifted in this building in 2010 which also has an elevator facility. Brihat Investment itself designed the building with the concept of an open office plan for easy and cross communication between the departments as well as to take maximum advantage of the natural light.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	<span>NIC Bank<br />
	<br />
	<img alt="nicbank" border="1" height="368" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/nicbank.jpg" vspace="10" width="448" /><br />
	<br />
	<br />
	</span></div>
<div>
	 </div>
<div>
	The Biratnagar corporate office of NIC Bank is housed in a classical building on the city’s main road. Internal layout of the building is according to Vaastu and the designing credit goes to Adf Nepal. It is a two-storied building with 17 office rooms including four different halls namely customer services, board room, trade finance and company secretary. The building is built in an area of 7290 sq ft land and the interior of the building measures 6578 sq ft. The parking space at the front is about 750 sq ft which is designated for customers while the parking space behind the building is for the staff. The building has accommodation capacity for 192 employees. There is a small garden and lots of indoor plants in the building.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	Disclaimer</div>
<div>
	 </div>
<div>
	The corporate buildings featured in this article were covered as per the following criteria:</div>
<div>
	 </div>
<div>
	<span>1)<span>       </span></span>Only the corporate buildings that were conceptualized by the owning companies/business groups themselves were taken into account.</div>
<div>
	 </div>
<div>
	2) As per the criteria, the companies were expected to have their own corporate offices in the said buildings.</div>
<div>
	 </div>
<div>
	3) Even if some parts of the buildings were rented out/ leased to other businesses, they must largely reflect the identities of the (respective) majority stakeholders.</div>
<div>
	 </div>
<div>
	Additionally, we could only cover a limited number of corporate buildings for a variety of reasons and hence, the article does not represent an exhaustive list of buildings owned by corporate entities that we have in the country.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	COVER STORY</div>
<div>
	 </div>
<div>
	 </div>
<div>
	<span>‘It’s the Need for Businesses to Opt for Skyscrapers’</span></div>
<div>
	 </div>
<div>
	<img alt="bishnu" border="1" height="323" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/bishnupanday.jpg" vspace="10" width="293" /><br />
	<strong><br />
	</strong></div>
<div>
	<strong><span>BISHNU PANTHEE </span></strong></div>
<div>
	<strong><span>Vice President </span></strong></div>
<div>
	<strong><span>Society of Nepalese Architects (SONA)</span></strong></div>
<div>
	<strong><br />
	</strong></div>
<div>
	 </div>
<div>
	 </div>
<div>
	<strong>How do you comment on the recent trend of corporate houses to have custom built office buildings?</strong></div>
<div>
	 </div>
<div>
	I believe it is a positive initiation given the unmanaged urbanization in Kathmandu. The major factors of zoning and the high and low rise structures, however, should be carefully implemented while constructing custom office buildings. Such initiatives should be approved keeping in mind the safety and security factors first. Nonetheless, there should also be proper implementation of land use maps by abiding the theory of urbanization.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	 </div>
<div>
	<strong><br />
	</strong></div>
<div>
	<strong>Tell us about the experience of SONA while dealing with the corporate houses in such matters?</strong></div>
<div>
	<strong><br />
	</strong></div>
<div>
	The main concern here is the high cost of land in Kathmandu. In rising cities like Kathmandu, such artificial hikes make it difficult for the owners to purchase land for construction. It also adds more challenges on the part of SONA. Being an umbrella association of Nepali architects, SONA has experienced several ups and downs. Sometimes, our designs have also been misused. We use theory, knowledge and modern technologies in our practice. However, we still lag behind when it comes to proper implementation of the same. Ultimately, the high cost of land causes hiccups and the projects become more expensive than is expected.</div>
<div>
	 </div>
<div>
	<strong><br />
	</strong></div>
<div>
	<strong>So what could be the solutions to minimize the risks?</strong></div>
<div>
	 </div>
<div>
	To begin with, legal measures to control the artificial price of land should be taken into consideration. We haven’t strengthened ourselves technically as well as legally. Therefore, infrastructure development should be well governed and monitored by the authorized policy makers to minimize the risks. As we are rich in antique designs, much research should be done to dig into our architectural history that is unknown to most people.</div>
<div>
	 </div>
<div>
	<strong><br />
	</strong></div>
<div>
	<strong>What are the government policies in place given that Kathmandu falls under a fragile seismic zone and is highly prone to earthquakes?</strong></div>
<div>
	<strong><br />
	</strong></div>
<div>
	The government policies don’t reveal much and are also not up to the mark when compared to the global phenomenon. The loose monitoring system and purview sometimes make it so hard for us that we have to take steps to take matters into our own hands. Besides, the lack of tight scrutiny and invigilation cause the projects to fizzle out. Nevertheless, we are doing our best to comply with the basic standards. Regarding the Kathmandu Valley part of the fragile seismic, we believe that there is a solution to every problem. For example, in the case of Japan, there are many high rise buildings and the country is prone to earthquakes. If proper monitoring, quality maintenance, awareness and utilizations are in place, then we can definitely minimize the risks involved.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	<strong>What is your comment on the trend of corporate houses opting to build skyscrapers in the current scenario?</strong></div>
<div>
	 </div>
<div>
	While analyzing the trend from a global perspective, it is the need of the hour for businesses to opt for skyscrapers. In our case, I see the skyscrapers as a welcome respite to the mismanaged urbanization. Additionally, it also minimizes the projects’ completion cost. We don’t have any viable options and must adapt to the latest technologies practiced globally.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	<strong>How is SONA addressing the unethical practices in this business?</strong></div>
<div>
	<strong><br />
	</strong></div>
<div>
	SONA is an independent non-profit and professional association of architects in Nepal. We are the voice for the architects and work to protect their rights. Therefore, we try our best to discourage any unethical practices at all times. We meet and hold discussions within the association as and when any untoward and malicious situation arises. Even though we may not take any official action, we definitely try to expose such practices in the public domain.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	<strong>How do you perceive the artistic choice of the architects themselves while building these corporate offices?</strong></div>
<div>
	 </div>
<div>
	Quite literally, SONA is here to add glitter to gold. An individual architect always strives to seek his/ her identity at some point or the other. It is our responsibility to help realize that vision for every architect. For example, if someone comes with a creative design, then we scrutinize the work and finalize the decision on a bilateral basis. Therefore, the creativity of an architect’s work can be well explored ultimately. The brand value consciousness is also a prime concern for us to safeguard the professional rights and interests of the architects.</div>
<div>
	 </div>
<div>
	<strong><br />
	</strong></div>
<div>
	<strong>What are major points to consider for ideal office buildings in commercially burgeoning cities like Kathmandu?</strong></div>
<div>
	<strong><br />
	</strong></div>
<div>
	The recently built commercial buildings in Kathmandu should be careful that the historical and cultural importance of antique buildings is not disturbed. In the quest for constructing swanky buildings, the artistic values of endangered heritages must not be compromised with. Taking it as our social responsibility, SONA has discouraged such acts. For example, we have been opposing the construction of high rise buildings around Dharahara, for example, and raising our voice to keep ancient art intact while renovating old temples across Kathmandu.</div>
<div>
	<strong><br />
	</strong></div>
<div>
	<strong><br />
	</strong></div>
<div>
	<strong>Do you think the investments made by corporate houses in constructing own buildings pay them in the long run?</strong></div>
<div>
	 </div>
<div>
	This depends on the will power of the investors to cope with the challenges ahead. Given the uncertain political state of the country and ineffective policies as regards the housing sector, our path is full of thorns. The first and foremost concern is the artificial price of land. Therefore, if these issues are properly addressed, the situation may get better for the corporate houses.<br />
	<br />
	<br />
	 </div>
<div>
	 </div>
<div>
	<strong><span>‘Owning a Building Helps a Corporate House Enhance its Brand Image’<br />
	<br />
	</span></strong></div>
<div>
	<strong><br />
	<br />
	<img alt="kumar" border="1" height="320" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/kumar.jpg" vspace="10" width="278" /><br />
	</strong></div>
<div>
	<strong><br />
	</strong></div>
<div>
	<strong><span>KUMAR LAMSAL </span></strong></div>
<div>
	<strong><span>CEO, Sanima Bank</span></strong></div>
<div>
	 </div>
<div>
	 </div>
<div>
	<strong>What is the reason behind naming Sanima Bank’s building ‘Alakapuri’?</strong></div>
<div>
	 </div>
<div>
	It is because Alakapuri refers to the state ruled by Kuber, the lord of wealth. Hence, we decided to name our building after his empire because he is worshipped as an important god when it comes to money and business.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	<strong>How do you envision the latest trend of corporate houses owning swank buildings? Do you perceive this as the need of the hour for corporate houses to construct their own buildings?</strong></div>
<div>
	 </div>
<div>
	I don’t think it is compulsory or urgent for any of us to own buildings. Constructing own building depends on one’s choice and the kind of business they run. However, I think such a trend has emerged as a requirement for corporate houses where it has become increasingly important to own a building. It is a psychological factor where owning a building makes you feel secure and gives a sense of achievement. You are comfortable in that building because you have made it as per your requirements. Hence, it has become common for corporate houses these days to follow this trend.</div>
<div>
	 </div>
<div>
	<strong><br />
	</strong></div>
<div>
	<strong>Specifically speaking, what is it that led Sanima Bank to construct its own building?</strong></div>
<div>
	 </div>
<div>
	For a bank, owning a building means a lot. It leaves a good impression on the public in terms of an enhanced brand image. A bank usually works for a long term and since we are here in this business for a long time now, having our own building has had been one of our priorities. We needed the building mainly to run the business properly.</div>
<div>
	Could you please tell us about the investment that has been made in the construction of your new premises?</div>
<div>
	We have invested around Rs 34 million on the construction of the building which took three years for its completion.</div>
<div>
	<strong><br />
	</strong></div>
<div>
	<strong>Do you think the investments made in their own buildings pay the corporate houses in the long run?</strong></div>
<div>
	 </div>
<div>
	Constructing your own building itself is a long term investment for the corporate houses. It directly relates to the image of the company that can neither be built nor destroyed in a day. Although our cost is higher in comparison to the cost in the rented building that we operated from earlier, the benefits are for many years to come. We have indeed spent a huge amount in constructing the building but in the long run, that cost will be compensated in due course of time. People usually perceive a corporate house to be enjoying a certain standing if it owns a building. And the good news is; our building has started attracting walk-in clients already.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	<strong>How significant is it for you to have constructed your own corporate building and then conducting business operations from it?</strong></div>
<div>
	 </div>
<div>
	It has been significant for us primarily because we have constructed it as per our demand and design. It is based on our choice and the way the building has been constructed meets our business demand too. We are very happy to be operating from our own office and it has certainly fulfilled our expectations. Its interior design is as good as the exterior design and has more space. It is also an attractive and strong structure while the previous building was small and congested. At the end of the day, it is easier to conduct business operations from ‘Alakapuri’.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	<strong><span>‘It’s High Time for Corporate Houses to have their Own Resources’<br />
	<br />
	<br />
	<img alt="om" border="1" height="338" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/om.jpg" vspace="10" width="294" /><br />
	<br />
	</span></strong></div>
<div>
	<strong><span>OM RAJBHANDARY </span></strong></div>
<div>
	<strong><span>Chairman, Brihat Investments Pvt Ltd</span></strong></div>
<div>
	 </div>
<div>
	<strong><br />
	</strong></div>
<div>
	<strong>How old is the trend of corporate entities in Nepal moving from rented premises to their own building?</strong></div>
<div>
	<strong><br />
	</strong></div>
<div>
	If we look at the corporate culture in Kathmandu, much of the credit for this trend goes to the banking sector. They initiated it and for around 15 years now, corporate houses started having their own buildings in Kathmandu. Earlier, it was limited because most of the businesses were family-run entities. Most of the corporate houses today boast of their resources within their own premises.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	<strong>How do you envision the latest trend of corporate houses owning swank buildings? Do you perceive this as need of the hour for corporate houses to construct their own buildings?</strong></div>
<div>
	 </div>
<div>
	Yes it is high time for the corporate houses to move on with their own resources. The vital aspects of a business - property, productivity and perception should not be forgotten at any point of time. While on one hand, we lack productive infrastructure, we are keeping a tight vigil even on minor things like the use of electricity and interior designs on the other. For the entrepreneurs to start new businesses, they must increase the size of their functional area to strengthen productivity. If property area and services planning etc are not done properly, the expenses are going to be that much higher. In the present context, these things amount to savings because of the one-time investment one is putting in. Besides, people’s perception of you is different when you are staying in a rental office and don’t have your own resources. According to our traditional concept, we believe that people who own a house are stable in life. Having one’s own space in the office and possessing the premises saves on the rental.</div>
<div>
	 </div>
<div>
	<strong><br />
	</strong></div>
<div>
	<strong>What is it that led Brihat Investment to construct its own corporate office building?</strong></div>
<div>
	 </div>
<div>
	Brihat is striving to construct environment friendly homes to cater the need of people and to help non-hazardous urbanization. Using your own resources makes the working environment more conducive and also boosts the workers’ spirits. That is the main reason for Brihat Investment to construct its own building.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	<strong>What would be an ideal investment for a corporate building?</strong></div>
<div>
	 </div>
<div>
	The cost depends on requirements and clear vision. The specific need of area, infrastructure and manpower should be the prime aspects to take care of rather than the monetary value itself while investing. Even the minute things like color choice, material choice, electricity and interior designs should be well scrutinized to minimize the ultimate cost. The choices should be clear and cost effective. For example, the trend of using LED lights is for a tangible benefit. If we move forward in a balanced way, it will not be a huge financial burden in the long run.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	<strong>How significant is it for you to have constructed your own building and then conducting business operations from the premises?</strong></div>
<div>
	 </div>
<div>
	When you own a building, all the requirements are met accordingly. People look at safety as the least concerned factor. That is wrong attitude. As Kathmandu lies in an earthquake prone area, certain safety measures should be taken into consideration. The distribution of things according to the need and demand is like an art. Good management is like oxygen, we should have proper utilization of our resources to get palpable benefit. If the structural cost comes around 10- 15 per cent, the cost for safety measures and needed infrastructure only takes an additional three per centof the building cost. Hence, having your own building is of great significance.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	 </div>
<div>
	<strong>Do you think the investments made in own buildings pay the corporate houses in the long run?</strong></div>
<div>
	 </div>
<div>
	This highly depends on the political and economic situation of the country. The real estate business is not going well at present as it used to be few years back. In reality, every flourishing business pays back to the society. Here, the fluctuating political situation and unmanaged policy has affected the business a lot. If the period of uncertainty continues, then the entrepreneurs will be forced to switch over to other business. Recently, some big hotels of Kathmandu have been turned into shopping malls and it can be taken as a good example. With regular and periodical review and a long term vision, the investment in owning buildings will certainly pay off for corporate houses in the long run.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	<strong><br />
	</strong></div>
<div>
	<strong>How challenging is it for you to keep abreast with the growing demand for new designs?</strong></div>
<div>
	 </div>
<div>
	It is challenging but the investors and the designers need to have more healthy discussions on this matter to mitigate those challenges. To me, innovative ideas come first. If a designer is precise about his ideas, he should persuade me to pursue his idea. There should be a fine balance between the designer and the building owners.</div>
<div>
	 </div>',
			'published' => true,
			'created' => '2012-12-06',
			'modified' => '2013-01-04',
			'keywords' => '',
			'description' => 'Corporate houses in Nepal are attracted towards having their own buildings with a vision to make business operations easier and less time consuming among a host of other reasons. The trend of getting customized buildings constructed has caught up fast with the corporate entities in the last one-and-a-half decade or so, observe analysts.',
			'sortorder' => '630',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 9 => array(
		'Article' => array(
			'id' => '718',
			'article_category_id' => '40',
			'title' => 'Labour Dilemma',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
<!--[if gte mso 9]><xml>
 <w:WordDocument>
  <w:View>Normal</w:View>
  <w:Zoom>0</w:Zoom>
  <w:TrackMoves/>
  <w:TrackFormatting/>
  <w:AutoHyphenation/>
  <w:PunctuationKerning/>
  <w:ValidateAgainstSchemas/>
  <w:SaveIfXMLInvalid>false</w:SaveIfXMLInvalid>
  <w:IgnoreMixedContent>false</w:IgnoreMixedContent>
  <w:AlwaysShowPlaceholderText>false</w:AlwaysShowPlaceholderText>
  <w:DoNotPromoteQF/>
  <w:LidThemeOther>EN-US</w:LidThemeOther>
  <w:LidThemeAsian>X-NONE</w:LidThemeAsian>
  <w:LidThemeComplexScript>X-NONE</w:LidThemeComplexScript>
  <w:Compatibility>
   <w:BreakWrappedTables/>
   <w:SnapToGridInCell/>
   <w:WrapTextWithPunct/>
   <w:UseAsianBreakRules/>
   <w:DontGrowAutofit/>
   <w:SplitPgBreakAndParaMark/>
   <w:DontVertAlignCellWithSp/>
   <w:DontBreakConstrainedForcedTables/>
   <w:DontVertAlignInTxbx/>
   <w:Word11KerningPairs/>
   <w:CachedColBalance/>
  </w:Compatibility>
  <w:BrowserLevel>MicrosoftInternetExplorer4</w:BrowserLevel>
  <m:mathPr>
   <m:mathFont m:val="Cambria Math"/>
   <m:brkBin m:val="before"/>
   <m:brkBinSub m:val="--"/>
   <m:smallFrac m:val="off"/>
   <m:dispDef/>
   <m:lMargin m:val="0"/>
   <m:rMargin m:val="0"/>
   <m:defJc m:val="centerGroup"/>
   <m:wrapIndent m:val="1440"/>
   <m:intLim m:val="subSup"/>
   <m:naryLim m:val="undOvr"/>
  </m:mathPr></w:WordDocument>
</xml><![endif]--></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A14"><span style="font-family: ">By Gaurav Aryal</span></span></span></p>
<p>
	<span style="font-size:14px;">&nbsp;</span><span style="font-size:14px;">&nbsp;</span><span style="font-size:14px;"> </span></p>
<p class="Pa9">
	<strong><span style="font-size:14px;"><span class="A15">Labour Dilemma </span></span></strong></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span class="A34"><span style="line-height: 115%; font-family: ">An Analysis of Labour Issues Facing Nepal</span></span></span></strong></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span class="A34"><span style="line-height: 115%; font-family: ">&nbsp;<img alt="labor cover story" border="1" height="495" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/cover2.jpg" vspace="10" width="400" /></span></span></span></strong></p>
<p class="Pa25">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:normal"><span style="color: rgb(34, 30, 31);">On the eve of celebrating Nepal Investment year 2012/13, over unionisation of labour has continued alarming foreign investors and discouraging local investors to venture into new industries. Multiple unions affiliated to more than one political party exist within a company. Such politicisations of labour unions have resulted in inter union and employee-employers rifts that significantly reduce productivity along with losses of working hours. </span></b></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:normal"><span style="line-height: 115%; color: rgb(34, 30, 31);">Political instability, labour problems and power supply are said to be the major causes of poor investment climate in Nepal. According to a survey report of 2009 conducted by enterprisesurveys.org, political instability is the major constraint for doing business followed by power shortage and labour problems respectively.</span></b></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:normal"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;<img alt="political " border="1" height="270" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/cover1(1).jpg" vspace="10" width="257" /></span></b></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A4">A</span><span style="line-height: 115%; color: rgb(34, 30, 31);">ccording to Bishnu Rimal, President of General Federation of Nepalese Trade Unions (GEFONT), there are 353,000 individual members of GEFONT and altogether 29 affiliates. Similarly, there are 800,000 members in All Nepal Trade Union Federation (ANTUF) which has 42 different professional organisations as affiliates., There are around 286 trade unions registered at the Department of Labour (DoL) that are affiliated to 10 trade union federations. A total of 86 new unions have been added after the People’s Movement II, six years ago, when there were 200 unions in the fiscal year 2005/06. According to Manish Agrawal, Vice Chairman of Employers Council at FNCCI, there are 10 authorised trade unions (including GEFONT and ANTUF) at national level in Nepal and they are all affiliated to different political parties. These unions themselves are divided into different categories according to the nature of industry. There are separate unions on tourism, hospitality, service industries, banks and financial institutions and manufacturing sector rather than having branches of a unified labour union that represents overall workers from the entire business sector. <br />
	<br />
	According to World Bank data, labour unrest is one of the contributing factors for adverse investment climate. According to the Global Competitive Index 2012/13 prepared by the World Economic Forum, inadequately educated workforce is one of the major hurdles for doing business in Nepal. The same report ranks Nepal at 125th position on labour market efficiency out of 144 countries. Likewise, poor work ethic in national labour force was placed at 8th most problematic factors for doing business in Nepal.</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">In addition, restrictive labour regulations was placed in the 5th position under the same category. A report by Nepal Business Initiative (NBI) with support of South Asia Enterprise Development Facility presented to the Prime Minister in the last week of September, labour problem ranks as one of the major challenges faced by the Nepali economy. Similarly, the Global Competitiveness Report 2012–2013 lists various aspects related to the labour market of Nepal and their efficiency and their world ranking.</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">(See table).</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);"><img alt="table coverstory" border="1" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/table(1).jpg" vspace="10" />&nbsp;</span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">In nutshell, if the ongoing problem of power shortage is resolved today, labour problem will come up as the biggest hurdle to beat, for making the overall investment environment favourable for new investors and existing corporate houses. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa14" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Wrong Message to Investors </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">The never ending labour problems have given unintended messages to the local as well as foreign investors who are willing to venture into Nepal. Recent dispute in KFC and Pizza Hut has definitely given a wrong message to interested foreign investors. Similarly, Shikhar Shoes was closed after workers manhandled the Managing Director of the company and padlocked its factory at Goldhunga. It seems that labour unrest, one of the major roadblocks to higher investment, will continue unabated in the future too. </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">An investor usually looks to invest where there is favourable business environment. Experts believe that the labour issues have created a hostile environment to investments. Labour trouble experienced in Nepali units of multinational giants like Surya Nepal, Unilever, GMR and Asian Paints have turned off prospective investments to Nepal. A handful of such representative cases are enough to scare away either domestic or foreign investors. Khila Nath Dahal, Former Co-president of Nepal Trade Union Congress Independent (NTUC-I) and former President of Democratic Confederation of Nepalese Trade Union (DECONT) denied, “It is a false assumption that labours are the cause to repel the investment. Labours, investors themselves and the government policy. have roles in r creating threat to investors venturing new business in Nepal. Lack of infrastructural development like roadways, electricity and drinking water has also affected investment.” </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">However, Rimal claims that industrial strikes are in a decreasing trend. He said, “After 2008, the number of industrial strikes has been decreasing. Trade unions have contributed to only six per cent of the total work stoppages last year as around 28 per cent cases of such work stoppages were due to bandhas called by employers and the rest was contributed by political parties and other organisations.” </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Still, leading corporate houses like Chaudhary Group, Golchha Organisation, Dugar Group, among others say that due to unfavourable environment for the manufacturing sector, they have identified service sector as safer areas for investment. Service sector, except from tourism and hospitality, sees very few cases of labour strikes and union problems. These corporate houses have been minimising their foothold on manufacturing sector and moved onto the service sector like hospitality, education, banking and finance, healthcare among others. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp; <br />
	</span></p>
<p class="Pa14" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Over Politicisation of Workers </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Naturally, the private sector companies look to make profits. When the workers are involved in union activities, more than working for the company, it adversely affects the productivity. So, a voice for ‘No Work No Pay’ was raised by the entrepreneurs but it has not been implemented till date as trade unions have strongly opposed this proposal. </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Agrawal said that as per the international norms, the identity of a labour is associated with the industry. “On the contrary, the identity of the worker in Nepal is associated with the trade union to which they belong,” he clarified. </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Due to frequent strikes and even physical assault upon the employers and managers has led to closure of factories and companies. Foreign investors have shut down their industrial units and reduced their presence in the country. Agrawal said that Colgate-Palmolive is one such example. “Nepal is losing many investors because of labour problems. Recently, Surya Garment was also shut down due to labour problems,”. he said. However, Dahal says, “If the demands of employees are fulfilled they would not choose violent way to fulfil their demands. If one side does not provide basic rights of employees as stated in the Labour Law, then the other side would definitely not follow law and order also. This consequently results into imbalance between the employers and the employees.” </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">In many cases, once an issue is resolved at a point of time and place, even more severe ones are raised at the next point of time and place. Numerous industries have closed down and, looking at the recent examples of KFC and Pizza Hut, it cannot be ruled out that similar situation won’t arise in other companies too. </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Unruly unions are protected by the political parties who don’t tire talking about importance of bringing foreign investments. Different unions that belong to different political parties come up with different demands, mostly as dictated by the respective political party. Thus, there is conflict of interest and opinions among the unions themselves. They are primarily guided by party philosophy rather than working for creating a win-win situation for both employers and employees. Agrawal said, “The major problem of the trade unions in Nepal currently is that they are focused on following political ideologies of associated political parties rather than fulfilling the interests of workers.” </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">According to Agni Prasad Thapaliya, Judge at the Labour Court, one union does not allow formation of second union in the company. “In most cases, employees are not allowed to work without taking membership of a trade union and paying a levy to the union and inter-union rivalry has also become problematic. The same person is found involved in numerous unions,” he said. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa14" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Strange Demands </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">In a series of recent events, workers have come up with weird and strange demands. Labour unions at Hotel Greenwich Village, a three star hotel in Lalitpur, recently came up with a demand that their members be felicitated with a gold medal weighing one kilogram. Labour unions affiliated to the Maoists (the party that is leading the present coalition government) and CPN-UML party are pressing the hotel management submitting a 22 point demand paper.. According to the demand paper, employees who have been working for more than 20 years in the hotel should be presented gold medals each weighing more than a kg. Prabin Acharya, Deputy Managing Director at the hotel said, “It is natural to demands an increase in remuneration and compensation but a demand like this was unheard of earlier.” The hotel has resumed its operation.</span> <br />
	</span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Similarly, workers at Thai Airways Nepal office have presented an ultimatum with various absurd demands like paying their income taxes by the airline. Such activities have become a threat to the need of the day – increase investment that will have forward linkages to employment and overall national economic growth. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa14" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Legalities of Strikes </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Although Nepal too has a legal procedure to a strike, there are very few cases of complying with these procedures before a strike is held. Thapaliya said that most of the strikes are organised without following the legal procedure. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">However, the trade union leaders deny this charge. Rimal says that the legal procedure of strikes is not violated. “Labour laws are not violated in recent years. However, if employers and employees both are found defying the law, they should be brought under the book.” </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Shalikram Jamakattel, President of ANTUF says, “Strikes which are not in accordance with the law make workers’ case weak. Therefore, they go for the strikes according to the law unless there is a compulsion.’ </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">According to Thapaliya, the due process requires prior information about the strike. If the management does not settle the issues, then it is taken to the labour office, where both parties – the workers and the management - sit for dialogues. “If the dialogues do not resolve the issue, the workers should give a 30 days ultimatum. If the management does not resolve the issue even by the end of such 30 days, the workers can go for strike,” he adds. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa14" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Collective Bargaining </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Collective bargaining in Nepal is commonly focused on demanding additional facilities, mostly wages and other fringe benefits that often includes strange demands like that in the cases of Thai Airways and Greenwich Hotel. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">It is quite natural to adopt unique bargaining standpoints by the workers according to different types of companies. However, at times, workers are alleged to have come up with insatiable demands that can be hardly fulfilled by the employers. Thapaliya said that workers are often overambitious and their demands revolve around the political ideologies to which the union is affiliated, rather than relating to the overall benefits for workers. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">However, Rimal explains this differently. “I think the approach that we follow for collective bargaining is correct. We conduct collective bargaining at the central level for minimum standards like wage determination and finalise it there. Collective bargaining for maximum standards is done at the enterprise level and we think such standards should be different in different enterprises. Multinational companies have high paying capacity so we demand more from them whereas we demand less from companies that have less income and profits.” Jamakattel complains that collective bargaining is not conducted as promised in the policies. “Labours in industrial sector do collective bargaining every two years but it has not been managed systematically. Unless new labour law is made, these problems cannot be managed.” </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Agrawal on the other hand complains that there has not been effective collective bargaining as it is affected by the overruling political ideologies of trade unions they are affiliated to. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa14" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Employment Security </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Trade union leaders also complain that many employers do not provide appointment letters. Dahal says, “The law guarantees a system of providing appointment letter to employees as soon as they join a company. But there are many employees who have not received their appointment letters. Thapaliya too has the same comment to make. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Labour law also states that an employee who has completed 240 working days should automatically become a permanent employee. However, there is a system of provisional period as well. If the employer finds the performance of an employee unsatisfactory, the employer has the right to terminate the service of such employee at any time during the probation period. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">A minimum wage is fixed at Rs 6,200 per month. But many employees arereceiving less than this, complains Dahal. Therefore, he claims, more than fifty per cent of the labour strikes have been aimed to implement such provisions of the labour laws. Labour law also requires that the salary should be revised every two years. Also, this provision is neglected by employers, adds Dahal. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Out of nearly half a million youths that enter the Nepali employment market every year, around 305,000 are going abroad for jobs. According to the Central Bureau of Statistics, there are around 11.7 million people in the workforce and only 1.8 million of them are in the formal sector jobs within the country while about 3.5 million are employed abroad. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp; <br />
	</span></p>
<p class="Pa14" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Act Amendment </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Both employers’ organisations and trade unions have been demanding amendment in the Labour Act. Both believe that to maintain cordial industrial relations, the Act urgently needs amendments.. Still, the leaders of these trade unions claim that half of the existing disputes could be resolved with the existing laws if executed properly. However, Rimal) is hopeful that the proposed amendment to the Act will address the issues of daily-wage workers and those working in the informal sector. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">And it has been around 10 years since the government begun planning to amend the labour laws. Both employer’s organisations and trade unions want the law amended. However, their respective demands are different and some of them even conflicting. Employers are demanding the inclusion of provisions like ‘No Work No Pay’ and ‘Hire and Fire’ while trade unions are demanding setting minimum wage also for informal sector. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">But there are other issues as well to be incorporated in the labour law. Thapaliya says, one such provision needed is for a tripartite commission to resolve issues that could not be addressed through collective bargaining. He suggested that the informal sector too should have rules and regulations that address issues of manual labours like minimum wages, contract system, working hours and provision of social security. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa14" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Merger of Unions </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Another labour sector issue being intensely discussed these days is the merger of trade unions. During a recent function organised by GEFONT, Sharan KC, Regional Coordinator for South Asia at Trade Union Solidarity Centre of Finland (SASK) said that Nepali trade unions should merge with each other so that they become stronger and influential. He also shared examples of merger of unions in the international arena. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Employers too are positive about this proposal. Agrawal believes, “The presence of more than two trade unions within an enterprise has been creating a very difficult working atmosphere. It divides the workers into different ideologies.” He added, “There should be only one trade union for one enterprise.” </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">FNCCI is planning to form an Industrial Relations Forum involving all the presidents of major Trade Unions, industrialists and President of FNCCI. He informed, “It will be a platform to discuss the emerging issues of labour and industrial relationships. The forum will work towards safeguarding the rights of both employers and employees.” </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp; <br />
	</span></p>
<p class="Pa14" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">State’s Role </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;<span style="line-height: 115%; color: rgb(34, 30, 31);">Both the employers and employees are found unanimous on the state’s role for resolving the problems in industrial relations. As the government has a major responsibility to protect the investments in the country, it becomes the state’s responsibility to protect investors, when needed, from unlawful activities carried out by trade unions as well. Agrawal cites an example of Maruti Suzuki in India where the state came forward to provide such protection. During the recent labour strike there, the management team was beaten up by the labourers, and the Indian police deployed 500 rapid action forces. “This shows the level of concern the government has shown towards the investors. This action showed that Indian government will not tolerate repetition of such activities.. If Indian government can do it, the Nepali government too can do it,” he says. He said, “Sense of insecurity is the major problem that the investors are facing now due to the inability of the government to take actions when trade unions behave illegally.”</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;</span></span></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span class="A37"><span style="line-height: 115%; font-family: ">Upper Karnali Project</span></span></span></strong></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A37"><span style="line-height: 115%; font-family: ">&nbsp;<img alt="upper karnali" border="1" height="85" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/upperkarnali.jpg" vspace="10" width="144" /></span></span></span></p>
<p class="Pa7" style="text-align:justify">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Energy Limited, GMR Infrastructure Limited (GIL) and Italian-Thai Development Project Company had signed a Memorandum of Understanding (MoU) with the Government of Nepal, for development of 900 MW Upper Karnali Hydro electric Project. The project was set to develop under a Build, Own, Operate and Transfer (BOOT) basis. The plant was targeted to be commissioned by the end of 2016. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">The attack on Indian infrastructure and energy major GMR’s power project in western Nepal by Maoists delayed the 900 MW hydropower project to meet its 2016 completion date. The nearly $469 million project’s environmental impact assessment was on the verge of completion when the attack occurred. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Upper Karnali Hydropower Project’s camp site in Dailekh district was burnt down. The act of arson and vandalism destroyed all the three pre-fabricated buildings in Dailekh, including the GMR site office with its computers and documents. The fear of further attacks and the pulling out of all personnel was said to have caused the delay to go up further, causing an escalation in costs as well. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Soon after the attack, the second in two months, GMR’s director G Subba Rao and Harvinder Manocha, GMR Energy’s associate vice-president as well as country director for Nepal, held talks with Nepal’s erstwhile Energy Minister Gokarna Bista and all lawmakers from the three districts spanned by the project - Dailekh, Accham and Surkhet. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Besides Dailekh, Accham and Surkhet, GMR’s projects in Nepal, including the 600 MW Upper Marsyangdi, have been regularly threatened by the Maoists with their top leaders demanding that their licenses be scrapped. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">The Independent Power Producers’ Association of Nepal warned the government in a press statement that such attacks would demolish investors’ confidence in Nepal. Facing an 18-20 hour daily power cut during the dry winter and summer seasons, Nepal has been banking on the Upper Karnali project to ease the power crisis within the next five years. GMR Group is a Bangalore headquartered global infrastructure major with interests in Airports, Energy, Highways and Urban infrastructure.</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;</span></span></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span class="A37"><span style="line-height: 115%; font-family: ">Surya Nepal Textile</span></span></span></strong></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A37"><span style="line-height: 115%; font-family: ">&nbsp;<img alt="surya nepal" border="1" height="91" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/suryanepal.jpg" vspace="10" width="160" /></span></span></span></p>
<p class="Pa7" style="text-align:justify">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Established in 2004 with an investment of approximately Rs 700 million, Surya Nepal Private Limited’s garment manufacturing unit - Surya Textile Industry - had been providing jobs to 608 workers directly, while the number of workers indirectly related to textile industry was more than 1,000. </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Remunerations demanded by workers for the eight days strike that took place in mid-April 2011 and the management’s refusal to provide any remuneration, under the “no work no pay” provision, in the long run turned out to be the main reason for the permanent closure of Surya Textile. Workers didn’t agree with the “no work no pay” pact arguing that they were present inside the industry’s premises during the strike but could not work, because the industry itself was closed. This way, arguments and counter arguments continued and it deepened the conflict between management and labourers. On June 14, the situation worsened when factory workers, under backing from major trade unions, locked up 42 officials of the management without food and water supply for more than 24 hours. Finally, police had to rescue the captivated officials forcefully, because the major trade unions wanted their demand to be fulfilled immediately, or else they were not ready to release the officials. During the rescue clash, 8 labourers and 12 policemen were injured. After the officials were rescued, the management announced an indefinite closure of the industry effective from June 15 itself. </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;<span style="line-height: 115%; color: rgb(34, 30, 31);">Since June 15 to August 17, the industry remained closed during which labourers and even the trade unions demonstrated to re-open the industry but the management continuously refused to re-open citing unfriendly industrial climate and security problems. Finally, an agreement was reached among representatives of Morang Industry Organisation, Trade Unions and Surya Nepal to shut down the industry permanently paying Rs 29,800 as lay-off benefits to each worker and also according to agreement, the laid-off workers will be given priority as per the workers’ efficiency and capacity if the company comes up with new venture or resume its factory again. The security problems, militant trade unionism and their irrational demands, according to the management, forced the company to permanently close the textile industry. Irrespective of many other cases where monthly wage is the main cause of rift between management and labourers, Surya Textile was an exception. Sanjiv Keshava, Surya Nepal’s Managing Director, claimed themselves as good paymaster and explained that they paid almost double the amount stated in the minimum wage.</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;</span></span></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span class="A37"><span style="line-height: 115%; font-family: ">KFC and Pizza Hut</span></span></span></strong></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A37"><span style="line-height: 115%; font-family: ">&nbsp;<img alt="kfc and pizza hut" border="1" height="82" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/KFC.jpg" vspace="10" width="144" /></span></span></span></p>
<p class="Pa7" style="text-align:justify">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Outlets of international fast food chains KFC, Pizza Hut and Cream Bell resumed operation on September 17, 2012 after a three point agreement between the workers and the management. KFC, the biggest fast food chain in Nepal, had remained closed for over a month. On August 14, 2012 Devyani International, a subsidiary of Varun Beverages which operates outlets of KFC and Pizza Hut in Nepal had written a letter to authorities with announcement of immediate closure of all the four KFC and Pizza Hut restaurants running in the capital. “In order to disrupt our operations, some staff have physically attacked and threatened to kill the senior managers,” the letter read. </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">The settlement of dispute took nearly a month’s time because the management was seeking action against those law breakers who threatened to kill the managers. Moreover, it was demanding a commitment from the workers on not repeating such violent behaviour again. The management of the company decided to reopen the outlets after taking action against 22 staff who manhandled a senior manager of the company. Yogendra Kumal, Joint Coordinator of All Nepal Trade Union Federation (Revolutionary); Tika Subedi, Vice President of ANHWU-R; Nawaraj Bhatta, President of ANHRWU-R´s Devyani International Nepal unit and Vishnu Reddy, Country Manager of Devyani International, signed the pact. As per the agreement, the trade union will make all the staff obey rules and regulations of the company and will not object if the management takes action on those violating the company´s rules. Likewise, the management agreed to respect the trade union rights. On August 29, the workers registered ANHRWU (All Nepal Hotel and Restaurant Workers Union-Revolutionary). </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;<span style="line-height: 115%; color: rgb(34, 30, 31);">The fast food chain had been talk of the town since there was a dispute over the formation of a trade union. According to the sources, the management and its employees started crossing swords with each other in August after cadres of the Mohan Baidya led CPN-Maoist goaded the staff into forming the party’s trade union. The five outlets used to record average daily turnover of Rs 800,000. According to the senior managerial staff at KFC Durbarmarg, the company suffered a loss of around Rs 30 million including loss of perishable goods.</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp; <br />
	</span></span></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span class="A38"><span style="line-height: 115%; font-family: ">‘Activities of Trade Unions and Employers are Guided by Traditional Mentality’</span></span></span></strong></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span class="A38"><span style="line-height: 115%; font-family: ">&nbsp;<img alt="agni parajuli" border="1" height="292" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/agni.jpg" vspace="10" width="253" /></span></span></span></strong></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A0">AGNI PRASAD THAPALIYA<br />
	Judge <br />
	<span style="line-height: 115%; font-family: ">Labour Court</span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A0"><span style="line-height: 115%; font-family: ">&nbsp;</span><b style="mso-bidi-font-weight:normal"><span style="line-height: 115%; font-family: "> <br />
	</span></b></span></span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">How do you view the current labour situation as a judge of Labour Court? </span></b></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Labour court gives its verdict on a legal basis on the disputes whatsoever comes to the court. The labour statutes have envisioned secured employment, secured employees and guarantee of social security. Looking at these, it seems that our law is labour oriented to some extent because it has made provision of secured work for workers. But in practice, workers are forced to work for a company for a long time without an appointment letter. In many cases, they don’t even have attendance files and they are not even given identity cards. To file a case in the court, one must be able to produce evidences. There must be some evidences like employment letter, identity card, payslip or attendance registers. In some case, none of these are existent. There are cases where people are put to work like bonded labours. Companies must formally employ its workers with proper documentation that clearly mentions post, type of work, job description and remuneration, according to the legal provision. There are cases where employers have not followed these rules. Based on available documents and evidences, we have made verdicts in the favour of employees. In some cases, we have not been able to reinstate the workers. Similarly, to employ foreigners in Nepal, having a work permit from the Department of Labour is a must when the company has to hire foreigners. But a research I have conducted shows that around 20 per cent employees are working without permit in the bordering areas. Similarly, around 48 per cent employees are put to work sans contract papers. There is also disparity on salary of males and females. There are also cases of sexual harassments at work. In the absence of provision to address sexual harassment in our labour law, decision made by the management of a company has been endorsed also by the court and in some cases; international law is also put into practice. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;<b style="mso-bidi-font-weight:normal"> <br />
	</b></span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">What is the annual number of cases that are filed in the labour court? </span></b></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Most of the cases reinstated in labour court are about unlawful dismissal of employees. In many cases, the misconduct is not established while in some cases there are shortcomings in the job done by the workers. There are situations when the workers have to be reinstated if misconduct is not proved or employees are not allowed an opportunity of clarification. There were 103 verdicts made last year through the labour court and 84 cases were appealed against the actions of proprietors or against decisions of Labour Offices. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;">&nbsp;<b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">It seems that labour unions are guided by political ideologies rather than for the benefits of workers. How do you view this?</span></b></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">&nbsp;Politics has also made inroads into civil service and police while it was common in the private sector. But, this is sad. It is said that a manager accuses member of another trade union with the help of one union. Such practices do not benefit the private sector. Activities of trade unions and employers show that they are guided by a traditional mentality though the overall national political and economic situation has changed with time. Employers have not got rid of their bossy nature. Although the law mentions a proper procedure to hire employees, the regulation is not properly followed. But employers or proprietors have not followed the legal procedures, so, there is the problem. Similarly, workers too are overambitious. Due to political reason, and over ambition of workers, without understanding the financial condition of the industries and even the economy, workers always want to be benefitted and enjoy attractive facilities. World history shows extreme cases of exploitation of labour and industrialists too suffered a lot but we don’t have such a situation. Our situation is definitely better. Our law addresses almost every issue of the formal sector. Both the parties have their own standpoint, so, the private sector and investment is in dire straits. This has increased the chances of capital flight. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;">&nbsp;<b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">What is the process of collective bargaining? How much have Nepali trade unions complied with the legal provision? </span></b></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Collective bargaining does not come under jurisdiction of the court. Agreements made based on collective bargaining are implemented equivalent to law. Though agreements made are implemented, in most of the cases the major problem is, agreements cannot be made. To resolve such issues, a dispute resolution body needs to be formed. As we are under the tripartite model recognised by the ILO, the personal disputes are resolved by the court while collective disputes are not solved through negotiation between employees and proprietor in the presence of Labour Office. After that, a mediator may be appointed through the consent of both parties who can settle dispute through mediation. In case the mediator fails to settle the issue, employees can file ultimatum to go on a strike. On the other hand, employers can lockup his/her business in case s/he has been unsatisfied by the complaint of employees. So, our labour law does not address effective mechanism for resolving collective issue. It is a lacuna in our law. In the absence of an authentic body to settle collective issues, the private sector is not moving ahead as it should have. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">What are the legalities of industrial strikes? Do you see those legalities followed by unions as well as companies? </span></b></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">The process of strike has not been followed at all. A negligible number of strikes are organised following the legal procedure. Most of them are organised all of a sudden. The process involves prior information about the strike. If the management does not settle the issues, then the issue is taken to the labour office where they can sit for dialogues. Even if the dialogues do not resolve the issue, a mediator can be appointed by the consent of both parties. In case, the mediator fails to settle issues or there is no understanding on appointing a mediator, labourers can go for strike but again a 30 days ultimatum should be given. When the management body does not listen to the demand within the ultimatum, strikes can then be organised. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">It is said that judiciary has been making pro-labour decisions. What is your take on it? </span></b></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Labour issues are not criminal cases. An Indian pioneer on labour law, Gulzarilal Nanda said that if the labour cases are treated on the basis of whoever produces more evidences, you are not trying to give justice to the labourers. Likewise, if a convict gets the benefit of doubt and the judge maintains silence or acts like an umpire to see which party will produce more evidences, then the justice is denied. So, a labour court judge must find out the facts and evidences. The employer always looks to employ workers at minimum facilities and make higher profit. So, the labour law procedure is quite different in nature. In the labour court, a judge must be active enough to guarantee justice. Investors feel that they must have absolute power over employees to protect their investments. In cases against employers that do not fulfil the legal procedure, justice is given in favour of labourers rather than of the employers. In numerous cases it is found that workers are alleged of wrongdoings when actually they have not committed mistakes. Even if they have committed misconduct; they are not given a chance for clarification. In such cases, decisions made by managers are reverted by the court. Therefore, when employees win the case, the industrialists say that verdicts are being labour oriented but it is not true. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp; <br />
	</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">A voice for amendment of labour law is being raised. Do you think the amendment is really needed? </span></b></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Compared to the law of other countries, one thing that needs to be incorporated into the labour law is – making a provision of a tripartite committee or commission to sort out issues that are not resolved through the collective bargaining procedure. The law must mention a certain mechanism to resolve the collective disputes. In least developed countries like Nepal, there is presence of a strong informal sector. A huge number of employed people in these sectors are in the form of manual labours like agricultural workers and household workers. The workers are still working like bonded labours. Therefore the informal sector too should have certain rules and regulations. So, there should be a regulation that addresses their minimum wages, contract system, working hours and provision of social security. As we have moved into a democratic system and become the part of the network of the UN, we have to timely and properly address these issues and control inhuman activities too. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">It is alleged that feeling of insecurity prevails in the labour court. To what extent is it true? </span></b></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;<span style="line-height: 115%; color: rgb(34, 30, 31);">In my tenure of three years, I have not felt any kind of insecurity as of now. Apart from minor arguments from labourers, there is no interference and threat seen till this day. But as the overall judiciary is said to be insecure at the national level being the part of the overall broad framework of the judiciary, labour court is also insecure from that perspective. As an individual entity, there are no such issues in the labour court.</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;</span></span></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span class="A38"><span style="line-height: 115%; font-family: ">‘Trade Unions Contributed only Six Per cent of the Total Strikes’</span></span></span></strong></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span class="A38"><span style="line-height: 115%; font-family: ">&nbsp;<img alt="bishnu" border="1" height="398" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/bishnu.jpg" vspace="10" width="346" /></span></span></span></strong></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A0">BISHNU RIMAL <br />
	President <br />
	<span style="line-height: 115%; font-family: ">GEFONT</span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A0"><b style="mso-bidi-font-weight:normal"><span style="line-height: 115%; font-family: ">&nbsp;</span></b></span></span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">How many members are there in your union and how do you manage them? </span></b></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">There are more than 353,000 individual members in our union and 29 affiliates altogether. The affiliates recruit members on their own under our co-ordination and connect them with us but we do not subscribe direct membership. We have committees at the local and district levels. And at the entrepreneur level, they choose one male and female candidate each as our representatives. The committee of the registered union becomes our member in a national level. The affiliates are action oriented while the role of GEFONT is that of coordination. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">Why are industrial strikes so recurrent in Nepal? </span></b></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Strikes were frequent between 2006 and 2008 but after 2008, the frequency of industrial strikes has gone down. If you follow the website www.nepalbanda.com, you will find that trade unions have contributed only six percent of the total bandhas in the last year while around 28 percent bandhas were called by employers and the rest was contributed by parties and other organizations. If you are confusing political strikes with trade unions’ strikes, it is a mistake. If counted, there are hardly three companies where unions called strikes namely Surya Nepal, Pizza Hut and Unilever up to now. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">Do you think the trade unions in Nepal are following the right approach in collective bargaining? </span></b></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Since we do not call it collective bargaining across the board, I think the approach that we follow for collective bargaining is proper. We conduct bargaining at the central level committee for minimum standards like wage determination and finalize it there. Collective bargaining is for maximum standards and we do it according to the type of company in question. Multinational companies have high paying capacity so we demand more whereas we demand less from the less earning companies. Before getting into bargaining process, it is essential to find whether the company is in profit or not. There was a huge bargaining at local level when the Khimti Project was firing 89 workers. According to the law, it had to pay two per cent of the total earnings to the workers and the labors’ demand approach was correct. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">Due to the violent strikes and vandalism, private sector employers in Nepal fear to hire Nepali workers. How do you view this? </span></b></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Violent strikes are rare as far as I know. The strike against Surya Nepal is the only example that I can give for vandalism in the private sector. Apart from that, strikes are usually seen at the government service and public sector. Recently, there was a strike at Unilever in Hetauda for a week and the problem was solved immediately after the negotiations. If we go through case-by-case, we may find some cases that nurtured vandalism but in general, employees are not feared to hire Nepali workers. Moreover, I have heard that employees in Nepal are longing to hire Nepali workers but they are not finding any mainly because of the scarcity of the workers in Nepal. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;">&nbsp;<b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">What are the problems that the workers are facing in Nepali industries? </span></b></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Firstly, at the policy level, the main problem that we are facing is the ineffectiveness of the rule of law. Even the industrialists are not providing minimum wages to the workers while the minimum wage is Rs 6,200 only. Unless there is a labor inspection system, we cannot find out whether the rule of law has been followed or not. Our law says that after 240 days of working, a worker is permanent at the company but there are many outsourced labors working for years and the jobs are mostly informal. Secondly, the problem of meager pay has been on the rise. High productivity of the workers can be seen only if they are paid adequately. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Besides, there is no social security in the companies. In any developed country, workers get pension after 20 years of service in a company but this social protection is rare in Nepali companies. More than Rs 200 million has been collected since the government has put one per cent tax on the companies for the social security of the workers. Accident insurance and medical insurance should be implemented but there are no schemes yet. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">The employers here fear that if the workers are made permanent, there will be less productivity. They believe that the workers are more productive when they work in fear. If there were no problems in permanent and temporary jobs, there wouldn’t be strikes in most of the industries. Workers are often agitated because there is low salary, no job guarantee and no social protection. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">Experts are saying that over unionization of labors has affected industries badly. What are your views on it? </span></b></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Conflict results from the sour relationship between management and workers, not from unionization. It is true that there are more unions in in service sector companies while some companies that provide informal job opportunities do not have unions at all. Unions are not the problems in companies because they solve most problems of the employers. A union solves the problems of each and every worker in the company and in most organizations, union leaders maintain labor relations with the management. The number of the unions is not a problem for an employee or the employer as long as authenticity of the union or the members of the bargaining team selected by the workers themselves is maintained. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">Intra-party/intra-union problems and power struggle are common among Nepali trade unions. You as the President of GEFONT may have realized that as well. What do you think could be the solution? </span></b></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Historically, there has always been a relation between Nepali political parties and trade unions. But it should be noted that Nepali trade unions are formed according to the law. Whether there is one or more than 20 unions in an organization, the employees should acknowledge that there should be a national election for an authentic union. For example, if there are four unions in an organization, the bargaining panel will be formed according to the votes in the election regardless of who the ruler of the union is. It’s only then that the multiplicity of the unions can be managed easily. Problems occur from the employers’ side too because their behavior changes according to the relationship with the union. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">As the trade unions in Nepal are affiliated to one or the other political party, they seem busy in politics than in promoting workers’ interests. How can this be resolved? </span></b></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Unions alone are not affiliated to political parties, employers too are affiliated and involved with the parties. In a multi-party system, affiliation to political parties is common and ideologically, it is correct too. </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">From the perspective of the laborers, we are purely representing the laborers inside the companies. We are not indulging in any politics, however, our people are affiliated with different political parties. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">Labor disputes and shutdown of the industries are perceived as a threat to the investors venturing into new businesses in Nepal. How is your union going about it? </span></b></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Had you gone through the document called ‘Doing Business’, you would find that the labor disputes are in the sixth number among other problems. Companies making high investments in Sunsari- Biratnagar corridor are demanding more labors. The report by World Bank has also put labor problems in seventh among others whereas the number one problem is government’s legal hassles and number two is the problem of taxation. No investor has withdrawn his investment because of the unions or the workers. Recently, we organized the third Labor and Employment Conference in Kathmandu where we jointly made a 15-points declaration regarding the welfare of the workers. We We shared that we do not have anything against the employers; rather, we had a common view that we lacked a proper government bureaucracy. Unions are often dragged between the ineffective government and the political parties which is not right. Investors say labour law is not good in Nepal but they have never blamed workers or the unions for being unfriendly towards investments. <br />
	</span></span></p>
<p>
	<br />
	<br />
	<br />
	<br />
	<br />
	<br />
	<br />
	According to the Central Bureau of Statistics, the country has about 11.7 million workforce and only 1.8 million are in the formal sector and around 3.5 million are in foreign jobs. Rest of them are either unemployed or in informal sector. What do you think should be done to attract more investments that help in reducing labor',
			'published' => true,
			'created' => '2012-10-30',
			'modified' => '2012-12-06',
			'keywords' => '',
			'description' => 'On the eve of celebrating Nepal Investment year 2012/13, over unionisation of labour has continued alarming foreign investors and discouraging local investors to venture into new industries. Multiple unions affiliated to more than one political party exist within a company. Such politicisations of labour unions have resulted in inter union and employee-employers rifts that significantly reduce productivity along with losses of working hours.',
			'sortorder' => '613',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 10 => array(
		'Article' => array(
			'id' => '704',
			'article_category_id' => '40',
			'title' => 'Remittance  : Reducing Poverty',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
<!--[if gte mso 9]><xml>
 <w:WordDocument>
  <w:View>Normal</w:View>
  <w:Zoom>0</w:Zoom>
  <w:TrackMoves/>
  <w:TrackFormatting/>
  <w:PunctuationKerning/>
  <w:ValidateAgainstSchemas/>
  <w:SaveIfXMLInvalid>false</w:SaveIfXMLInvalid>
  <w:IgnoreMixedContent>false</w:IgnoreMixedContent>
  <w:AlwaysShowPlaceholderText>false</w:AlwaysShowPlaceholderText>
  <w:DoNotPromoteQF/>
  <w:LidThemeOther>EN-US</w:LidThemeOther>
  <w:LidThemeAsian>X-NONE</w:LidThemeAsian>
  <w:LidThemeComplexScript>X-NONE</w:LidThemeComplexScript>
  <w:Compatibility>
   <w:BreakWrappedTables/>
   <w:SnapToGridInCell/>
   <w:WrapTextWithPunct/>
   <w:UseAsianBreakRules/>
   <w:DontGrowAutofit/>
   <w:SplitPgBreakAndParaMark/>
   <w:DontVertAlignCellWithSp/>
   <w:DontBreakConstrainedForcedTables/>
   <w:DontVertAlignInTxbx/>
   <w:Word11KerningPairs/>
   <w:CachedColBalance/>
  </w:Compatibility>
  <w:BrowserLevel>MicrosoftInternetExplorer4</w:BrowserLevel>
  <m:mathPr>
   <m:mathFont m:val="Cambria Math"/>
   <m:brkBin m:val="before"/>
   <m:brkBinSub m:val="--"/>
   <m:smallFrac m:val="off"/>
   <m:dispDef/>
   <m:lMargin m:val="0"/>
   <m:rMargin m:val="0"/>
   <m:defJc m:val="centerGroup"/>
   <m:wrapIndent m:val="1440"/>
   <m:intLim m:val="subSup"/>
   <m:naryLim m:val="undOvr"/>
  </m:mathPr></w:WordDocument>
</xml><![endif]--></p>
<p>
<!--[if gte mso 9]><xml>
 <w:LatentStyles DefLockedState="false" DefUnhideWhenUsed="true"
  DefSemiHidden="true" DefQFormat="false" DefPriority="99"
  LatentStyleCount="267">
  <w:LsdException Locked="false" Priority="0" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Normal"/>
  <w:LsdException Locked="false" Priority="9" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="heading 1"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 2"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 3"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 4"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 5"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 6"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 7"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 8"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 9"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 1"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 2"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 3"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 4"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 5"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 6"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 7"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 8"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 9"/>
  <w:LsdException Locked="false" Priority="35" QFormat="true" Name="caption"/>
  <w:LsdException Locked="false" Priority="10" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Title"/>
  <w:LsdException Locked="false" Priority="1" Name="Default Paragraph Font"/>
  <w:LsdException Locked="false" Priority="11" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Subtitle"/>
  <w:LsdException Locked="false" Priority="22" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Strong"/>
  <w:LsdException Locked="false" Priority="20" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Emphasis"/>
  <w:LsdException Locked="false" Priority="59" SemiHidden="false"
   UnhideWhenUsed="false" Name="Table Grid"/>
  <w:LsdException Locked="false" UnhideWhenUsed="false" Name="Placeholder Text"/>
  <w:LsdException Locked="false" Priority="1" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="No Spacing"/>
  <w:LsdException Locked="false" Priority="60" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Shading"/>
  <w:LsdException Locked="false" Priority="61" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light List"/>
  <w:LsdException Locked="false" Priority="62" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Grid"/>
  <w:LsdException Locked="false" Priority="63" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 1"/>
  <w:LsdException Locked="false" Priority="64" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 2"/>
  <w:LsdException Locked="false" Priority="65" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 1"/>
  <w:LsdException Locked="false" Priority="66" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 2"/>
  <w:LsdException Locked="false" Priority="67" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 1"/>
  <w:LsdException Locked="false" Priority="68" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 2"/>
  <w:LsdException Locked="false" Priority="69" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 3"/>
  <w:LsdException Locked="false" Priority="70" SemiHidden="false"
   UnhideWhenUsed="false" Name="Dark List"/>
  <w:LsdException Locked="false" Priority="71" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Shading"/>
  <w:LsdException Locked="false" Priority="72" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful List"/>
  <w:LsdException Locked="false" Priority="73" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Grid"/>
  <w:LsdException Locked="false" Priority="60" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Shading Accent 1"/>
  <w:LsdException Locked="false" Priority="61" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light List Accent 1"/>
  <w:LsdException Locked="false" Priority="62" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Grid Accent 1"/>
  <w:LsdException Locked="false" Priority="63" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 1 Accent 1"/>
  <w:LsdException Locked="false" Priority="64" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 2 Accent 1"/>
  <w:LsdException Locked="false" Priority="65" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 1 Accent 1"/>
  <w:LsdException Locked="false" UnhideWhenUsed="false" Name="Revision"/>
  <w:LsdException Locked="false" Priority="34" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="List Paragraph"/>
  <w:LsdException Locked="false" Priority="29" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Quote"/>
  <w:LsdException Locked="false" Priority="30" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Intense Quote"/>
  <w:LsdException Locked="false" Priority="66" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 2 Accent 1"/>
  <w:LsdException Locked="false" Priority="67" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 1 Accent 1"/>
  <w:LsdException Locked="false" Priority="68" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 2 Accent 1"/>
  <w:LsdException Locked="false" Priority="69" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 3 Accent 1"/>
  <w:LsdException Locked="false" Priority="70" SemiHidden="false"
   UnhideWhenUsed="false" Name="Dark List Accent 1"/>
  <w:LsdException Locked="false" Priority="71" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Shading Accent 1"/>
  <w:LsdException Locked="false" Priority="72" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful List Accent 1"/>
  <w:LsdException Locked="false" Priority="73" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Grid Accent 1"/>
  <w:LsdException Locked="false" Priority="60" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Shading Accent 2"/>
  <w:LsdException Locked="false" Priority="61" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light List Accent 2"/>
  <w:LsdException Locked="false" Priority="62" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Grid Accent 2"/>
  <w:LsdException Locked="false" Priority="63" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 1 Accent 2"/>
  <w:LsdException Locked="false" Priority="64" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 2 Accent 2"/>
  <w:LsdException Locked="false" Priority="65" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 1 Accent 2"/>
  <w:LsdException Locked="false" Priority="66" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 2 Accent 2"/>
  <w:LsdException Locked="false" Priority="67" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 1 Accent 2"/>
  <w:LsdException Locked="false" Priority="68" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 2 Accent 2"/>
  <w:LsdException Locked="false" Priority="69" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 3 Accent 2"/>
  <w:LsdException Locked="false" Priority="70" SemiHidden="false"
   UnhideWhenUsed="false" Name="Dark List Accent 2"/>
  <w:LsdException Locked="false" Priority="71" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Shading Accent 2"/>
  <w:LsdException Locked="false" Priority="72" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful List Accent 2"/>
  <w:LsdException Locked="false" Priority="73" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Grid Accent 2"/>
  <w:LsdException Locked="false" Priority="60" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Shading Accent 3"/>
  <w:LsdException Locked="false" Priority="61" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light List Accent 3"/>
  <w:LsdException Locked="false" Priority="62" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Grid Accent 3"/>
  <w:LsdException Locked="false" Priority="63" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 1 Accent 3"/>
  <w:LsdException Locked="false" Priority="64" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 2 Accent 3"/>
  <w:LsdException Locked="false" Priority="65" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 1 Accent 3"/>
  <w:LsdException Locked="false" Priority="66" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 2 Accent 3"/>
  <w:LsdException Locked="false" Priority="67" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 1 Accent 3"/>
  <w:LsdException Locked="false" Priority="68" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 2 Accent 3"/>
  <w:LsdException Locked="false" Priority="69" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 3 Accent 3"/>
  <w:LsdException Locked="false" Priority="70" SemiHidden="false"
   UnhideWhenUsed="false" Name="Dark List Accent 3"/>
  <w:LsdException Locked="false" Priority="71" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Shading Accent 3"/>
  <w:LsdException Locked="false" Priority="72" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful List Accent 3"/>
  <w:LsdException Locked="false" Priority="73" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Grid Accent 3"/>
  <w:LsdException Locked="false" Priority="60" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Shading Accent 4"/>
  <w:LsdException Locked="false" Priority="61" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light List Accent 4"/>
  <w:LsdException Locked="false" Priority="62" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Grid Accent 4"/>
  <w:LsdException Locked="false" Priority="63" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 1 Accent 4"/>
  <w:LsdException Locked="false" Priority="64" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 2 Accent 4"/>
  <w:LsdException Locked="false" Priority="65" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 1 Accent 4"/>
  <w:LsdException Locked="false" Priority="66" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 2 Accent 4"/>
  <w:LsdException Locked="false" Priority="67" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 1 Accent 4"/>
  <w:LsdException Locked="false" Priority="68" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 2 Accent 4"/>
  <w:LsdException Locked="false" Priority="69" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 3 Accent 4"/>
  <w:LsdException Locked="false" Priority="70" SemiHidden="false"
   UnhideWhenUsed="false" Name="Dark List Accent 4"/>
  <w:LsdException Locked="false" Priority="71" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Shading Accent 4"/>
  <w:LsdException Locked="false" Priority="72" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful List Accent 4"/>
  <w:LsdException Locked="false" Priority="73" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Grid Accent 4"/>
  <w:LsdException Locked="false" Priority="60" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Shading Accent 5"/>
  <w:LsdException Locked="false" Priority="61" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light List Accent 5"/>
  <w:LsdException Locked="false" Priority="62" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Grid Accent 5"/>
  <w:LsdException Locked="false" Priority="63" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 1 Accent 5"/>
  <w:LsdException Locked="false" Priority="64" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 2 Accent 5"/>
  <w:LsdException Locked="false" Priority="65" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 1 Accent 5"/>
  <w:LsdException Locked="false" Priority="66" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 2 Accent 5"/>
  <w:LsdException Locked="false" Priority="67" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 1 Accent 5"/>
  <w:LsdException Locked="false" Priority="68" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 2 Accent 5"/>
  <w:LsdException Locked="false" Priority="69" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 3 Accent 5"/>
  <w:LsdException Locked="false" Priority="70" SemiHidden="false"
   UnhideWhenUsed="false" Name="Dark List Accent 5"/>
  <w:LsdException Locked="false" Priority="71" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Shading Accent 5"/>
  <w:LsdException Locked="false" Priority="72" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful List Accent 5"/>
  <w:LsdException Locked="false" Priority="73" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Grid Accent 5"/>
  <w:LsdException Locked="false" Priority="60" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Shading Accent 6"/>
  <w:LsdException Locked="false" Priority="61" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light List Accent 6"/>
  <w:LsdException Locked="false" Priority="62" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Grid Accent 6"/>
  <w:LsdException Locked="false" Priority="63" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 1 Accent 6"/>
  <w:LsdException Locked="false" Priority="64" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 2 Accent 6"/>
  <w:LsdException Locked="false" Priority="65" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 1 Accent 6"/>
  <w:LsdException Locked="false" Priority="66" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 2 Accent 6"/>
  <w:LsdException Locked="false" Priority="67" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 1 Accent 6"/>
  <w:LsdException Locked="false" Priority="68" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 2 Accent 6"/>
  <w:LsdException Locked="false" Priority="69" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 3 Accent 6"/>
  <w:LsdException Locked="false" Priority="70" SemiHidden="false"
   UnhideWhenUsed="false" Name="Dark List Accent 6"/>
  <w:LsdException Locked="false" Priority="71" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Shading Accent 6"/>
  <w:LsdException Locked="false" Priority="72" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful List Accent 6"/>
  <w:LsdException Locked="false" Priority="73" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Grid Accent 6"/>
  <w:LsdException Locked="false" Priority="19" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Subtle Emphasis"/>
  <w:LsdException Locked="false" Priority="21" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Intense Emphasis"/>
  <w:LsdException Locked="false" Priority="31" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Subtle Reference"/>
  <w:LsdException Locked="false" Priority="32" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Intense Reference"/>
  <w:LsdException Locked="false" Priority="33" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Book Title"/>
  <w:LsdException Locked="false" Priority="37" Name="Bibliography"/>
  <w:LsdException Locked="false" Priority="39" QFormat="true" Name="TOC Heading"/>
 </w:LatentStyles>
</xml><![endif]--><!--[if gte mso 10]>
<style>
 /* Style Definitions */
 table.MsoNormalTable
	{mso-style-name:"Table Normal";
	mso-tstyle-rowband-size:0;
	mso-tstyle-colband-size:0;
	mso-style-noshow:yes;
	mso-style-priority:99;
	mso-style-qformat:yes;
	mso-style-parent:"";
	mso-padding-alt:0in 5.4pt 0in 5.4pt;
	mso-para-margin-top:0in;
	mso-para-margin-right:0in;
	mso-para-margin-bottom:10.0pt;
	mso-para-margin-left:0in;
	line-height:115%;
	mso-pagination:widow-orphan;
	font-size:11.0pt;
	font-family:"Calibri","sans-serif";
	mso-ascii-font-family:Calibri;
	mso-ascii-theme-font:minor-latin;
	mso-hansi-font-family:Calibri;
	mso-hansi-theme-font:minor-latin;
	mso-bidi-font-family:"Times New Roman";
	mso-bidi-theme-font:minor-bidi;}
</style>
<![endif]--></p>
<p class="MsoNormal">
	<span style="font-size:16px;"><span style="line-height: 115%;"><img alt="remit" border="1" height="284" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/remittance.jpg" vspace="10" width="449" /><br />
	<br />
	<br />
	Income received as the Nepali workers’ remittances working abroad has become an automatic instrument for poverty reduction in Nepal. Remittance has been recognised as a key to solve various economic ills afflicting the country. Moreover, it has raised some obvious questions. For instance, long the national economy can solely depend on the source of remittance to sustain itself? Is it possible to use the remitted money to improve social livelihood of the Nepali people or, can it be used in more productive sector? Can our policymakers think beyond the box of remittance economy?</span></span></p>
<p class="MsoNormal">
	<span style="font-size:16px;"><span style="line-height: 115%;">&nbsp;</span></span></p>
<p class="MsoNormal">
	<span style="font-size:10.0pt;line-height:115%">55 New Business Age | September 2012</span></p>
<p class="MsoNormal">
	<span style="font-size:10.0pt;line-height:115%">&nbsp;<br />
	<br />
	<img alt="coverstory" border="1" height="339" hspace="5" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/coverstory_1.jpg" vspace="5" width="300" /><br />
	</span></p>
<p class="MsoNormal">
	<span class="A8"><span myriad="" style="font-size:24.0pt;line-height:
115%;font-family:">COVER STORY</span></span></p>
<p class="Pa9" style="text-align:justify">
	<span class="A13"><span style="font-size:
59.0pt;color:windowtext">T</span></span><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">he total households receiving remittances in Nepal stood at 55.8 per cent in the year 2010-11 as revealed by the findings of Nepal Living Standards Survey (NLSS)- III released by the Central Bureau of Statistics (CBS). This is a sharp rise from the year 2003-04 when only 31.9 per cent households in Nepal received remittances. Another remarkable statistic in the report was the 18 per cent decline in absolute poverty in the six years between 2003-04 and 2009- 10. According to the report, only 13 per cent Nepalis now remain below the absolute poverty line (the benchmark being 2,200-calorie intake per day per person). Nepal ranks sixth among the countries in terms of Remittances-to- GDP ratio as stated in the World Bank Report-2011. It rose from Rs 47.5 billion in 2001-02 to Rs 231.73 billion in 2009- 10. Remittances-to-GDP ratio almost doubled from 10.3 per cent in 2001-02 to 19.6 per cent in 2009-10. Economists estimate that this figure will rise to 20 per cent in 2012-2014. <br />
	</span></p>
<p class="Pa10" style="text-align:justify">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">It is estimated that approximately 2.2 million Nepalis are working as migrant workers in various countries. Nearly 90 per cent of migrant workers have found employment in Qatar, Malaysia, Saudi Arabia, the UAE, and Kuwait. Among them, 10 per cent of migrant labors are female. According to Bal Bahadur Tamang, the President of Foreign Employment Association of Nepal, the growing construction business in the Gulf countries has created a demand for large number of Nepali workers. “Qatar is hosting a showpiece World Cup Football tournament in 2022 and therefore, the amount of construction work happening there has increased the demand of Nepali workers substantially,” informed Tamang. <br />
	<br />
	Increasing remittance flow has emerged as a favored poverty alleviation strategy in developing countries, particularly in Nepal. Policymakers believe that the financial contribution from migrant workers has provided impetus to development activities. They also opine that the scope of such revenue should be further enhanced. Nara Bahadur Thapa, Chief Manager of Nepal Rastra Bank at Biratnagar said, “The robust relationship between the growth in remittance and the reduction in poverty has evolved on account of a significant growth in the number of rural poor people seeking jobs in the Gulf countries.” </span></p>
<p class="Pa10" style="text-align:justify">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">“Annually, Nepal is receiving Rs 200 billion as remittance,” shared Dr Ganesh Gurung, a Remittance Economist. Based on the data of the Department of Foreign Employment, 1,500 people leave the country for foreign employment every day on an average as of August 2011. Quite naturally, the country has also been receiving proportional amount of remittances from these migrant workers employed abroad. From mid-July to mid-August 2011, the number of Nepalis going abroad for jobs was 45,165. This heavy reliance on foreign employment has shifted the Nepali economy from an agriculture-based economy towards a remittance-based one. </span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">The NLSS, 2010-11 reported that the common Nepalis’ access to basic facilities has improved over the years. Despite political upheavals and unrest, the average household income of Nepalis has increased by more than four-fold to Rs 202,374 over the span of 15 years due to increased receipt of remittances. Thapa shared that the remittance thus received is widely spent on daily consumption, followed by loan repayment and household property instead of capital formation. A Nepal Rastra Bank (NRB) report says that 78.9 per cent of the remittance is used on daily consumption, whereas 7.1 per cent of the remittance is used to repay loans followed by 4.5 per cent on household property, 3.5 per cent on education and only a minimal 2.4 per cent is used for capital formation. According to Dr Gurung, the increased remittance per household has not only increased consumption pattern but changed the social structure too. The nominal per capita consumption expenditure in aggregate increased from Rs 15,848 in 2003-04 to Rs 34,829 in 2010, at an annual average growth rate of 14 per cent. The survey also identified urban hills (9 per cent) and Kathmandu (11 per cent) having the least poor population while the highest population identified as poor live in the mountains (42 per cent) and rural hills in the Mid and Far-West regions (37 per cent).</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">According to Tamang, a significant chunk of the money received via remittance is being spent on imports and real estate instead of it being invested in productive sectors. The main challenge does not lie in receiving remittance but in channelizing it into productive use. Therefore, remittance should be included in the national development agenda to monitor its use. Though the government has given permission to manpower agencies to open foreign currency account in Nepali commercial banks, the government’s responsibility does not end here. Apart from monitoring and facilitating the use of this income, the government should encourage migrants to hold their income in financial assets within the country rather than abroad.</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">“Income received from remittance source has become an automatic instrument for poverty reduction in Nepal as both the government and the private sector have failed to create adequate number of jobs,” said Thapa. If we compare the domestic savings-to- GDP ratio, which is currently around 10 per cent, and national savings-to- GDP ratio standing at 36.7 per cent, the difference is largely due to remittance. Against the national savings-to-GDP ratio at 36.7 per cent, the total fixed investment-to-GDP ratio is 19.6 per cent, reflecting the failure of Nepali society to make productive use of remittance driven national savings. As of mid-June 2012, foreign exchange stood at Rs 427 billion, sufficient <span style="mso-spacerun:yes">&nbsp;</span>nough to <span style="mso-spacerun:yes">&nbsp;</span>cover merchandise and services import of around 10 months. This reflects two things. First, remittance is an important source of foreign exchange earnings, underpinning macroeconomic stability of Nepal. <br />
	</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">Second, the magnitude of foreign exchange indicates that both the government and the private sector have failed to make productive use of foreign exchange accumulated from remittance. Gurung opines that there is no question of utilising remittance for income generating activities for families living below the poverty line. In their case, remittance will take care of consumption. However, the families managing to save out of remittance can be encouraged to invest in income generating activities that could be an issue of micro management of remittance. Similarly, families engaged in agricultural activities and receiving remittance in excess of their consumption requirements should be encouraged to invest in high yielding crops and animal husbandry. This will help boost the agricultural production and consequently, their incomes. <br />
	</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">On the other hand, families residing in urban and semi-urban areas should be encouraged to invest in small services such as tailoring, taxi driving and undertaking petty businesses. For this to happen, the government can help establish multipurpose urban cooperatives. Lila Prasad Sitaula, Executive Director at Foreign Exchange Management Department of Nepal Rastra Bank, said, “The government, together with the NRB has introduced few important policies to utilize remittance productively. One of those is the issuance of remittance bond targeting migrant workers. Along with it, the NRB is formulating a policy to encourage banks and financial institutions for opening up branches in the rural areas, thus, bringing money in the banking system and channelize it in the productive sector. Furthermore, some provisions have been made to allow remittance companies to manage their forex balance in a more profitable manner, added Sitaula.</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">The government also started issuing foreign employment bond for mobilizing funds and making productive use of remittance since 2009-10 but so far, it has failed to gain popularity among the Nepali migrant workers abroad. According to Chandra Dhakal, Chairman of Nepal Remitters’ Association, remittance is the major factor in improving Nepal’s position in Human Development Index and improving poverty level. Remittance has played a major role in improving livelihood of millions of Nepalis. It has helped people have better access to health, education and sanitation. Dhakal added that the time has come to think about the productive investment of remittance for economic development of the country because capital has been a major constraint. <br style="mso-special-character:line-break" />
	<br style="mso-special-character:line-break" />
	</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">&nbsp;The Monetary Policy of 2012-13 has encouraged and facilitated those companies wishing to establish remittance business in various regions and countries. “We have realized the need for further expanding money transfer agencies to the countries where the supply of remitting service is few or not in existence,” shared Sitaula. Additionally, necessary bylaws have been introduced governing money transfer business activities. The government should prepare proper plans and policies in order to encourage the migrant workers to use formal channels instead of using illegal channels like ‘hundi’. Besides, the government should support the recruitment agencies in receiving recruitment charges, visa charges etc through proper banking channels which should automatically reduce the use of illegal banking channels.</span><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:"><br />
	<br />
	International Money Express (IME) was the first Nepali financial institution starting its services to control the flow of remittance through banking channel twelve years ago. And since the last few years, commercial banks through their representatives and agents have also been involving in money remitting business. As per a recent report of central bank, the total remittance for the first 11 month of FY 2011-12 stood at Rs 320.38 billion showing a growth of 39.6 per cent compared to a growth of 10.1 per cent during the corresponding period of the previous year. Dhakal said, “Though we don’t have any data related to remittance coming through remittance companies, we can estimate that more than 70 per cent of it is channeled through remittance companies.” According to him, remittance companies are doing their best in increasing their network and enhancing their service to bring more remittances through formal channels. The central bank and the government should cooperate and facilitate remittance companies in this noble endeavor, he said.</span> <span myriad="" style="font-size:10.0pt;mso-bidi-font-family:"><br />
	<br />
	“Commercial banks are coming into this business and making it more competitive, however, there is a huge misunderstanding in the scope of work for remittance companies and commercial,” said Dhakal. The present policies have been formulated on the assumption that remittance companies will bring the foreign currency and sell it to commercial banks so that both will be benefited. It is an irony that remittance companies are compelled to sell foreign currency to commercial banks, with whom they are competing at source. Since there is huge disparity in facilities available to remittance companies and commercial banks in terms of foreign currency, the central bank needs to review its policy to ensure sustainability of remittance companies, which are playing an instrumental role in Nepal’s inward remittance. On the other hand, the comfortable reserve position in the country leads to sufficient liquidity in the banking system that is being channelized into productive sectors. Moreover, the increase of foreign exchange reserves allows moving towards gradual liberalization of foreign exchange market.</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">“Preserving the value of foreign exchange is the main concern of the NRB,” said Sitaula. According to him, the central bank has been managing its foreign currency assets keeping it in major international currencies and different asset portfolios in accordance with the principle of portfolio diversification and minimizing currency risk. “A chunk of reserves is invested in highly liquid securities especially sovereign bonds and rest is placed with foreign central banks, BIS and different highly rated foreign commercial banks based on the ratings of international rating agencies such as Standard &amp; Poor’s and Moody’s,” shared Sitaula. While safety and liquidity constitute the main objectives of reserve management in Nepal, return optimization becomes an embedded strategy within this framework, he added.</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">Remittance increases foreign currency availability in the domestic market and raises national savings. Availability of foreign currency, in turn, facilitates financing of essential import and can avert possible balance of payments (BoP) crisis. Despite the rising trade deficit, Nepal witnessed a record current account as well as BoP surplus in the last year because of substantial flow of remittances. Had remittance flows stagnated last year, Nepal would have witnessed deficit in the current account and lesser BoP surplus, said Sitaula. Remittances alone can finance about 90 percent of merchandise trade deficit of the country.</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">These facts reveal a crucial role remittances play in attaining macroeconomic stability in the country. Though increasing remittance has its own advantages, it is also true that over dependency on it in the end will eventually lead to economic failure if the flow of remittance is disrupted. “Of course, nothing would be better than bringing development projects with sufficient funding to utilize the labor force in Nepal itself. For this, the long-term focus ought to be the development of entrepreneurial capabilities of the Nepalis so that remittances could be turned into productive investment that brings higher growth and employment generation,” said Gurung.</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">However, having said that, remittance has been the only hope in recent times to rescue the faltering economy from the low-level equilibrium trap when the implementation of capital expenditure programme is likely to go on a wild goose chase. Remittance has been imperative for survival, poverty reduction, and eliminating impoverished condition of life in the country. At the same time, the government has to resolve these problems, as remittance is one of the growing and most crucial sectors of the economy.</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">&nbsp;</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">&nbsp;</span></p>
<p class="Pa1">
	<span class="A8"><span style="font-size:24.0pt;color:windowtext">COVER STORY</span></span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">&nbsp;</span></p>
<p class="MsoNormal">
	<span class="A49"><span myriad="" style="font-size:23.0pt;line-height:
115%;font-family:">‘Remittances can have Long-term Impact if Channeled into Productive Investment’<br />
	<br />
	<br />
	<img alt="ganesh gurung" border="1" height="313" hspace="5" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/ganesh-gurung.jpg" vspace="5" width="300" /><br />
	</span></span></p>
<p class="Pa1">
	<span style="font-size:16px;"><span class="A5"><span style="color: windowtext;">DR GANESH GURUNG </span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:16px;"><span class="A5"><span color:="" style="line-height: 115%; font-family: ">&nbsp;Remittance Economist</span></span></span></p>
<p class="MsoNormal">
	<strong><span style="font-size:16px;"><strong>&nbsp;</strong><br />
	&nbsp;</span></strong></p>
<p class="Pa23" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">How do you view the contribution of remittance to the reduction of poverty in Nepal?</span></strong></p>
<p class="Pa10" style="text-align:justify">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">This, in fact, is an interesting aspect. The post conflict political situation has not witnessed major economic growth and hence unemployment and underemployment is an ever growing phenomenon. The political unrest decelerated the pace of industrial expansion and halted plenty of small and medium enterprises all over the country creating unemployment throughout the country. In that situation, a huge number of migrant workers amplified the number because of which, foreign employment became an emerging business in Nepal’s context. </span></p>
<p class="Pa10" style="text-align:justify">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">In my opinion, remittance has played a vital role in poverty reduction. Various reports and planning documents published in recent times have attributed the dramatic fall in absolute poverty to the inflow of remittances in Nepal. The percentage of all households receiving remittances in Nepal during the year 2010/11 was 55.8 per cent. This is a sharp rise from the year 2003/04 when it stood at 31.9 per cent. There has been an 18 per cent decline in absolute poverty in the six years between 2003/04 and 2009/10. Therefore, according to me, foreign employment is a major economic phenomenon in Nepal and its relation to the economic growth of the country is integral. </span></p>
<p class="MsoNormal">
	 </p>
<p class="Pa23" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">What is the trend of use of remittance in Nepal in general households? What is the ratio of its use in productive and unproductive sectors? How do you analyze such trends? </span></strong></p>
<p class="Pa10" style="text-align:justify;text-indent:14.0pt">
	<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">I believe that there are also some long-term opportunities brought about by foreign employment. Children of the foreign employment workers are getting quality education paid for by the remittances from their parents. The nation can benefit in the long term out of this trend as skilled and educated manpower is produced for the economy.<br />
	<br />
	The remittance sent by the migrant workers can be used to further generate wealth in the country. Besides spending on consumption, it has to be invested in productive sectors, which would bring about some positive change on the major macroeconomic variables of the country. Remittances can produce long term impact only if it is channeled into productive investment. Going by the current trends of consumption in Nepal, if the remittances are soaked up by consumption only and are not turned into investments, the short term boost provided by it in the economy will not be sustainable. Productivity will decline and the economic choices get tougher if the situation is not addressed in time and is stalled being shortly content with the remittance-based income. More remittance money is spent on consumption than in any other aspects. Only 2.4 per cent of remittance money is spent for capital formation in our country.</span> <span myriad="" style="font-size:10.0pt;mso-bidi-font-family:"><br />
	<br />
	Due to increase in revenues from remittances, the currency of a country becomes stronger compared to that of other nations resulting in exports becoming more expensive for other countries to buy. This can make the manufacturing sector less competitive. Thus, with the increase in the purchasing capacity of households receiving remittance, there is high demand of consumption and imported goods. There has been an appreciation of real exchange rate due to rise in the price of non-tradable with respect to tradable. Furthermore, there has been an erosion of manufacturing sector entailing to their reduced competitiveness. </span></p>
<p class="MsoNormal">
	 </p>
<p class="MsoNormal">
	 </p>
<p class="MsoNormal">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">How do you compare the remittance figures between today and five years ago?</span></strong></p>
<p class="Pa10" style="text-align:justify;text-indent:14.0pt">
	<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">Despite the huge contribution of remittance to GDP, Nepal’s economic growth rate has never exceeded 4 per cent except in 2005 although the indication is that remittance will go up in the years to come. A remittance share of 20 per cent of the total GDP should have created enough employment opportunities, but the unemployment rate still stands at 42 per cent. Furthermore, there appears to be an inversely proportional relationship between employment abroad and industrial growth. For instance, industrial production growth rate was only 1.8 per cent in 2011 whereas from 2002 to 2005, the growth rate was 8.7 per cent when remittance inflow was far less. In this ratio, the remittance pattern is in the increasing trend if we compare the figures of 2010/11 and 2004/05. However, the challenge is to channelize the remittance in productive sector. </span></p>
<p class="MsoNormal">
	 </p>
<p class="MsoNormal">
	<strong>&nbsp;</strong></p>
<p class="Pa23" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">What is the contribution of remittance in GDP? </span></strong></p>
<p class="Pa23" style="margin-top:5.0pt;text-align:justify">
	 </p>
<p class="Pa10" style="text-align:justify">
	&nbsp;<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">It is estimated that the number of Nepali migrant workers is officially 1.4 million and the number of undocumented migrant workers is estimated to be the same. Annually, Nepal is receiving Rs 200 billion as remittance and its contribution to GDP is about 20 per cent. According to World Bank report - 2011, Nepal ranks sixth among countries in whose GDP remittance holds a very high share. It rose from Rs 47.5 billion in 2001/02 to Rs 231.73 billion in 2009/10. Remittance-to-GDP ratio almost doubled from 10.3 per cent in 2001/02 to 19.6 per cent in 2009/10. Therefore, we can say that there has been a positive impact of remittance in GDP. </span></p>
<p class="MsoNormal">
	 </p>
<p class="Pa23" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">How successful has the state become to utilize the remittance income in the development activities? </span></strong></p>
<p class="Pa10" style="text-align:justify">
	<strong>&nbsp;</strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">It is rather disappointing that the state has not been able to utilize the remittance to the optimal level. Very less has been done in this aspect. With a huge number of migrant workers working across the globe, remittances are emerging as a new way for alleviating poverty in the developing and least developed countries. </span></p>
<p class="Pa10" style="text-align:justify">
	&nbsp;<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">Due to unhealthy investment environment in the home country, remittance money has not been used productively which has made Nepal a consumption oriented economy rather than an investment oriented one. This has slowed the pace of development activities in the country. Presently, 78.9 per cent of remittance money is used for daily consumption while only 2.4 per cent is being used in the productive sector. So, the government should create an investment friendly environment in order to use the remittance money in the productive sector. </span></p>
<p class="Pa10" style="text-align:justify">
	&nbsp;<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">In my opinion, the migrant workers should be trained and well informed about what they can do with the money they earn at destination countries. The recruiting agencies should take them in confidence that even after they return to their country, they could have a secure future. Different plans and policies have to be made to create investment friendly environment for these workers. In addition, proper investment environment in the home country acts as a backup in case of emergencies oversees and even during financial crisis. Similarly, the government should introduce measures to encourage savings among migrant workers and their remittance recipient families. </span></p>
<p class="MsoNormal">
	 </p>
<p class="Pa23" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">What is your vision to utilize the expertise of the private sector as well as the state to utilize the earning from remittance? </span></strong></p>
<p class="Pa10" style="text-align:justify;text-indent:14.0pt">
	<strong>&nbsp;</strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">Private sector has a great role to play here. They are the ones who should be making attractive and feasible business ventures that are appropriate for migrants. Migrant workers do not know about the viable projects where their money can be invested. Therefore, in collaboration with these migrant workers, the private sector should establish business ventures that are not only viable but also fulfill the need of the country. Thus, both will have a win-win situation.<br />
	<br />
	People recruited for foreign must be provided several types of training that can enhance their productivity to get better jobs. Proper trainings should be provided to these workers to gain required skills in the destination country. Another major area where private companies are key players is the remittance receiving procedures. There are dozens of private money transfer companies that are providing the service and transferring money through legal and formal channels. The spread of such private services to even the rural areas of the country suggests increasing demand for their services and profitability potential. </span></p>
<p class="MsoNormal">
	&nbsp; <br />
	 </p>
<p class="Pa23" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">What is the situation of Labor Desk and Welfare Fund in the present situation? Is there enough transparency? <br />
	<br />
	</span></strong></p>
<p class="Pa10" style="text-align:justify;text-indent:14.0pt">
	<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">The Labor Desk has acted more as an extended bureaucracy on the part of the government. The Welfare Fund has collected Rs one billion as of September 2011. However, no significant work has been accomplished to properly utilize this amount. There is less transparency regarding the fund collected thus far. In my opinion, the fund should be utilized to provide trainings, skill-enhancing workshops, and information required for foreign employment. This way, the migrant workers will be well equipped with required skills and well informed about the destination country. This will automatically minimize the risk of the labors being cheated or discriminated at the host nation. </span></p>
<p class="MsoNormal">
	<strong>&nbsp;</strong></p>
<p class="MsoNormal">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">What is the contribution of remittance in Balance of Payments?</span>&nbsp; <br />
	</strong></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">Nepal was compelled to borrow $42.5 million from the International Monetary Fund under its rapid credit facility to address BoP deficit one-and-a-half years ago. However, the acceleration in the growth of remittance along with the improvement in the service account has helped maintain a comfortable balance of payments (BoP) situation. After remaining in deficit for two years, the country’s BoP turned surplus in the second last month of the last fiscal year and has continued to grow since. In the same period last year, the BoP had recorded a deficit of Rs 5.72 billion.</span></p>
<p class="MsoNormal">
	<strong>&nbsp;</strong></p>
<p class="MsoNormal">
	<strong><strong>&nbsp;</strong></strong></p>
<p class="Pa23" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">An initiative of the government-foreign employment bond has said to have failed miserably. How can such initiatives be made successful?</span></strong></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">In my opinion, it is necessary to create a mechanism that provides incentives to the stakeholders so that they are keen to sell on the one hand and on the other, interest rate and other facilities given are not attractive for the migrant workers. Thus, the government should make the bond an attractive package and provide them some more incentive so that it is comparatively profitable for them to buy.</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">Foreign employment bond is one of the key instruments that the government has adopted to raise internal loans. However, lack of awareness and complicated procedures are responsible for the low subscription. The first foreign employment bond, issued in fiscal year 2009-10 had seen subscription worth Rs 4.6 million of the total issue of Rs one billion at 9.5 per cent interest. Likewise, last year too, bonds worth only Rs four million of the total issue worth Rs five billion were sold.</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">The repetitive failure of the bond to attract enough investment from the migrant worker community has been attributed to the absence of proper marketing channels. The failure of the last two batches had got NRB to look into diverse markets allowing even Non Resident Nepalis (NRN) and returnee migrant workers to purchase the bond instead of only focusing on migrant workers in the Gulf countries and Malaysia. The layman is missing out on booking good returns by investing in bonds due to lack of awareness about investing in government securities.</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">&nbsp;</span></p>
<p class="Pa1">
	<span class="A8"><span style="font-size:24.0pt;color:windowtext">COVER STORY</span></span></p>
<p class="Pa1">
	<span class="A8"><span style="font-size:24.0pt;color:windowtext"><span style="mso-spacerun:yes">&nbsp;<br />
	<img alt="bala bahadur tamang" border="1" height="293" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/BAL-BAHADUR-TAMANG.jpg" vspace="10" width="300" /></span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:18px;"><span class="A5"><span color:="" style="line-height: 115%; font-family: ">BAL BAHADUR TAMANG <br />
	President <br />
	Foreign Employment Association</span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:18px;"><span class="A5"><span style="line-height: 115%; font-family: ">&nbsp;</span></span></span></p>
<p class="MsoNormal">
	<span class="A5"><span myriad="" style="font-size:10.0pt;line-height:
115%;font-family:">&nbsp;</span></span></p>
<p class="MsoNormal">
	<strong><span class="A5"><span myriad="" style="font-size:10.0pt;line-height:
115%;font-family:">&nbsp;</span></span></strong></p>
<p class="Pa23" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">Which are the countries currently demanding Nepali labors on a big scale? What kind of wages do these migrant workers earn abroad? </span></strong></p>
<p class="MsoNormal">
	<strong>&nbsp;</strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">Most of the world’s estimated 150 million migrants are people searching for improved economic opportunities abroad. Nepal has not been able to escape this phenomenon either. Economic migration to the Middle East from countries in South Asia and other parts of the world was spurred-on by the oil boom in the early 1970s. The reasons behind the migration to the Gulf countries are almost same in Nepal as other parts of the world. Foreign labor migration has developed in such a way over the decades that it has shifted Nepal’s agricultural-based economy towards a remittance based one.</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">Nepalis labors are demanded mostly in countries like Malaysia, Dubai, Saudi Arabia and Qatar. Most of the Nepali labors ranging from unskilled, semi-skilled and skilled are equally opting to receive foreign employment to these countries. The minimal wage rate for unskilled labor is 800, semi-skilled is 1,000 and for skilled labor is 1,200 Saudi Riyal. Apart from it, some European countries are also demanding skilled Nepali labors. However, the Middle East nations stand above in this aspect.</span></p>
<p class="MsoNormal">
	<strong>&nbsp;</strong></p>
<p class="Pa23" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">Why is it that the Nepali manpower agencies have not been able to send skilled manpower to the developed countries? How can this problem be resolved? </span></strong></p>
<p class="MsoNormal">
	<strong>&nbsp;</strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">There is a demand of skilled workers in the international labor market. However, there is a vast difference while comparing the educational and technical standards of Nepali labors with those of the other countries. It is believed that Nepali workers are accepted in East and South Asia as well as the Gulf countries only because they come cheap and do whatever job is given to them. They lack required technical skills which makes it difficult for them to get visas for recruitment in the developed nations.</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">I strongly believe that the government should improve the curriculum in schools so that it can provide more practice-based knowledge. Apart from it, the government should also conduct consultation meetings with the experts, occupational groups, trade unions and foreign employment enterprises to make rules and regulations for the promotion and management of foreign employment occupation.</span></p>
<p class="MsoNormal">
	 </p>
<p class="MsoNormal">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">How do you view the conduct of manpower agencies operating in Nepal? What are the measures that your association is initiating to give this industry more credibility?&nbsp;&nbsp; </span></strong><br />
	<br />
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">The main objective of the association is to monitor the manpower agencies providing foreign employment services, for their efficacy and transparency. We are working to make foreign employment business safe, well managed and decent as well as protect the rights and interests of the foreign bound workers and foreign employment entrepreneurs. There are many incidences of fake employment contracts, visas and forged documents etc. The result is that many Nepalis become stranded in foreign countries or are deported from these destinations where they go for work.</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">A large number of unlicensed agencies exist in the manpower market in Nepal today. Estimates suggest that more than 200 unlicensed agencies are clandestinely involved in this business and bypass all official channels. For example, there are some manpower agencies charging more than Rs 2-3 lakhs per person for a position of manual labor in the Gulf countries or Malaysia. However, the actual cost should be much less. The association is closely monitoring the manpower agencies to make them follow the code and conduct of FEA. <br />
	</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">A high-level advisory committee with the participation of the Ministries of Labor and Finance, the National Planning Commission and foreign employment organizations should jointly work, in order to expand foreign employment opportunities and increment the reliability of agents. The association is preparing a draft of proposal concerning the trainings that is to be provided to the workers seeking foreign employment opportunities in the days ahead.</span></p>
<p class="MsoNormal">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">How can ‘Hundi’ transaction be controlled? Why have manpower agencies not been able to encourage the migrant workers to use formal channels for remittance flow?</span></strong></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">Remittance is one of the important sources of income. The contribution of remittance on Gross National Product is 23.6 per cent. In some cases, it seems that the process of remittance is lengthy and costly. The government should prepare proper plans and policies in order to encourage the migrant workers to use formal channels for remittance purpose. It should provide orientation classes and distribute booklets mentioning the disadvantages of using illegal banking channels like hundi, for instance. The government should also support the recruitment agencies in receiving recruitment charges, visa charges etc through proper banking channels and thereby automatically reduce the use of illegal banking channels. Currently, about 25 per cent of remittance flow is being carried out through hundi. The only way we can control hundi transactions is through easy banking access and close monitoring.</span></p>
<p class="MsoNormal">
	 </p>
<p class="MsoNormal">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">What is your suggestion to direct the inflow of remittance exclusively from banking channels?</span></strong></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">We have to make the migrant workers understand that huge amounts can be invested in micro, technological and small and medium enterprises. This not only generates employment opportunities, but also stimulates demand for goods and services leading to increment in household income and acquisition of real estate. We can do this by providing trainings to migrant workers before they leave for their destination countries. We have to make them realize that their money would be invested in securing their future and they would have a stake in government projects. It will definitely encourage them to use the formal channels of remittance flow. Apart from it, the easy mechanism for remittance flow through banking channel has to be set up accordingly. Only then, the migrant workers would be encouraged to use the banking channel to send their money to Nepal.</span><br />
	<br />
	 </p>
<p class="MsoNormal">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">How do you think the families back in Nepal are utilizing the money received from migrant workers?</span> <br />
	</strong></p>
<p class="Pa10" style="text-align:justify">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">Instead of the money going to productive sectors, a significant chunk of the remittance is being spent on imports and real estate. Households that owned houses have decreased while those renting houses have increased. The houses of migrant workers have been modernized replacing thatched roof with steel roofs. Access to power has substantially increased too so are the households with safe drinking water, toilets and LPG for cooking. Consumption expenditure on food, housing, and education has increased resulting in a rise in the living standard. However, less money has been invested for capital formation at the macroeconomic level. </span></p>
<p class="MsoNormal">
	 </p>
<p class="MsoNormal">
	<strong>&nbsp;<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">It is said that the Foreign Employment Bond issued by the government has failed due to the uncooperative behaviors of manpower agencies. What is your take on it? What is your suggestion to best utilize the remittances sent by the migrant workers?</span><br />
	</strong></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">It is very unfair to say that manpower agencies have shown uncooperative behavior regarding the Foreign Employment Bond. Actually, there has not been enough publicity of the bond to the migrant workers. Besides, the migrant workers do not have much purchasing power as they have many financial obligations that need to be fulfilled with limited income.</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">As of now, remittance is being used in unproductive areas like building houses and other unnecessary products. It would be much better if remittance could be used in productive sector like education, hydro power etc.</span></p>
<p class="MsoNormal">
	<strong>&nbsp;</strong></p>
<p class="Pa23" style="margin-top:5.0pt;text-align:justify">
	<strong>&nbsp;<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">The welfare fund has collected around Rs one billion as of September 2011 but it has not been utilized or any productive work. What are the necessary steps that can be taken to properly utilize this amount?</span></strong></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">According to the Foreign Employment Act 2064 BS, the Foreign Employment Promotion Board is expected to use the amount collected under the Welfare Fund, in conducting foreign employment awareness programs in 72 districts. I, being a member of the said board, raise these issues to the government to address the problems faced by the migrant workers.</span></p>
<p class="Pa10" style="text-align:justify">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">In my opinion, the board has to provide loans with minimum interest to those working abroad. If their families who are in Nepal get loans, there is a good chance that they will invest such amount in the p</span></p>',
			'published' => true,
			'created' => '2012-10-10',
			'modified' => '2012-10-31',
			'keywords' => '',
			'description' => 'Income received as the Nepali workers’ remittances working abroad has become an automatic instrument for poverty reduction in Nepal. Remittance has been recognized as a key to solve various economic ills afflicting the country. Moreover, it has raised some obvious questions.',
			'sortorder' => '600',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 11 => array(
		'Article' => array(
			'id' => '660',
			'article_category_id' => '40',
			'title' => 'Drug Drive : The Rising Business Pharmaceutical Companies In Nepal',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	<strong>By Sushila Budhathoki <br />
	</strong></p>
<p>
	<strong><br />
	</strong></p>
<p>
	<strong><br />
	</strong></p>
<p>
	<br />
	<span style="font-size:14px;"><strong>Drug Drive : The Rising Business Of Pharmaceutical Companies In Nepal</strong></span></p>
<p>
	 </p>
<p>
	<br />
	<br />
	<img alt="coverstory July 2012" border="1" height="226" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/drugs.jpg" vspace="5" width="400" /><br />
	<br />
	Nepal’s pharmaceutical expense is at par with other South Asian countries, thanks to the increase in the number of pharmaceutical companies and their production. In 2008, the total per capita pharmaceutical expenses was US$ 6.96 while the total amount of pharmaceutical expenses stood at Rs 13.09 billion in Nepal. Mahesh Gorkhali, President of Association of Pharmaceutical Producers Nepal (APPON) says Nepali companies are growing at around 15-20 percent annually. The growth has resulted in around 42 per cent command of the market by Nepali products with strong presence and distribution network of marketers in the rural and remote areas. <br />
	<br />
	<br />
	A ‘Market Study Report on Pharmaceutical Products in Nepal’ conducted in 2011’ depicts the shining business of Nepali pharmaceutical industries. According to the report, Nepal experienced significant growth in medicine production in Asia when the growth rate was 11 per cent globally in the year 2009. Nepal obtained annual growth rate of pharmaceutical products at 19.52 per cent even ahead of India who saw 13 percent growth during the same period. According to the report, the total turnover of Nepali companies was approximately Rs 6.8 billion where the company registering lowest sales turnover was Rs 20 million and the highest at about Rs 600 million. The World Health Organization’s report ‘The World Medicines Situations 2004’ listed Nepal among 84 countries that produced pharmaceutical finished products from imported ingredients whereas India was categorized among 17 countries that had innovative capacity. <br />
	<br />
	<br />
	Pradeep Jung Pandey, President of Lomus Pharmaceutical Pvt Ltd says that Nepali companies are capable of producing some of the segments out of big variants of medicinal products. He adds, “We have the potential of increasing the market share at a fast pace.” Most of the Nepali allopathic medicines are of oral dosage forms of tablets, capsules, liquid, syrup, powder for oral suspension while topical preparation like cream, ointment and lotion are also produced. If vaccines, contraceptives, ARV (Anti Retroviral), large volume drugs and few others are excluded, Nepali companies tend to acquire big market share, say experts. Radha Raman Prasad, Director General and Chief Drug Administrator at Department of Drug Administration (DDA) states that medicines can be imported like other goods from the global market. “When the market is dictated by the Nepali industries, the foreign companies that cannot compete will automatically exit,” he says. <br />
	<br />
	<strong><br />
	Demand, Supply and Investment <br />
	</strong><br />
	<br />
	<img alt="" border="1" height="228" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/drugs1.jpg" vspace="5" width="300" /><br />
	<br />
	Demand of Allopathic medicines is high in Nepal. There are altogether 45 Nepali companies operating in the market with 4,677 brands and thousands of products. According to the market study 2011, public expense on pharmaceuticals was Rs 2.96 billion in the year 2008. Similarly, total private expense on pharmaceutical products was Rs 10.06 billion. <br />
	<br />
	<br />
	The size of Nepali medicine market is estimated at Rs 18 billion and the Nepali companies command 42 per cent market share. Manufacturing of oral antimicrobials like penicillin, β-lactam, Non penicillin, antifungals, anthelminthic and antiviral (Simplex) is common while some are engaged in producing non-steroid pain killers, nutritional supplements, enzymes, haematinics, oral steroids, cardiovascular (heart and blood pressure), diabetes, psychiatry (mental disorder) etc. <br />
	<br />
	<br />
	Many Nepali and foreign companies are importing and supplying pharmaceutical products. Their role is significant for fulfilling the demand of various kinds of medicines in Nepal. According to DDA, 257 foreign pharmaceutical companies acquired licenses to sell their allopathic medicines in the year 2067/68. Similarly, 11,769 medicines are registered with DDA including 7,092 foreign and 4,677 Nepali products. There are altogether 1,544 wholesalers and 8,110 retailers throughout the country. <br />
	<br />
	<br />
	The estimated investment in the pharmaceutical industry of Nepal is around Rs 735 million to Rs 1.47 billion. Mahesh Gorkhali, President of Association of Pharmaceutical Producers Nepal (APPON), explores the need of high investment for the establishment of a pharmaceutical Company. He says, “For a good company mainly producing tablets, capsules and liquids, around Rs 25-30 million is required as an investment depending upon the choice of machinery equipments, building, location etc. Establishing an industry in city areas is usually costlier than in the terai or hilly regions.” Nepali industries are not API (Actual Pharmaceutical Ingredients) manufacturers; they import raw materials from other countries. The cost of the raw materials is also increasing investment in the pharmaceutical industries. <br />
	<br />
	<br />
	<strong>Emerging Pharmaceuticals <br />
	</strong><br />
	The number of Nepali allopathic companies has reached 58, according to the DDA. Altogether, 11 new allopathic companies have been registered in the FY 2068/69 whereas only two allopathic companies were registered in the previous year. A number of pharmaceutical companies have been established in different districts like Dang, Bharatpur, Sunsari, Jhapa, Bhaktapur, Kathmandu, Nawalparasi, Birgunj, Lalitpur, Bara and Parsa with investment of billions of rupees (see table). According to the DDA, pharmaceutical companies registered in the FY 2068/69 have proposed a total investment of 1.83 billion Rupees including investment from both herbal and allopathic companies. <br />
	<br />
	<br />
	<strong>Job Destination <br />
	</strong><br />
	<img alt="" border="1" height="220" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/drugs3.jpg" vspace="5" width="300" /><br />
	<br />
	<br />
	Pharmaceutical business has employed thousands of people in pharmaceutical production, distribution and marketing. There are 4,200 medical representatives, 2,474 pharmacists and more than 13,000 professionals employed with various pharmaceutical companies. Regular human resource like managers, accountants, computer operators, receptionist, cleaners, drivers, kitchencrew, HR and admin officers also find work with these organisations. Pharmaceutical companies also provide internship to hundreds of students every year who are mostly recruited in the very companies at a later stage. Sanju Acharya, Administrative Assistant at Nepal Pharmacy Council, opines that there is a huge demand of pharmacy graduates in the pharmaceutical sector. Pharmacy professionals are of two categories; those who have graduated in Pharmacy and above up to PhD level and the ones who complete three year Diploma in Pharmacy under the Council for Technical Education and Vocational Training-CTEVT program. Pharmacy students are highly in demand at Pharmacy colleges as teachers and laboratories and hospitals as researchers or lab assistants. By law, a hospital must own a pharmacy operating 24 hours, which also provides opportunity to these students. Graduates from the Institute of Medicine (IOM) and Kathmandu University are mostly found applying for foreign colleges in search of greener pastures. Having seen the better job opportunities, many colleges have started to include pharmacy as a subject in their curriculum. There are around 16 pharmacy colleges affiliated to Tribhuvan University, Pokhara University and Purbanchal University. Together, they produce pharmacy graduates for the industry with an annual intake of around 600- 650 graduates yearly. Kathmandu University runs B Pharm, M Pharm, Pharm D and PhD programs while CTEVT runs three year Diploma in Pharmacy program at 24 different institutions, with an annual intake of 960 persons. The undergraduates are mostly utilized in community pharmacies. <br />
	<br />
	<br />
	<strong>High Competition <br />
	</strong><br />
	<br />
	The market share of Nepali companies in the urban set up is approximately 20 per cent and the rest 80 per cent in the rural markets. The reason behind this is credited to high competition among Nepali pharmaceutical companies and limited customers or prescribers, in spite of progressive marketing and promotion of the medicines. It clearly depicts that if the share of Nepali products increases in the city areas, their total share in the pharmaceutical market will experience a significant growth ultimately. However, new industry registrations too signal to follow the same trend which industrialists fear would lead to further competition. Government authorities state that the import of large volumes of drugs from other countries is due to the scarcity of varieties of medicines in the market. On the other hand, Industrialists accuse the government of importing many similar products from India which they say is also one of the reasons behind severe competition. Most of the medicines are ‘me too’ products which has compelled high competition between Nepali companies as well as the imported ones. Most pharmaceutical products are related to a particular disease or a group of diseases (therapeutic segment), and are not spread in diverse therapeutic segments. Apart from that, products like Albendazole, Amoxicillin, Azithromycin, Ciprofloxacin, Fluconazole, Paracetamol, Ibuprofen, Hyoscine, Metronidazole, Ofloxacin, etc are manufactured by around 20 to 30 companies. Similarly, around a dozen of companies produce the cardiovascular and diabetes medicines. “There should have been competition on varieties and quality of the medicines but some Nepali companies are desperately competing because of the similar products,” says freelance market researcher Rajan Raut. Similar products from foreign countries find their stand in the market even tougher as some of the Nepali products have even substituted imported products. <br />
	<br />
	<br />
	<img alt="coverstory" border="1" height="771" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/drugs12.jpg" vspace="5" width="400" /><br />
	<br />
	<br />
	<strong>Monitoring and Inspection <br />
	</strong><br />
	<br />
	The DDA – that has 31 staffs which include 13 drug inspectors of different levels – has been facing a hard time in operating effectively. Such a limited manpower is considered a very low number to maintain the growing number of pharmaceutical industries, wholesalers and retailers. With little human resource to speak of, DDA runs different programs like marketing authorization, inspection, import control, licensing, market control, medicine advertisement and promotion, quality control and clinical trial. Quality inspection of medicines including laboratory reagents, surgical items, bandage, sutures, catheters etc are also some areas the DDA has been found lacking at. National Medicine Laboratory is the only public sector laboratory which monitors quality of the medicines through samples collected by the DDA. However, it doesn’t publicize the results publicly. Lack of good distribution practice and storage practice seems a common problem in many places. This is the reason why consumers often complain about consuming outdated medicines or shortage of essential medicines, blood, oxygen etc. Lack of proper monitoring system of pharmaceutical product is feared to grow ineffectiveness. No medicine company is found reporting its medicinal errors. As per the law, up to Rs 300,000 is to be paid by the manufacturer as compensation if medicine causes harm to the consumer. Baburam Bhattarai, President of Nepal Chemist and Druggist Association urges the need of regulating unregistered medical stores because according to him, they contribute towards creating health hazards. He says, “The government monitoring system has not been so effective. Besides, the current political situation is also fostering such business.” There is no specified division or section in DDA for WHO-GMP inspection either. Although the DDA has insisted that it has not found a single case of counterfeit drug, doctors from different districts bordering India fear its presence in the Nepali market. High prices of medicines have always been a controversial issue. DDA has fixed the actual price for up to 10 medicinal products including saline, painkillers and oral dehydrates. Shyam Adhikari, Drug Inspector at the DDA says they are looking at a mechanism to ascertain the prices of Nepal made medicines as well as the imported ones in the coming days. Recently a ‘Price Monitoring Committee’ has been formed with the participation of members from the DDA, pharmaceutical industry and consumers’ representatives. However, the companies insist that they keep the profit margin scientifically with the approval of the Government of Nepal. Pandey points that the Nepali medicines are priced either at par or a little cheaper than those of their Indian counterparts. Citing the example of a paracitamol tablet, he says, “A single unit of citamol tablet costs Rs 2 in Pakistan and India while it costs only one rupee in Nepal.” Pharmaceutical companies do not produce drugs in a large volume neither do they run with full capacity. Nepali pharmaceutical companies are using 20 to 90 per cent of their respective capacities for production and operate about 8 hours daily which is said to be the major reason behind the high production cost of the medicines. <br />
	<br />
	<br />
	<strong>Investment in Research &amp; Development <br />
	</strong><br />
	<br />
	There are only two or three companies that have been producing biological products. Most of the demand of injectables and biological drugs is fulfilled through imports. Essential medicines which require high technology are donated to Nepal by different international aid agencies from abroad. They also provide vaccines for expanded programs of immunization and medicines for the treatment of tuberculosis, leprosy, HIV/AIDS and sexually transmitted infections (STI), malaria, kala-azar and filariasis etc, for free. Nepali companies are producing around 33 per cent of essential medicines mainly producing therapeutic drugs. Industrialists are apprehensive about invest in research &amp; development (R&amp;D) because of the current political instability and law and order situation, say analysts. Most of the Nepali companies have limitations in terms of technical capability and innovation. On the other hand, foreign companies including multinational ventures have access to latest technologies and are engaged in import of medicines. However, there is no technical collaboration between the multinational ventures and Nepali companies. Industrialists too agree that Nepali pharmaceutical companies should conduct varieties of research and fulfil the demand of high tech medicines in Nepal. They accuse the government for not supporting them adequately as R&amp;D requires high investment, manpower and technology. <br />
	<br />
	<br />
	<strong>The Way Forward <br />
	</strong><br />
	<img alt="" border="1" height="200" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/drugs4.jpg" vspace="5" width="300" /><br />
	<br />
	Many Nepali companies are manufacturing high quality products of international standards and fostering the growth of the Nepali medicine market. Zinc tablet, which is useful for treating ringworm disease in children and popular among international companies, is a product of Deurali Janata Pharmaceutical (DJP). Radha Raman Prasad, Director at DDA, seems satisfied with the quality of Nepali pharmaceutical products. He says, “Few samples have been found lacking quality in the market due to some reasons but I think the overall quality of Nepali medicines is at par with international standards.” Experts involved in the business of medicinal products suggest drug producers to work collectively towards exporting Nepali medicines. Prasad admits that export is not just limited to the quality of the drug. He says that every country has some clauses and Nepal can fulfil those clauses. Some of the Nepali companies are even trying to export drugs to Singapore and Malaysia. “We are very rich in resources for pharmaceutical products, all we need is skilled manpower and the technology. Provided these aspects, we have huge potential for export,” he adds. The much awaited National Drug Policy has been drafted by the DDA. According to Prasad, efforts have been made during the preparation of the draft to address the issues of pharmaceutical industries. He says, “The draft focuses on new areas of thrust, in comparison to the previous policy which focused on export. It has a provision of contract manufacturing for technology input, providing incentive for R&amp;D activities, manufacturing, clinical research and attracting foreign countries for R&amp;D.” From a human resource perspective, students who have studied bio pharmacy abroad have started returning to Nepal. This development promises to enable companies to operate various researches. In August 2011, DDA permitted contract manufacturing of pharmaceutical products to the manufacturing contractors owning WHO-GMP certificate and licenses of the products. The Department of Commerce and Supplies and District Administration Offices are conducting inspections on a regular basis to find out sales of expired drugs and also making their findings public. GMP and GLP (Good Laboratory Practice) standards are meant to pave the way for assuring efficacy and quality of the drugs in the international market and are expected to ease the export of the products. Currently, there are 26 companies that are manufacturing pharmaceutical products by maintaining GMP standards. The rest are also in the process of obtaining GMP as the DDA has urged all non-GMP certified companies to come under GMP certification by the end of the year. <br />
	<br />
	<br />
	<img alt="" border="1" height="457" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/drugs_11.jpg" vspace="5" width="401" /><br />
	<br />
	<strong>COVER STORY <br />
	</strong><br />
	<br />
	<strong>‘The Growth of Nepali Pharmaceutical Industries is Quite Appreciable’ <br />
	</strong><br />
	<img alt="" border="1" height="330" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/BABURAM-BHATTARAI.jpg" vspace="5" width="300" /><br />
	<br />
	<strong>BABURAM BHATTARAI <br />
	President <br />
	Nepal Chemist and Druggist Association <br />
	(NCDA) <br />
	<br />
	</strong><br />
	<br />
	<strong>How do you see the growth of Nepali pharmaceutical industries in recent times? <br />
	</strong><br />
	<br />
	The growth of Nepali pharmaceutical industries in recent time is quite appreciable. Around 42 per cent home demand is fulfilled by them so it can be considered satisfactory. I think the Nepali medicines are doing good business because the products are qualitative and the demand is increasing on a regular basis. I see a golden future for Nepali pharmaceutical products. <br />
	<br />
	As far as my knowledge is concerned, the level of consumption for most of the products made in Nepal is satisfactory and so is their supply system. However, most of the companies are producing the same types of medicine which has created unhealthy competition. <br />
	<br />
	<br />
	<strong>How is the production and export-import business of pharmaceutical products in Nepal? <br />
	</strong><br />
	<br />
	The history of allopathic medicine in Nepal is less than 100 years old. Medicine was used with the start of the modern medical system and during that time, pharmacy products were imported from different countries while such services were limited to only the big cities. The situation has changed now and we have many pharmaceutical companies established in our own country. Imported as well as home grown products are available even in the remote areas of the country today. However, it has not been smooth yet and the mishandling and misuse of drugs is a great threat. <br />
	<br />
	<strong><br />
	Counterfeit drugs is said to be one of the biggest challenges faced by the pharmaceutical industry. What is NCDA doing towards it? <br />
	</strong><br />
	<br />
	I agree with this statement to some extent. Basically, there are two reasons behind the availability of counterfeit drugs. The first one is that we share a open border with India and the second is that there are so many unregistered medical stores all over the country. The government monitoring system has not been effective enough. I don’t think that the NCDA member firms are involved in the supply of such medicines. The government should regulate these unregistered medical stores and bring them under the purview of the legal system. NCDA, on its part, is planning to release the list of registered medical stores and products available at these stores, on its website. It is always ready to support government initiatives to control the availability of counterfeit drugs. <br />
	<br />
	<br />
	<strong>Consumers often complain that the medicine prices vary from pharmacy to pharmacy. It is also said that the margin of profit is kept very high in pharmaceutical products. What do you have to say about such practices? <br />
	</strong><br />
	<br />
	I cannot agree with your statements. NCDA was established with the mission to supply qualitative, effective and safe drugs at affordable prices and we are always conscious regarding the uniformity of medicine prices. However, there may be some misuses from unregistered stores despite all our efforts and commitments. NCDA is committed to endorse the sale of medicines at their justified prices. However, if there are any complaints on account of price manipulation, please do inform to any of our NCDA branches so that we can regulate such pharmacies. <br />
	<br />
	<br />
	As for the margin of profit being high in pharmaceutical products, this is nothing but plain rumor. We are keeping the profit margin scientifically with the approval of the Nepal Government. <br />
	<br />
	<br />
	<strong>A great amount of medicines are sold on a daily basis without the doctors’ prescriptions. How risky is this for public health? <br />
	</strong><br />
	<br />
	This is a serious question that you have brought up. We all are quite aware about the health service standards in our country .We have a very limited numbers of doctors and that too, they are available only in the urban areas. Therefore, scores of villagers do not have access to services provided by doctors. This explains the situation of no prescriptions where there are no doctors. You have to acknowledge the fact that the patients have to get medicines anyway. Nowadays, the paramedics (HA, CMA &amp; ANM) are dispensing medicines in the remote areas. The government is not bothered about this problem and many serious health hazards occur due to the state’s apathy towards health services. <br />
	<br />
	<br />
	<strong>The shortage of general medicines in rural areas often inconveniences many families in Nepal. What’s your take on this? <br />
	</strong><br />
	<br />
	Although our business is a service business, there is a profit motive as well. The few pharmacy assistants and professionals that we have in the country confine themselves to the densely populated areas because they want to do good business. However, there are so many remote areas where there is no storage of general medicines but the problem is that the pharmacy dispensers are not available in such areas. I have also repeatedly drawn the attention of the concerned authorities to run orientation training targeting these areas so that the problem of dispensing medicines can be solved to a large extent. <br />
	<br />
	<br />
	<strong>How wealthy are we in terms of human resources especially in the production, marketing and distribution of pharmaceutical products? <br />
	</strong><br />
	<br />
	As far as the availability of human resources is concerned, let me assure you that many pharmacists and pharmacy assistants are produced every year. The number of pharmacy colleges is also increasing. Most of the pharmacists are employed in industries and academics whereas the pharmacy assistants are engaged in dispensaries. But the tragedy is they are not available in the remote areas. <br />
	<br />
	<br />
	<strong>The Nepali pharmaceutical industries asked the government to stop importing Indian drugs sometime ago. Can it be considered reasonable in a liberal market economy? <br />
	</strong><br />
	<br />
	Nepal is a small country in comparison to our neighbors and the market of any product is limited. It is not bad to promote indigenously produced medicines until our economy is competitive enough to export. Billions of rupees have been invested in the pharmaceutical industries. I think it’s the duty of the government to support these companies by whatever means possible. <br />
	<br />
	<br />
	<strong>What is the possibility for exports of Nepali drugs abroad? What are the challenges in this regard? <br />
	</strong><br />
	<br />
	I don’t see any possibility of Nepali medicines for export in the current context. Even though all the companies of Nepal follow the WHO GMP standard, different countries may have different technical standards. The private sector effort to export medicines may not be an effective one. The government initiation is the primary requisite and a must to realize export efforts. <br />
	<br />
	<br />
	<strong>COVER STORY <br />
	<br />
	<br />
	‘The Overall Quality of Nepali Medicines is at Par with International Standards’ <br />
	</strong><br />
	<br />
	<img alt="" border="1" height="330" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/RADHA-RAMAN-PRASAD.jpg" vspace="5" width="300" /><br />
	<br />
	<strong>RADHA RAMAN PRASAD <br />
	Director General <br />
	&amp; Chief Drug Administrator <br />
	Department of Drug Administration <br />
	</strong><br />
	<br />
	<br />
	<strong>How do you see the growth of Nepali pharmaceutical industry in recent times? <br />
	</strong><br />
	<br />
	New industries are entering into the market but most of them are producing ‘me too’ drugs. The competition is heightening among such kind of drugs. The trend of new industry registration shows that producers are willing to produce similar kind of products that already exist in the market. Such a trend is more common than producing vital drugs and competing with imported products which may help reduce imports and market share of imported drugs. Although new industries have taken industry establishment reference letter for producing large volume drugs, further progress is not seen in the actual establishment of industries. It is very important to produce large volume drugs with quality but little progress has been made towards it. Even though producers are promising to do it, it has not happened till date. <br />
	<br />
	<strong><br />
	New industries are being established every year. Do you see potential in them to make the country self sufficient in drugs and reduce imports? <br />
	</strong><br />
	<br />
	It is not that they do not have the capacity to produce to the extent of self sufficiency but it is limited to specific drugs. The environment for producing numerous drugs to the extent of self sufficiency has already been created but not for all medicines. Nepali companies have a market share of 43 per cent. If vaccines, contraceptives, ARV (Anti Retroviral), large volume drugs and few others are excluded, Nepali companies will have a bigger market share. Some companies have an almost equal market position as Indian companies. Ethical promotions and marketing strategies have helped them create a niche in those sectors. Nepali drug industries have their presence in almost every part of the country. <br />
	<br />
	<br />
	<strong>Around 60 per cent of the drugs market is covered by the foreign companies. How can the share of Nepali industries be increased? <br />
	</strong><br />
	<br />
	The consumers of medicines are mostly the prescriber groups. So, the confidence of the doctors and prescribers needs to be won with ethical marketing and by offering qualitative drugs. This will help to increase the market share. However, only over-the-counter sales and promotion through pharmacies cannot deliver good results compared to ethical promotions. <br />
	<br />
	<br />
	<strong>Although imported drugs are said to be expensive than locally produced ones, why aren’t Nepali medicines preferred by the prescribers? How can Nepali products be promoted? <br />
	</strong><br />
	<br />
	It is necessary to look minutely into actual pricing. Some local drugs may be cheaper but it is difficult to say that products from established brands are actually cheaper. Such products are priced similar to the imported drugs. Quality assurance is the most important factor for promoting Nepali industries. Numerous producers and their associations as well as the DDA have moved towards quality assurance through various measures like complying with the WHO GMP standards. All the stakeholders are moving ahead keeping in mind quality as their central motive. It is a matter of satisfaction that Nepali industries are committed to quality assurance and they too are producing international standard drugs. Even though few samples have been found lacking quality in the market due to some reasons, I think the overall quality of Nepali medicines is at par with international standards. Many industries are now shifting to new locations, upgrading their technologies and carrying out renovation of their production units. Once quality is promised to the consumers, the market share will definitely increase. <br />
	<br />
	<br />
	<strong>It is often said that substandard medicines are being imported and expired medicines sold in pharmacies. What is your take on this situation? <br />
	</strong><br />
	<br />
	At times, it’s not only the drugs imported from India but also the Nepali drugs that are found to be below standard. However, we cannot generalise the situation and say that all products lack quality. There have been cases like discovering some particles on tablets and solidified dry syrup but these are exceptions. We have not found the entire batch of a particular medicine failing in case of one or two samples that are found defective. If the temperature is not adjusted as per the requirement during storage, some medicines change colour naturally over time. A pharmaceutical company produces drugs which is transferred to distributors, then to retailers and finally to the consumers. If the quality is not assured in the supply chain, some complications may arise despite the producer maintaining optimum quality. The producers are slowly getting conscious about it and the DDA too is committed to move towards this direction. <br />
	<br />
	<br />
	Regarding the sales of expired drugs, it is very important to maintain a good pharmacy and dispensing practice. The pharmacy workers must properly look at the prescriptions and scrutinise the medicines before selling them and also give proper information to the buyers. When this system is not practiced, there is a chance of expired drugs getting sold. Substandard and expired drugs must be filtered at the time of sales. At present, there are inspections carried out by the Department of Commerce &amp; Supplies and District Administration Offices to detect sales of expired drugs. Such activities have definitely brought a lot of awareness among consumers and also controlled such incidences. <br />
	<br />
	<br />
	<strong>Counterfeit drugs is also said to be one of the biggest challenges faced by the industry. What is DDA doing towards it? <br />
	</strong><br />
	<br />
	We have not found counterfeit drugs as of now. It’s true that we have found some medicines that are not registered here but they are not counterfeit in the true sense of the term. Such unregistered drugs are confined to around four-five types which have high difference in their prices such as Ciprofloxacin, Omeprazole and some aphrodisiac drugs. We have been carrying out awareness campaigns asking customers to mandatorily take bill on the purchase of drugs which will prevent buying of unauthorised drugs. A conscious citizen must as for bill on purchase of medicines and also seek information about the medicines. <br />
	<br />
	<br />
	<strong>What is the level of competition of Nepali pharmaceutical companies among themselves as well as with the foreign companies? <br />
	</strong><br />
	<br />
	The competition has always been there but it should now focus on quality while competing with ‘me too’ drugs in the market. Earlier, cardiac medicines were not produced within Nepal but now we have them. We also did not have the doctors’ confidence about higher antibiotics but now they prefer Nepali products. These are definitely very good signs. We have been monitoring and conducting inspection of Nepali industries, overseeing their quality and standard etc so we encourage using Nepali drugs with confidence. This confidence has also led Nepali industries beginning to tap the foreign market in recent times. <br />
	<br />
	<br />
	<strong>Raw materials as well as finished drugs are being imported at present. Which one is beneficial for our market situation? <br />
	</strong><br />
	<br />
	The Nepali industries are compelled to import raw materials to produce drugs here because we are not API (Actual Pharmaceutical Ingredients) manufacturers. Therefore, it is necessary to import raw materials. In the current global context too, there is no base to deny import of any products. When the market is dictated by the Nepali industries, the foreign companies that cannot compete will automatically exit. <br />
	<br />
	<br />
	If Nepali companies can produce drugs here, the human resource can be rightly utilised. The availability of human resource is cheaper in Nepal than anywhere else. Qualified human resource is being produced within the country and at the same time, semiqualified human resource is equally available. We have a condition to import quality raw materials at competitive prices. It also creates employment not only in the production line but also in the marketing of products. The industries also pay taxes to the state so from that perspective, local industries must be promoted. <br />
	<br />
	<br />
	<strong>It is said that there is huge potential for export of medicines to India along with other markets. How much have we cashed in on this potential? <br />
	</strong><br />
	<br />
	That potential has not been adequately explored as of now. A few industries that have reached a certain level of success in the local market have started looking towards those markets. All the drug producers must collectively move towards this direction to explore the potential. <br />
	<br />
	<br />
	<strong>COVER STORY <br />
	<br />
	</strong><br />
	<strong>‘We have Gained Trust from the Consumers because of our Quality Products’ <br />
	<br />
	<br />
	<img alt="" border="1" height="214" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/MAHESH-GORKHALI.jpg" vspace="5" width="300" /><br />
	<br />
	MAHESH GORKHALI <br />
	President <br />
	Association of Pharmaceutical <br />
	Producers of Nepal (APPON) <br />
	</strong><br />
	<br />
	<br />
	<strong>How do you see the growth of Nepali pharmaceutical industry in recent times? What is the kind of investment required to establish a pharmaceutical industry at present? <br />
	</strong><br />
	<br />
	As per an estimate, we are growing at around 15 to 20 per cent annually. The cost of establishing a pharmaceutical industry in the country generally depends on the number of segments that the investors target to operate with. Pharmaceutical industries cover different segments like – tablets, capsules, liquids, injectables etc. If an industry tries to cover all these segments, high investment is required. At the same time, low investment can enable an industry to operate with a single segment. As per our calculation, anywhere from Rs 25 to 300 million investment is required for a company producing tablets, capsules and liquids depending upon the choice of the machinery equipments, building, location etc. Establishing an industry in city areas is usually costlier when compared to the terai or hilly region. <br />
	<br />
	<br />
	<strong>How is the production and export-import business of pharmaceutical products doing in Nepal? <br />
	</strong><br />
	<br />
	There are altogether 45 Nepali companies operating in our market. Investors generally produce materials which they can sell even if they have a high production. There is a wide variant of medicines available in the market and we are capable of producing some of these, for example, Paracitamol tablets which are popular as citamol in Nepali households. To meet the remaining demand, we import a good amount of medicines from India, Bangladesh and some other countries. The export potential of Nepali medicines has not been tapped as yet. Nepali pharmaceutical companies occupy around 40-45 per cent market share while the rest is of foreign companies. Our companies can increase their market share only if we could expand our businesses massively. If we do not want to be contended only in the national market, we must grow and focus on exports. <br />
	<br />
	<br />
	<strong>How favorable is the government’s policy regarding the pharmaceutical industry? <br />
	</strong><br />
	<br />
	We don’t find a clear-cut policy of government for the development of Nepali pharmaceutical industries. As such, the pharmaceutical market is rapidly growing internationally and we are obliged to introduce and produce newer medicines or molecules to survive in the market. Since we lack manpower in developing newer molecules, we try to import them as soon as they are developed. Department of Drug Administration (DDA) under the Ministry of Health regulates our companies but it usually hesitates to provide a license whenever we apply to import a new molecule. It says that the molecule is not mentioned in Pharmacopeia - a book where every medicine is featured. Actually, medicines are featured in Pharmacopeia sometime later after the invention. It’s the responsibility of the government to either perish or nourish the pharmaceutical sector as the citizens of this country have the right to have proper medications. By permitting to import newer molecules, providing incentives or soft loans and declaring tax holidays for some years will definitely create good environment for the pharmaceutical sector. The government must also act as a responsible body by addressing problems such as the shortage of powerhouse, in consultation with the stake holders. I think that the Ministry of Health has so many responsibilities and hence, they may not be able to look after the manufacturing industries properly. Nonetheless, I believe they will formulate some good policies in the near future to encourage new investors when they realize our potential as a growing industry. <br />
	<br />
	<br />
	<strong>What are the challenges of the Nepali pharmaceutical industry in meeting the demand of pharmaceutical products in the market? <br />
	</strong><br />
	<br />
	Around 250 companies are involved in importing medicines from other countries so the biggest challenge we have is the faith of the consumers on Nepali products. The pharmaceutical market normally grows with the increase in the prescriptions or the number of the prescribers. We have gained that kind of trust from our consumers because of the quality products we deliver. All the leading doctors and medical experts prescribe Nepal made products which means the main challenge is already taken care of. Another challenge is to introduce newer molecules. <br />
	<br />
	<br />
	We need some lab testing which are often tedious, time consuming and expensive. We need to maintain refresh standard for which we don’t have the facilities but that can be procured. Furthermore, we have to develop our human resources including the marketing professionals so we are conducting different trainings and workshops to improve their capabilities. <br />
	<br />
	<br />
	<strong>What is the benefit of importing pharmaceutical products from India? What kind of competition have domestic factories been facing with hundreds of Indian products and companies in the domestic market? <br />
	</strong><br />
	<br />
	While moving from illness to wellness in the case of human health especially, pharmaceutical products have proved to be one of the essential elements in curing diseases. However, we don’t produce all kinds of medicines. For instance, we don’t produce saline water which is considered as an urgent medication for many diseases. We import it mainly from India as medicines such as this are beneficial to human health. <br />
	<br />
	<br />
	Competition between companies is natural in every business and pharmaceutical industries are no exception. Competition with importing companies is ethical in our business. However, there seems to be a fierce competition between the Nepali companies because of similar medicinal products and limited customers. Everybody wants to promote his own brand and the more number of companies, the more number of brands are there. <br />
	<br />
	<br />
	<strong>Although imported drugs are expensive than locally produced ones, why aren’t Nepali medicines prescribed much? <br />
	</strong><br />
	<br />
	This is untrue as majority of the doctors are prescribing our medicines. This is the reason why we are having 40- 45 per cent market share despite having competition from so many foreign companies. There has been a good promotion of our medicines and the doctors prioritize them whenever they prescribe the medicines to the patients. <br />
	<br />
	<br />
	<strong>How wealthy are we in terms of human resources especially in the production, marketing and distribution of pharmaceutical products? <br />
	</strong><br />
	<br />
	Initially, we had a real problem with human resource be it the marketing or production areas. It was very hard to train young graduates especially those without a science background. Thus the promotion of the products used to be a difficult task in the past. <br />
	<br />
	<br />
	In production also, there were not enough graduates who could earlier meet our criteria. However, there are 17 - 18 colleges now with pharmacy as a major subject. They are producing a good number of bachelors every year that can be utilized in pharmaceutical industries. We don’t have scarcity of such manpower now. <br />
	<br />
	<br />
	However, we don’t have quality manpower who could import newer molecules from foreign countries. Good companies have been providing trainings for their employees and sending them to different countries like Japan, Bangladesh and India for their capacity enhancement. They are improving and we hope that we will produce the required manpower for this sector as well. <br />
	<br />
	<br />
	<strong>It is said that the margin of profit is kept very high in pharmaceutical products. What do you have to say about that? <br />
	</strong><br />
	<br />
	Even though it seems so, it is not true. Actually, certain products have really high margins mainly because of the high expenses involved in their production. To produce a single medicine, we import different raw materials including chemicals and packaging materials. Besides, producing quality medicine is a very lengthy and time consuming process. There are other costs involved too which make medicines more expensive, for example, the marketing aspect. Whatever is the margin, the fact is that the product must be sold because without the sale of a product, there can be no profit. <br />
	<br />
	<br />
	<strong>It is said that there is a huge potential for export of medicines to India along with other markets. How much have we cashed in on this potential? <br />
	</strong><br />
	<br />
	Let me give you an example when my company used to export medicines in India a few years ago. We had applied to the Indian authorities for exporting medicines to which they agreed and we started to send our medicines. However, despite having all the certification and documents of our products, they would put our stock in their quarantine office once it reached Raxaul in India. They would say that approval can be provided only after some lab testing but by the time they did so, it would be already six months late. Another three months would be spent for lab testing so it’s only after nine months that we would be able to get the approval to supply our medicines in the Indian market. The same process would apply for each consignment. After all this, the Indian retailers would not agree to keep medicines having less than six months of validity. It continued for two years and we had a business of Rs 50-60 million only. After two years, we could not undergo the criteria once they applied a new system for Nepali companies. It became costlier and that is when we stopped exporting our products. However, we are again targeting India for the expansion of our products and hopefully, we will be successful in our endeavour. <br />
	<br />
	<br />
	<strong>Raw materials as well as finished products are being imported at present. Is it beneficial for our market? <br />
	</strong><br />
	<br />
	Yes, it is. We cannot produce medicines without raw materials and finished products since we don’t have the big plants to produce chemical and other essential materials. We don’t need to produce raw materials ourselves because of the limited market we have. Unless we expand our market, we can continue to import these items. <br />
	<br />
	<br />
	<strong>COVER STORY <br />
	</strong><br />
	<br />
	<strong>‘Maintaining GMP and GLP Standards will give Credibility to our Products Internationally’ <br />
	<br />
	<br />
	<img alt="" border="1" height="204" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/MOHAN-PRASAD-AMATYA.jpg" vspace="5" width="300" /><br />
	<br />
	MOHAN PRASAD AMATYA <br />
	Chief <br />
	National Medicine Laboratory <br />
	<br />
	<br />
	</strong><br />
	<strong>What is the major function of the National Medicine Laboratory? <br />
	</strong><br />
	<br />
	Our main objective is to ensure that safe and effective medicines are available in the Nepali drug market. Though it is the Department of Drug Administration (DDA) that awards license to pharmaceutical factories, it is our responsibility to test and evaluate the standard of their laboratories and drugs and refer them for the registration. Factories should obtain market license for each of their products. We develop Reference Standard and make it available to the pharmaceutical companies and laboratories. We also inspect retail and wholesale pharmacies to check the quality of drugs. The price monitoring of the marketed drugs is within our scope of work and we deploy drug inspectors for this task. They visit the market on a regular basis, purchase drugs from the pharmacies and bring it to us. We inspect quality, composition, packaging and every other detail of these drugs. If such drugs are found below the standard, we report it to the DDA which recalls these products from the market. Similarly, we visit laboratories and inspect products of foreign countries before importing them to Nepal. <br />
	<br />
	<br />
	<strong>Pharmaceutical companies also have their own laboratories. How good are they? <br />
	</strong><br />
	<br />
	A pharmaceutical company must set up its own laboratory. We visit their laboratories and conduct a thorough inspection. Aspects like hygiene of the lab and precautions taken for the safety of its manpower, availability of equipments and trained manpower, location of the lab and its space, structure of the building, availability of water and other resources are taken into account while giving approval to the laboratories for production. We visit them regularly even after the approval Therefore, we must say that existing labs have been maintaining the required standard. Of course, there is a lot of scope for improvement and it’s a continuous process. All in all, they are good. <br />
	<br />
	<br />
	<strong>Out of 49 pharmaceutical factories operating in Nepal, only 26 have been producing pharmaceutical products under the World Health Organisation’s (WHO) Good Manufacturing Practice (GMP). Why is this number so low? <br />
	</strong><br />
	<br />
	It’s been about 8 years that Nepal became a member of the WTO. However, our pharmaceutical companies were established long before we got associated with the WTO. At that time, our aim was to encourage people to invest in the pharmaceutical sector so that the country can gradually substitute imported medicines. The procedure to obtain operating licenses was not that strict. Now that the country has entered an agreement with the WHO to maintain its GMP standard, we could not ask them to upgrade their laboratories and manufacturing units overnight. It requires huge capital for a company to be at par with the international GMP standard. The DDA has been asking the existing factories to upgrade themselves time and again by allowing a certain time-frame to them. In fact, the DDA has directed all existing pharmaceutical companies to upgrade themselves by the end of this year. Because of this provision, many companies have applied for GMP and few of them have already received the certification. However, there are still some companies that have not applied for this process. I believe the DDA will take adequate measures against such factories in the future. <br />
	<br />
	<br />
	<strong>Have all the pharmaceutical companies been maintaining Good Laboratory Practices (GLP)? <br />
	</strong><br />
	<br />
	It is very essential to maintain GLP to establish a pharmaceutical industry. Companies that do not maintain GLP are not allowed to begin production. Before any pharmaceutical product is produced, we check whether the laboratory has used standard raw material and put the lab in the suitable location and purchased good quality machines or not. When the product is made, we analyse its composition, packaging, punching, amount of active drug in the medicine and its storage. These aspects fall under GLP and we make sure that factories are up to the mark on each of these aspects before granting it permission to operate. To make our existing factories concerned about GLP, we conduct trainings on this aspect regularly. <br />
	<br />
	<br />
	<strong>What special benefits will we have by producing pharmaceutical products in line with the WHO’s GMP and GLP guidelines? <br />
	</strong><br />
	<br />
	Maintaining GMP and GLP standards will give credibility to our drugs in the international market. It will eventually pave way for the export of our products. Though there are only 26 pharmaceutical manufacturing companies that have been producing products maintaining GMP standard, about five companies are in the process to get the certification. We will be visiting their manufacturing plants and the laboratories to refer for the certification. <br />
	<br />
	<br />
	<strong>So, we do have an opportunity to export our products. <br />
	</strong><br />
	<br />
	Export is not just limited to quality of the drug. Every country has a specific policy about importing drugs from another country. If our country can fulfil those clauses, we won’t have problem in exporting our products. Even India that has been exporting its products to almost all corners of the world, is willing to import drugs from us. But it has set some clauses regarding drugs import. If we can fulfil these clauses, India can be a potential market for our medicines. Therefore, export is more related to the policy of a specific country. Some of our companies are trying to export drugs to Singapore and Malaysia as well. We are very rich in resources for pharmaceutical products. All we need is skilled manpower and the technology. Provided these aspects, we have huge potential for export. <br />
	<br />
	<br />
	<strong>What sort of drugs are we strong in and where do we still need to do research? <br />
	</strong><br />
	<br />
	The domestic production has been able to fulfil 60 per cent of the current demand. For the remaining 40 per cent, we have to be dependent on imports. We are strong in therapeutic drugs but we still have to be dependent on imports for injectable drugs and biological products. It takes a huge capital and expert manpower to produce such drugs. The labs need to be sterilised and made aseptic to produce these medicines. Even the building has to be designed in a specialised way for such drugs. There are only two or three companies that have been producing biological products. Most of the demand for injectable and biological drugs is fulfilled through imports. <br />
	<br />
	<br />
	<strong>What is the status of human resource in the pharmaceutical sector? <br />
	</strong><br />
	<br />
	In the last few years, pharmaceutical sector has been witnessing a growth in the quantity of trained manpower. The existing four universities of our country have been producing manpower for this sector. Kathmandu University (KU) has been operating classes of pharmacy at the Bachelor, Masters and the Doctorate levels. Tribhuvan University (TU) also runs a bachelor level programme while Purbanchal Univeristy (PU) has given affiliation to about 19 colleges to operate pharmacy classes. Similarly, Pokhara University also has a Bachelor of Pharmacy programme. So, around 500 students graduate in this sector annually. <br />
	<br />
	<br />
	<strong>Where do these graduates get job placement? <br />
	</strong><br />
	<br />
	A large number of students with Bachelor degree in pharmacy open their own pharmacies while some others work in pharmaceutical factories, laboratories and hospitals. A few of them pursue a teaching career but most graduates from the Institute of Medicine (IOM) and Kathmandu University go abroad in search of greener pastures. The flow of application for establishing pharmaceutical factories was high a few years back but the present political situation has been a hindrance in establishing new factories. Therefore, the graduates find the overseas market better for greater exposure. If the country could emerge from the present political turmoil, they too can find employment opportunities in their own country. <br />
	<br />
	<br />
	 </p>',
			'published' => true,
			'created' => '2012-08-15',
			'modified' => '2012-10-10',
			'keywords' => '',
			'description' => 'Nepal’s pharmaceutical expense is at par with other South Asian countries, thanks to the increase in the number of pharmaceutical companies and their production. In 2008, the total per capita pharmaceutical expenses was US$ 6.96 while the total amount of pharmaceutical expenses stood at Rs 13.09 billion in Nepal',
			'sortorder' => '558',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 12 => array(
		'Article' => array(
			'id' => '650',
			'article_category_id' => '40',
			'title' => 'Open Skies Of Nepal',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	<strong>By Pinaki Roy <br />
	<br />
	</strong><br />
	<img alt="coverstory july" border="1" height="217" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/coverstory(1).jpg" vspace="5" width="400" /><br />
	<br />
	<br />
	The flow of international passengers in the first quarter of 2012 has been impressive enough to raise optimism among the concerned stakeholders. The statistics between January and March 2012 is an indication that international air service and passenger movement to and from Nepal is set to register a significant increase this year compared to 2011. A total of 717,182 international passengers (see table) availed air services via Tribhuvan International Airport (TIA) – the only international airport of Nepal – in the first three months of 2012, says Raj Bahadur Maharjan, Director at TIA’s Flight Approval Department. <br />
	<br />
	<br />
	There has been an increase of 84,459 passengers when compared to the first quarter of 2011, thereby registering a growth of 13.35 per cent over the same period of the previous year. Monetarily speaking, the total annual international flight service business in Nepal is worth an estiamted Rs 80 billion. <br />
	<br />
	<br />
	Ratish Chandra Lal Suman, General Manager at TIA, says, “The number of passengers has increased in the first quarter of this year also because of new airlines coming into operation and providing added air services.” He attributes the increment both to the increase in inbound tourists and the outbound migrant workers to different countries. Even though GMG Airlines towards the end of 2011 and Kingfisher Airlines in February 2012 ceased to operate in Nepal, their absence was promptly compensated by Indigo (October 2011) and RAK Airways (February 2012). <br />
	<br />
	<br />
	The number of flights that served these passengers was 5,693 (up by 9.69 per cent from 5,190 flights during the same period last year). While 2,846 flights made outbound journeys, the number of flights that landed at the TIA stood at 2,847. A total of 368,934 passengers flew out of Nepal while another 348,248 landed in the country from January to March this year, a growth of 11.48 per cent and 15.40 per cent respectively when compared to the same period of 2011. In the first quarter of the previous year, 330,954 passengers took outbound flights while another 301,769 passengers entered Nepal via inbound flights making a total of 632,723 passengers who availed international air services from January to March 2011. <br />
	<br />
	<br />
	This growth is certainly encouraging coming at a time when the International Air Transport Association (IATA) left this year’s global airline profit forecast unchanged at $3 billion, or 0.5 per cent of industry revenues. At a summit of airline chiefs being held this year in Beijing, this stable outlook masks a widening gap between regions with “only North and South America set to improve and the rest of the world seeing reduced profitability.” <br />
	<br />
	<br />
	<strong>The Year Gone By <br />
	</strong><br />
	<br />
	International air passengers flying via the Nepali sky crossed 2.7 million for the first time in 2011. These passengers travelled via Nepal with 28 international airlines operating in Nepal last year, according to Maharjan. He said that additional airlines such as IndiGo, added frequency of flights and passenger occupancy increased the number of air passengers using the Nepali route. The year 2011 saw 2.7 million international passengers flying out and landing in the country on board 22,791 flights. A total of 28 airlines flew 2,700,027 passengers (see table) for the year, says Maharjan. This was an increase of 10.81 per cent in comparison to 2010 when 2,436,558 passengers availed international air services in Nepal. <br />
	<br />
	<br />
	While 1,407,512 passengers flew out of the country, the passengers entering the country numbered 1,292,515. A total of 11,393 flights departed while 11,398 flights entered Nepal during the period making a total of 22,791 flights for the year. The only new airline that started operations in 2011 was Indigo. Qatar Airways carried the most number of passengers – 277,796 on 2,374 flights while Jet Airways was second with 272,560 passengers on 2,191 flights. Nepal Airlines Corporation was third with 202,041 passengers on 1,619 flights. <br />
	<br />
	<strong><br />
	Migrant Worker: The Main Market </strong><br />
	<br />
	<br />
	With more Nepalis departing for jobs abroad and increase in tourist movement, international airlines operating in Nepal have witnessed this rise in passenger movement in recent times. The airline companies claim that they are equally focusing on all the segments, which include business travellers, tourist, VFR (visiting-friends and relatives) and workers. However, it’s no secret that migrant workers comprise around 80 percent of the total passengers availing international air services in Nepal. Most of the international airlines flying to and from Nepal are more focused on manpower markets rather than the tourism markets. Of the total international flights, the airliners carry only 20 per cent tourists, observe industry analysts. <br />
	<br />
	<br />
	<strong>Contribution to Tourism </strong><br />
	<br />
	<br />
	International carriers from India accounted for the largest share of inbound tourism in Nepal in the previous year. According to TIA, Indian carriers flew around 48 per cent of all tourists visiting Nepal in 2011 – dubbed as Nepal Tourism Year (NTY). Indian travellers alone grew by 39 percent to 145,338 in 2011, a 26.67 percent share in total tourist arrivals to Nepal. As per TIA statistics, five Indian airlines—Spice Jet, Jet Airways, Air India, Jet Lite and Kingfisher—figured among the top 10 carriers bringing tourists to Nepal. The total tourist arrivals via air numbered 544,985 in 2011 that entered Nepal on board 28 international airlines. <br />
	<br />
	<br />
	Indian budget airline Spice Jet – that started flying to Nepal in October 2010 – was the largest carrier of tourists into Nepal in 2011, accounting for 15.28 percent of the arrivals. Jet Airways and Air India were the second and third largest tourist carriers respectively accounting for 12 percent and 8 percent tourist arrivals. Two legacy carriers—Thai Airways and Qatar Airways—fell in the inbound tourism rankings in 2011. While Thai’s market share shrunk to 8 percent from 11 percent in the previous year, the share of Qatar Airways slipped to 7 percent. Etihad Airways and Gulf Air, two more carriers from the Middle East, lost their slots in the top 10 list in 2011. <br />
	<br />
	<br />
	The healthy growth of Indian tourists to Nepal attracted yet another Indian private airliner Indigo Airlines that started New Delhi-Kathmandu flights in October last year making it the sixth Indian private airliner flying between Nepal and India. Currently, Air India, Jet Airways, Jet Lite, Spice Jet and Indigo fly around 130 flights a week between Kathmandu and various Indian destinations while Kingfisher Airlines has stopped flying to Nepal for the last few months. Needless to say, the increase in the number of Indian airliners flying to Kathmandu has encouraged the aviation sector in Nepal immensely and boosted the country’s tourism prospects. A total of 207,961 tourists entered Nepal via air in the first four months of 2012, a growth of 23.1 per cent over the same period last year. A total of 168,958 tourists had entered Nepal from January to April in 2011. <br />
	<br />
	<br />
	<strong>Direct Flights <br />
	</strong><br />
	<br />
	Broadly, any business or industry can be categorised either as monopoly or market-oriented. Due to the inherent nature of international air transport industry, every country enjoys certain exclusive rights, which indirectly helps them monopolise some air routes. This right, if exercised, could be of tremendous benefit to a country like Nepal. “Direct flights between Nepal and other countries can play a key role in bringing increased number of tourists into our country,” an industry insider opines. <br />
	<br />
	<br />
	For instance, none of the 27 airlines flying into Nepal have the right to operate direct long distance flights between Nepal and lucrative destinations like Europe, Japan and Australia. They can operate only connecting flights whereas Nepal gets the sole privilege of operating direct international flights from the country. As foreign travellers have no choice of direct air connectivity, air travel costs become higher while coming to Nepal. Mihin Lanka, a Sri Lanka-based airline has expressed its interest to operate direct flights between Colombo and Kathmandu. This was conveyed to Prime Minister Baburam Bhattarai by Lankan President Mahinda Rajapaksa on the sidelines of the recently concluded environmental summit in Rio de Janeiro, Brazil. Air Service Agreement (ASA) between Nepal and Sri Lanka allows Sri Lanka-based airlines to operate up to 14 flights a week in the Colombo-Kathmandu-Colombo sector. <br />
	<br />
	<br />
	<strong>State of the National Carrier </strong><br />
	<br />
	<br />
	The status of the national carrier – Nepal Airlines Corporation (NAC) – in terms of international flight operations is disappointing to say the least. Around 95 percent of the international aviation market in Nepal is in the hands of foreign air operators. “Our market share is worth less than Rs 4 billion out of the international flight service business of Rs 80 billion annually,” says NAC Spokesperson Saroj Kasaju. The market share of NAC shrank to an all-time low in 2011 in terms of tourist carriage. The national flag carrier held the 10th position with a mere 3.05 percent while it had a market share of 4.87 percent in 2010. The eroding market share of NAC, according to travel trade entrepreneurs, is due to its inability to expand its fleet while the fact remains that the prerequisite for business expansion in airline industry is acquisition of aircraft, especially for operation in the lucrative international sector. In 2001, NAC was a leading carrier accounting for 28 percent of inbound tourists. <br />
	<br />
	<br />
	With more international airlines entering the Nepali skies and NAC’s track record of flight delays, travel agencies say the national flag carrier has become the last choice among visitors. Currently, NAC operates its international flights with two ageing Boeing 757s, either one of which is usually offline due to technical glitches and periodic C-checks. The carrier now flies to only five international sectors – Dubai, Doha, Bangkok, Kuala Lumpur and Hong Kong – down from 21 destinations in 12 countries with four Boeings till 1993. The airline now plans to start flights to Damam in Saudi Arabia. It also plans to start flying to Kuala Lumpur seven-days-aweek besides launching direct flights to Doha, Qatar. <br />
	<br />
	<br />
	The corporation currently spends Rs 1.39 billion on repairs alone for the two planes – Boeing 757-9N ACA Karnali and ACB Gandaki – which it has in its ‘fleet’ right now, says Kasaju. “Out of the estimated income of Rs 4.52 billion from international flights in the current fiscal year, 23 per cent of the total amount has gone into the repairs of the two Boeings,” he adds. The cost of repairs has gone up considerably in the last five years due to the fast ageing of the two Boeings. This expense is several times more than what the private carriers spend on repairs and maintenance which is six to 10 per cent of their earnings from flights. <br />
	<br />
	<br />
	A strong and competitive national flag carrier can serve as a key vehicle of the country’s economic and tourism development. Kasaju says, “NAC has become a factory without machines due to lack of aircraft but hasn’t gone in loss yet.” He cautions though that the corporation can land in major financial trouble if aircraft is still not added to its fleet. <br />
	<br />
	<br />
	However, all is not lost as Kasaju reiterates that the corporation is still making profit thanks mainly to its ground handling business. The corporation provides such service to 23 foreign airlines that fly to Nepal. From a domestic perspective, the corporation is expected to get five units of 19-seater aircraft and three units of 56-seater aircraft from China on grants and concessional loan. The airline management is scared of an imminent demise of the company as its current basis of survival – ground handling business – is in jeopardy due to a move by the Civil Aviation Authority of Nepal (CAAN) to possibly involve the private sector and allow competition. <br />
	<br />
	<strong><br />
	Ground Handling Services at TIA </strong><br />
	<br />
	<br />
	CAAN is currently holding discussions with other government agencies and stakeholders to allow the private sector to operate ground handling services at the TIA. It informed that it may soon allow private firms to operate ground handling services during the night time. Currently, NAC that provides ground handling services to almost all international airlines currently earns Rs 2 billion a year of which 10 percent is paid to CAAN as royalty. CAAN says that many international airlines and customers have complained about NAC’s ground support service. The complaints are mainly two: thefts and tampering with passengers’ luggage and higher ground handling charges of NAC in comparison with other international airports in the region. It is hopeful that the introduction of a private firm will enhance quality and manage congestion at TIA. “The Civil Aviation Authority Act 1996 and National Civil Aviation Policy 2063 state that the ground handling service should be competitive. Besides, the agreement with the corporation also does not restrict CAAN from appointing a private firm to manage ground handling services,” says Suman. He adds, “Due to NAC’s monopoly, the ground handling charges in our country are the most expensive in this region.” <br />
	<br />
	<br />
	The addition of one more ground handling service provider is expected to bring in competition and end the monopoly thereby resulting in quality service at lower service charge, adds Suman. TIA currently has the capacity to serve 8.2 million passengers a year and can serve up to 1,350 international passengers on an hourly basis. “We have not been able to serve to our total potential due to organisational inefficiencies. The number of flights out of TIA is less than half the capacity that we can accommodate,” Suman says. Meanwhile, NAC officials deny the charges and claim that the incidents of baggage theft and breakdown are minimized to internationally acceptable level. They also allege that some of these complaints are actually due to the fault of CAAN and other government agencies involved in the business such as the immigration department. According to them, some problems are due to lack of adequate infrastructure such as insufficient apron space for parking the craft which are forced to wait in the taxiway for long periods. Besides, inadequate number of boarding gates cause delays in boarding and confuse passengers on the correct conveyer belts to deliver the luggage are frequently out of order while the luggage weighing machines are not repaired on time. Insufficient number of toilets and chairs in the passenger waiting area add to passenger woes further. <br />
	<br />
	<br />
	The NAC management says that it’s not only the ground handling services that are expensive in Kathmandu. It gives examples of the fuel price and the charges that CAAN levies on account of aircraft landing, parking and navigation. The charges for CUTE used for passenger check-in too are high in Nepal than elsewhere, argue NAC executives. They point that the ground handling services in many other countries such as Thailand, UAE, Qatar, Malaysia and Hong Kong are provided by their national flag carriers either on their own or through subsidiaries. In Thailand, even the flight catering service is provided by the party that is recommended by Thai Airways, they say. <br />
	<br />
	<strong><br />
	Trans-Himalaya 2 Airspace <br />
	</strong><br />
	<br />
	Considering the increased air traffic at the TIA, CAAN is planning to operate the international airport 24 hours a day. This is expected to help in managing the increasing air traffic. Besides, it is also seeking an alternative location nearby Kathmandu for shifting the domestic airport from TIA to address the congestion. Likewise, it is also going to extend the domestic terminal building and make a separate car parking area for arriving passengers. <br />
	<br />
	<br />
	Nepal plans to ask India for the development of Trans-Himalaya 2 airspace (Hong Kong-Kunming- Guwahati-Kathmandu) connecting Southeast Asia, the Middle East and Europe in view of the increasing air traffic demand in Nepal. The route is one of the most lucrative routes for Nepal and if opened, it will be the shortest way from China and the Far East to the Middle East and Europe. The air distance from Kathmandu to Hong Kong will also be reduced. Implementation of this airspace will allow international airlines to fly over Nepali airspace, which means savings in fuel and distance for carriers flying this route and revenue for Nepal. “The airspace was discussed during Prime Minister Baburam Bhattarai’s visit to Delhi,” says Suresh Acharya, Joint Secretary at the Ministry of Culture, Tourism and Civil Aviation (MoTCA). According to him, India is positive about opening the proposed route. He adds that separate discussions need to be held with the Chinese government with regard to permission from the Chinese side for the opening of Trans-Himalaya 2 airspace. The opening of this proposed air route will have hundreds of international airlines use Nepali airspace and help the country to develop as a hub. CAAN officials add that the proposed route would be the shortest and could establish Nepal as an international transit point and result in enhanced air revenue for the country. The second international airport that the government has planned to construct in Nijgadh of Bara would be the greatest beneficiary in the event this air route comes into operation. Similarly, for aircraft entering Nepal’s air space, CAAN proposes Biratnagar (in the eastern region), Bhairahawa (in the western region) and Nepalgunj (in the mid-western region) as the three crossborder airspaces. Currently, Nepal has three incoming air routes—Simara, Kakkarbhitta from Paro in Bhutan and the Nonim air route from China. The Kathmandu-Mahendranagar-Delhi (L626) is the outgoing air route for international flights. Nepal is seeking new airspaces to ease traffic congestion, enhance information transmission, traffic regulations, emergency recovery of aircraft during accidents and automatic message switching system in its aviation sector. <br />
	<br />
	<br />
	The proposed route is more direct, safer, economical and efficient for flights between Europe, the Middle East and East Asia. These routes will reduce the congestion of westbound traffic flows across the Bay of Bengal. Experts claim that access to this international air space would give Nepal a huge opportunity to develop as a hub like India, the Maldives, Pakistan and Sri Lanka in South Asia. Maximum coverage of Nepal’s air space on long distance international flights via this proposed route could bring great benefits to the country if brought into operation <br />
	<br />
	<strong><br />
	The Way Forward </strong><br />
	<br />
	<br />
	As per the estimates of the International Civil Aviation Organisation (ICAO), an investment of US$ 100 in the air transport industry produces benefits worth US$ 325 for the economy, and 100 additional jobs in the air transport sector results in 610 new jobs across the wider economy. It further suggests that the air transport component of civil aviation accounts for more than 4.5 percent of the global GDP. As for the numbers, three carriers – AirAsia X, Malaysia Airlines and BB Airways – start operations in 2012. AirAsia X has already started operations while Malaysia Airlines and BB Airways are planning to operate international flights from September this year. It’s courtesy the competition among airlines on Kathmandu-Kuala Lumpur route as these three carriers unveiled plans to operate on the sector. The growing movement of Nepali migrant workers to and from Malaysia is one of the reasons luring airlines to fly on this sector. Statistics released by the Department of Foreign Employment shows that an average of 350 Nepali workers left for the Malaysian capital on a daily basis in the last fiscal year. While Malaysia Airlines is the national carrier of Malaysia, AirAsia X is a Malaysia-based budget carrier. ASA between Nepal and Malaysia allows Malaysian carriers to operate up to 21 flights a week. On the other hand, BB Airways is an upcoming local carrier promoted by TBI Group of Non Resident Nepalis (NRNs) in Japan which has already unveiled plans to operate scheduled flights on seven international routes including Kuala Lumpur. <br />
	<br />
	<br />
	There is an unlimited potentiality of the development of tourism and civil aviation sectors in the country. A well-equipped fullfledged international airport – where long-haul flights from Europe and America could directly land and take off – is needed for the development of the aviation and tourism sectors. In this context, a proposed fullfledged airport at Nijgadh can be an international hub for air transit and contribute substantially to the overall economy of Nepal. Nepal Investment Board (NIB) has already taken the initiative on projects related to the upgradation of TIA, and construction of a new airport in Nijgadh. It is estimated that the TIA upgrade will cost Rs 52.80 billion while the construction of the new airport in Nijgadh will cost Rs 45 billion. <br />
	<br />
	<br />
	<br />
	<br />
	<br />
	<strong>‘Gulf Air Provides Excellent Connectivity to a Large Number of Nepali Workers’ <br />
	<br />
	<br />
	<br />
	<img alt="" src="http://www.abhiyan.com.np/images/uploaded/renji-kurian-th_1343383001.jpg" /><br />
	<br />
	RENJI KURIAN THOMAS </strong> <strong><br />
	Country Manager <br />
	Gulf Air <br />
	<br />
	</strong> <br />
	<br />
	<strong>Can you share the rate of increase in passengers flying to and from Nepal over the years? <br />
	</strong> <br />
	There has been a steady growth of passengers over the years. As one of the major international airlines operating in Kathmandu, we have seen nearly a 20 per cent increase in the number of passengers in the first quarter of the year 2012. The latest report of Tribhuvan International Airport (TIA) also has our airlines figuring among the top four international airlines that have seen the strongest growth in passengers’ movement. Having started our operation in July 1998, we are now operating 12 flights between Bahrain and Kathmandu weekly. <br />
	<br />
	<br />
	<strong>How do you assess the quality of air service infrastructure in Nepal? <br />
	</strong> <br />
	The quality of air service is very good as the airport takes care of landings and take-offs for as many as 27 international airlines. However, there is always a scope for improvement with the increase in tourism traffic in Nepal. The airport has been working to improve its facilities further as such. <br />
	<br />
	<br />
	<strong>How has been the demand on the number of flights over the years? How are you managing the supply to meet the demand? <br />
	</strong> <br />
	The demand on this route is increasing steadily. By increasing our frequencies as well as operating large aircrafts periodically, we manage to accommodate more passengers. Gulf Air provides excellent connectivity to a large number of Nepali workers in the gulf region, particularly Saudi Arabia. We operate larger aircrafts as per the situation, especially when the demand is high. <br />
	<br />
	<br />
	<strong>What are your unique selling propositions? How aggressively are you marketing them? <br />
	</strong> <br />
	We have got the biggest network in the gulf region and several USPs to our credit. One of them is our schedule with excellent connectivity, for example, our split schedule of flights between Bahrain and Kathmandu offers very good travel options as it allows travelers to choose their own flight timings. In addition, Gulf Air’s seamless connectivity to Europe and the Far East via the Bahrain hub is an ideal choice for European customers travelling to Nepal or the Far East. Moreover, we are currently operating one of the youngest fleet with an average age of 5.2 years. This A320 fleet which operates between Bahrain and Kathmandu, offers ergonomically designed seats for travelers with maximum comfort, full flatbed seats on Falcon Gold class and the latest in-flight entertainment. <br />
	<br />
	Internationally, we are the first airline in the world to offer ‘Sky Hub’ that offers hi-speed broadband internet, mobile phone connectivity, live TV telecast, popular entertainment programs, sports channels and an array of movies, music and games. In addition to that, Gulf Air’s unique Sky Nanny and Sky Chef Services have received positive feedback from the customers. These services have helped us win the best ‘family friendly airline’ from US-based publications and the ‘best cabin crew’ award ranking from an IATA survey. <br />
	<br />
	<br />
	<strong>Airlines flying to Nepal are said to have very few business class seats. Is it true that airlines do not see prospects for business class market here? <br />
	</strong> <br />
	The aircrafts that we fly to Kathmandu are the same as the ones that fly on our other routes. We use a combination of narrow and wide body aircraft for flights to Kathmandu, depending on the traffic. We agree that the potentiality of business class market is not high in Nepal when compared to other regions. However, we offer 16 Falcon Gold Business class seats on our A320 fleet which has a configuration of 136 seats in total. The gold business class has full flat seats and several modern features for those who prefer stylish and luxurious travel. <br />
	<br />
	<br />
	<strong> What are your expansion plans? <br />
	</strong> <br />
	We do continuously look at the number of the passengers and market demands and decide accordingly. As said earlier, we have increased our frequencies and are also periodically operating larger aircraft to meet the seasonal and expanding market. <br />
	<br />
	<br />
	<strong>Most of the flights made to Nepal are targeting migrant workers. How sustainable is this policy? <br />
	</strong> <br />
	As mentioned in the TIA report, increased labor traffic accounts for around 80 percent of seat demand in all international airlines. All international carriers connecting to Nepal saw a robust increase due to this reason. We cater both to migrant workers and tourists. However, the majority of our traffic to Kathmandu is the migrant workforce working in the gulf countries. We foresee this trend to continue for some time to come. <br />
	<br />
	<br />
	<strong>What are your operational difficulties and facilities in Nepal? <br />
	</strong> <br />
	There are no operational difficulties except the weather of course. As you know, we are sometimes forced to divert our flights to nearby Indian airports due to unfavorable weather conditions such as dense, fog etc especially during winter. However, with our split schedule flights, we have better timings for landing in Kathmandu. <br />
	<br />
	<br />
	<strong>How are you managing your ground handling staff and crew members? <br />
	</strong> <br />
	We have Nepali speaking cabin crew in our team, who are deployed on the Kathmandu route most of the time so that our Nepali customers could feel at home. Almost all our staffs at the airport and city office are Nepalis. <br />
	<br />
	<br />
	<strong>How do you see the prospects of Nepal’s tourism sector? How is your airline contributing to it? <br />
	</strong> <br />
	Tourism is one of the main industries in Nepal. The Nepal Tourism Year 2011 was quite successful. Through International air passenger movement, Nepal grew 13.35 percent in the first three months of 2012 with high migrant workers and tourist traffic. Kathmandu is one of the major tourist destinations with thousands of foreigners visiting the country for a variety of reasons. <br />
	<br />
	The tourism sector is bound to expand as more and more people opt for unique and affordable destinations such as Nepal. We are able to connect more passengers than others to travel to Kathmandu via our Bahrain hub. The tourism campaigns or promotions by Nepali tourism authorities in the gulf countries can further help an increment in the tourist traffic to Nepal. I am proud to say that Gulf Air too has a role to play in the tourism development of Nepal as we cater to a large number of European tourists who find it convenient to fly with us. <br />
	<br />
	<br />
	<br />
	<strong>‘An International Airport at Nijgadh can help Establish Nepal as a Transit Hub’ <br />
	<br />
	<br />
	<br />
	<img alt="" src="http://www.abhiyan.com.np/images/uploaded/tri-ratna-manan_1343383130.jpg" /><br />
	<br />
	TRI RATNA MANANDHAR </strong> <strong><br />
	Director General <br />
	Civil Aviation Authority of Nepal (CAAN) <br />
	</strong> <br />
	<br />
	<strong><br />
	What is the current scenario of International flights operating in Nepal? </strong><br />
	<br />
	Earlier, we had altogether 28 operators conducting international flights. Among them, three operators namely GMG Airlines, Kingfisher Airlines and Bahrain Air postponed their flights. Simultaneously, three other operators namely BB Airways – a Nepali airliner – along with two airliners from Malaysia, Air Asia X and Malaysian national carrier Malaysia Airlines were included. Air Asia X is operating from July 3 while BB Airlines is to commence from September this year. That is to say, some airlines are withdrawing their flights while some others are commencing their operations soon. However, the numbers of operators are back to 28 as it was before. There are 33 other airlines waiting in the wings with their air service agreements (ASAs). <br />
	<br />
	<br />
	<strong>The infrastructure bottleneck is often the constraint to provide international standards services to the airlines flying to Kathmandu. What exactly is the situation? <br />
	</strong> <br />
	We must accept this fact. We are not being able to develop the infrastructure as per the growth of air traffic movements. That is why we are very often facing air traffic congestion at TIA. To address such problems, we are conducting various measures. First of all, a TIA Capacity Enhancement Project is going on with support from an ADB loan of US$ 70 million. CAAN itself is investing another US$ 30 million in the project. This US$ 100 million project will address the extension, expansion, and development of TIA which includes the civil infrastructures such as runway and taxiway extension, construction of additional parking bay etc. The development of equipment is another component that is also in our priority. These components are ATC automation and communication and navigation equipment. These tasks are part of the capacity enhancement project. We are also planning to separate domestic operators and shift them somewhere close to Kathmandu. Dhulikhel seems to be a possible location and a detailed feasibility study is being conducted for that purpose. We are looking at this alternative so that we can use the present TIA only for International operation. <br />
	<br />
	<br />
	<strong>How is CAAN addressing air traffic issues like landing and take-off, flow of flights and routes etc? <br />
	</strong> <br />
	We have some problems in the international air route and we are inviting Indian authorities to Nepal to hold discussions on this very soon. <br />
	<br />
	<br />
	<strong>How improved has the passenger handling capacity of TIA become in the recent years? <br />
	</strong> <br />
	We are continuously trying to improve our services. But I can’t say that the improvements are significant because of the limited facilities. Even the space is the same as we have been using before. Upon the completion of the ADB project, we would be able to enhance the passenger handling capacity and provide other facilities accordingly. <br />
	<br />
	<br />
	<strong>What happened to the plan of making TIA operational for 24-hours-a-day? <br />
	</strong> <br />
	We are continuously exercising to operate that way. But there are certain things to be considered like manpower planning, reliability of the radar etc which are essential in making TIA operate for 24-hours-a-day. Besides CAAN, the immigration authorities and the security establishments also need to be prepared for it. <br />
	<br />
	<br />
	<strong>What is the overall air service infrastructure situation of Nepal? <br />
	</strong> <br />
	In terms of airports and airport facilities, we (the Ministry of Culture, Tourism and Civil Aviation and CAAN) are aggressively involved in improving and increasing airport infrastructure. The project for constructing Gautam Buddha Regional International Airport at Bhairahawa is in the pipeline. The revised estimated cost for the project is US$ 77 million. Another project for a regional international airport in Pokhara is also proceeding for which China Exim bank has shown an interest to invest in. <br />
	<br />
	<br />
	<strong>How many of our airports are capable of handling international flights in terms of runways and other infrastructures in Nepal? <br />
	</strong> <br />
	Airports in Bhairahawa, Nepalgunj and Pokhara are capable for conducting cross border flights with India. They can operate in Indian cities like Lucknow, Varanasi, Delhi and Patna. As for fullfledged international operations, we only have TIA to look up to. <br />
	<br />
	<br />
	<strong>Experts say that lack of direct international flights from major tourist destinations have resulted in great loss for our tourism sector. What is CAAN doing about it? <br />
	</strong> <br />
	The entire aviation sector understands the value of direct international flights. The scenario of constructing Nijgadh International Airport has emerged due to this need. It’s been so many years that we are talking about constructing it but there is no achievement on this front so far. If the nation really wants to promote the tourism sector on a massive scale, a full-fledged international airport is a must as the present international airport (TIA) is not a full-fledged one. It has many constraints because of the terrain, runways and lack of other infrastructures. That is why it is not possible to operate long haul flights from the US and Europe. Landing a big aircraft is another impossibility given the present circumstances. If the tourists from countries in Europe and the US could travel directly to Nepal, it would have been convenient to us as well as the tourists. For instance, it takes a minimum of two stops and one has to spend more than 24 hours to travel from Europe to Kathmandu. All the pleasure and excitement is gone because the tourists feel exhausted and tired due to long flights. The travellers have to spend more hours in transit than on board the flights. <br />
	<br />
	We are unaware of the exact tourism potentiality of Nepal. The President of International Civil Aviation Organization (ICAO) visited Nepal recently. He was shocked to hear that we were able to bring only about 700,000 tourists against our target to bring in one million tourists during Nepal Tourism Year 2011. <br />
	<br />
	We will not be able to develop our tourism sector as desired if we depend entirely on TIA only. By constructing a full-fledged international airport at Nijgadh will not only enable us to operate long haul international flights but also help establish Nepal as a transit hub like Hong Kong and Bangkok. <br />
	<strong><br />
	<br />
	What do you have to say about the fifth freedom rights of international airliners operating in Nepal? </strong> <strong><br />
	</strong> <br />
	We assure such rights in the Air Service Agreement (ASA) with international operators. The recent controversy with Air Arabia on the fifth freedom rights is meaningless. As per the provision of an ASA between Nepal and UAE, it is their right to seek so. If the international operators do not get their fifth freedom rights, they cannot run their businesses. We can’t even imagine building the Nijgadh Airport leaving aside such rights. Fifth freedom rights will help develop Nepal establish itself as a transit hub. But these controversies are hardly true for some other international airlines. More than 90 per cent international airlines are enjoying fifth freedom rights, for instance, Druk air is operating a flight between Kathmandu and Bhutan via Delhi. <br />
	<br />
	<br />
	<strong>‘Dragonair is Bringing a lot of People into Nepal’ <br />
	<br />
	<br />
	<br />
	<img alt="" src="http://www.abhiyan.com.np/images/uploaded/thomas-bellamy_1343383224.jpg" /><br />
	<br />
	THOMAS BELLAMY </strong> <strong><br />
	Manager - Nepal <br />
	Hong Kong Dragon Airlines Ltd <br />
	</strong> <br />
	<br />
	<strong><br />
	Can you share the rate of increase in passengers flying to and from Nepal over the years? <br />
	<br />
	</strong> Dragon air started its operation in Nepal in 1989. The service was halted in 2001 and re-launched in 2007. We have gradually increased our frequency and now have daily flights. We have increased the aircraft size with the increase in passenger numbers. We are taking more passengers to China, Japan, Australia and the US. These are the big destinations for us. Dragonair is also bringing a lot of people into the country especially during the peak tourist season from September to April. <br />
	<br />
	<br />
	<strong>How do you assess the quality of air service infrastructure in Nepal? <br />
	</strong> <br />
	There have been some good changes at the TIA recently – for example, the new check-in desks and screens that have been installed at the international terminal. We hope for more improvements to be made in the future. It is very important to have a very strong main airport here in Kathmandu to act as a hub for inbound Nepali tourism. <br />
	<br />
	<br />
	<strong>What is the demand on the number of flights over the years? How is Dragon Air managing the supply to meet the demand? <br />
	</strong> <br />
	We have the capacity to meet the growing demands. There is enough demand to utilise the capacity and thus, we increased the frequency to a daily flight in September 2011. We are quite optimistic about Nepal and will continue to monitor such situations. From the tourism perspective, a lot depends on the stability of things here in Nepal. If Nepal can get good coverage in other countries, the travel agents and airlines will be more willing to promote Nepal and the number of passengers will increase as well. <br />
	<br />
	<br />
	<strong>How cooperative have the Nepali government institutions been in helping meet the market demands? <br />
	</strong> <br />
	I think the intentions are good. There are obviously a few constraints in Nepal, but many of these will fall off in a more stable environment. For now, we just need to continue working together to improve wherever we can and to focus on the positives. The Airlines Operating Committee which comprises airport representatives from most of the major carriers in Nepal continues to work with the relevant authorities to look for improvements wherever possible. <br />
	<br />
	<br />
	<strong>What are your unique selling points? How aggressively are you marketing them? <br />
	</strong> <br />
	One of the unique selling points of Dragonair is having Hong Kong as its hub. We have fantastic connections, and together with our sister airline Cathay Pacific, we are capable of connecting passengers to over 160 destinations worldwide. In Hong Kong, the minimum connecting time with Cathay Pacific has been reduced to 50 minutes which gives passengers more choice and convenience. There are many destinations from Hong Kong within a relatively short distance – half of the world’s population within five hours. On the long-haul side of things, we connect to New York four-times-daily. We look at the possible frequency rather than relying solely on our capacity. We want to give passengers more choice, which means provide more departure time wherever sustainable. <br />
	<br />
	Dragonair’s world-class service and quality products have long been recognised – we’ve won the Best Airline – China category for six consecutive years in the respected Skytrax passenger survey and we were also voted the “World’s Best Regional Airline” in 2010 and 2011. Dragonair’s major strength is China. We fly to 19 destinations in mainland China and operate about 400 flights a week. Adding to it, our sound safety record, well-trained and professional staff, and good on-time performance are the positive sides to focus on. <br />
	<br />
	<br />
	<strong>Airlines flying to Nepal are said to have very few business class seats. Is it true that airlines do not see prospects for business class market here? <br />
	</strong> <br />
	Asia has shown its ongoing potential and resilience in the face of the current global economic downturn. Until now, Nepal has widely been regarded as a leisure travel destination. We are optimistic that, with stability, business and industry here can grow and along with it, the demand for business travel will rise. We actually have a decent number of business class seats on our Airbus A330 aircraft, but it would of course be nice if passengers originating from Kathmandu could fill more of those seats. <br />
	<br />
	<br />
	<strong>What are your operational difficulties and privileges received in Nepal? <br />
	</strong> <br />
	The weather is always a challenge for airline operations and it is no exception here in Nepal. We have worked with the authorities and our own engineering teams to overcome the constraints we face here, so as to ensure timely operation as much as possible. This is particularly important in the context of the airport operating hours (the airport closes after midnight). The ever increasing number of tourists would definitely benefit from further improvements at the airport, and we will continue to support positive initiatives from the authorities in that direction. <br />
	<br />
	<br />
	<strong>It is said that operating in Nepal is very cheap despite having poor infrastructure. What are its advantages? <br />
	</strong> <br />
	While operational cost is one of the many factors, we look at running our business anywhere. We see Nepal more for its market potential i.e. its attractiveness as a destination and travel demand to other countries like US, Australia, Japan, Korea and of course Hong Kong and China. <br />
	<br />
	<br />
	<strong>What are your expansion plans? <br />
	</strong> <br />
	We continue to look forward to opportunities in Nepal and act accordingly in terms of available possibilities. We will increase frequency if we continue to see good growth in passenger numbers at sustainable yields. Basically, we will react to the situation, and we’re optimistic that the outlook for Nepal is bright. <br />
	<br />
	On a larger scale, Dragonair is adding six aircraft: four Airbus A320s and two Airbus A330s to the fleet this year - expanding the size of the Dragonair fleet from 32 to 38. Two additional A320s and one A330 have already entered the fleet this May. In terms of Dragonair’s network this year, we launched flights to Jeju on 01 May (three flights per week), to Chiang Mai on 01 July (four flights per week) and to Kolkata, India in winter 2012 (four flights per week). Flights were also resumed to Taichung on 14 May (twice daily), to Guilin on 01 May (daily), and Xian on 01 Apr (daily). <br />
	<br />
	<br />
	<strong>‘Thai Airways was the First Airline to Operate Jet Service to Nepal’ <br />
	<br />
	<br />
	<br />
	<img alt="" src="http://www.abhiyan.com.np/images/uploaded/chantouch-srini_1343383315.jpg" /><br />
	<br />
	CHANTOUCH SRINILTA </strong> <strong><br />
	General Manager <br />
	Nepal &amp; Bhutan <br />
	Thai Airways International Public <br />
	Company Limited <br />
	</strong> <br />
	<br />
	<br />
	<strong>You are going to complete 44 years of operation in Nepal. How has been the journey so far? <br />
	</strong> <br />
	The history of Thai Airways International in Nepal dates back to 1968 when the inhabitants of Kathmandu had their first glimpse of THAI’s 72-seater French built Caravelle SE210 aircraft which touched the unfamiliar runway of Tribhuvan International Airport (TIA). We are going to complete 44 years of our operation in Nepal this year. <br />
	<br />
	THAI was the first-ever airline to operate jet service from Kathmandu and the airline that opened up the forbidden Himalayan Kingdom as a new tourist destination to the world. It was a spectacular and memorable event in the Nepali Aviation history. <br />
	<br />
	THAI also introduced the first computerized reservation system in Kathmandu in February 1985 and provided this facility to its leading travel agents since 1990. Royal Orchid Lounge at the TIA used to be the only lounge operated by THAI in the 1990s. However, after Nepal Government adopted liberal sky policy, many other international airlines joined the race. Our monopoly market share has been diluted a little bit but we are enjoying the competition. It has given us the opportunity to prove ourselves as the first choice carrier in terms of our fleet size and service standards. <br />
	<br />
	<br />
	<strong>What is the demand status on the number of flights over the years? How are you managing the supply to meet the demand? <br />
	</strong> <br />
	Being a pioneer and well renowned carrier, THAI always had the strategy to adjust the number of flights as per market demand. In the beginning, we operated once a week flight between Bangkok and Kathmandu and soon after that, one more flight was added to cope with the high demand of passengers. THAI started daily flights with A300-600 aircraft since the end of October 1997. In the context of growing demand of air seats to/from Nepal, we added three more flights in 2008. Based on the request of different tourism related associations like NATTA, PATA, HAN and NTB, we began to run 10 flights per week. Now we have seven flights a week with a configuration of 30 business class and 279 economy class seats. <br />
	<br />
	<strong><br />
	Thailand has been one of the most popular destinations for outbound tourism for the Nepalis. What is Thai Airways’ contribution to it? <br />
	</strong> <br />
	Thai Airways has played a leading role in the development of tourism not only in Thailand but also in helping Nepal in worldwide promotion as a major tourist destination through various media like our in-flight magazine “Sawadee” and Royal Orchid Holiday Packages tours. Besides performance, punctuality, and silk class services to our valued customers, we have joined hands with the Tourism Authority of Thailand by frequently organizing different events like Trade Fairs, Educational/ Medical fairs, familiarization trips for agents and media, Thai Food festivals, Thai Puppet shows etc. We also offer attractive packages and special fares for students and leisure travelers. <br />
	<br />
	<br />
	<strong>How has Thai Airways been promoting Nepal at the international level? <br />
	</strong> <br />
	Thai Airways was the first airline to operate jet service to Nepal and introduce this country to the world. These days, many airlines are inspired to operate their services in this country due to our successful operation for the past 44 years. THAI had actively participated in “Visit Nepal Year 1997” and spread good word all over to promote “Nepal Tourism Year 2011” as well. We joined hands with the organizers of Asian Mountain Bike championship in 2008 by offering special fares to the participants all around the world. In addition, we organized a big puja same year to introduce Lumbini to the pilgrims from all around the world. This year, we are going to sponsor the famous Nepali musical group “Sur Sudha” to perform in Thailand. <br />
	<br />
	<br />
	<strong>How cooperative are the Nepali Government institutions in helping meet the demands from this market? <br />
	</strong> <br />
	Thai Airways has been getting a very constructive support from the government bodies in Nepal. This is one of the reasons behind our uninterrupted service for the past 44 years. We have always been able to bring into operation the required number of flights connecting Kathmandu and Bangkok as per our market demand. This cooperation is good for both the countries in terms of tourism, economy, education and other sectors. We are thankful to the Nepal Government, NAC, CAAN, TIA, ATC, NTB, NATTA and PATA for the continued support extended towards THAI. <br />
	<br />
	<br />
	<strong>Most of the flights made to Nepal are targeting migrant workers. How sustainable is this policy? <br />
	</strong> <br />
	Labor traffic does not occupy a major business of our flight operations, it is only a partial business of our total occupancy. Since the very beginning, we have had different segments of traffic like the royalties, frequent flyers, government officials, diplomats, expats, students and the tourists. Labor traffic is also part of our business but as I said we don’t depend heavily on it. <br />
	<br />
	<br />
	<strong>What are the operational difficulties and facilities in Nepal? <br />
	</strong> <br />
	Lack of proper infrastructure, unstable government, political instability and unhealthy competition among budget airlines are the drawbacks hindering smooth operation of the renowned carriers such as THAI. <br />
	<br />
	<br />
	<strong>Operating in Nepal is said to be cheap. What is your experience? <br />
	</strong> <br />
	We do not think operating in Nepal is cheap. On the contrary, it is one of the most expensive in terms of ground handling, parking and landing, ground space, rental, ramp, fuel and all kind of other charges. <br />
	<br />
	<br />
	<strong> How are you managing your ground handling staff and crew members? <br />
	</strong> <br />
	THAI has its own handling service in Nepal. It has never compromised in quality services; therefore, we have our own operational, ground handling and administrative staff directly under the THAI set up of course. <br />
	<br />
	<br />
	<br />
	<br />
	<br />
	<strong><br />
	</strong></p>
<p>
	<strong>GSAs that Fuel the Business <br />
	<br />
	<br />
	By Gaurav Aryal </strong><br />
	<br />
	<br />
	Around 85 per cent of international airlines operating in Nepal have made their presence felt through a number of GSAs <br />
	<br />
	<br />
	International airline companies operating in Nepal prefer having a presence through their General Sales Agents (GSA) rather than having their local office stationed in the country. Around 85 per cent of international airlines operating in Nepal have made their presence felt through GSAs. Out of the 28 international airlines currently in operation, only four of them, namely Thai Airways, Air India, Qatar Airways and Etihad Airways have their country offices in Nepal. A source at a leading travel agency under the condition of anonymity said “It’s not only offline but also the online airlines that are operating through their GSAs in Nepal.” <br />
	<br />
	<br />
	Sunil Sharma, Managing Director at Society Travel Service Pvt Ltd said that offline GSAs could be of any number as travel agents have Special Prorate Agreement (SPA) with offline airlines on a code sharing basis. He said that such offline airlines carry transit passengers flying from Nepal to various sectors and destinations around the world. Sharma, who is also a GSA of RAK Airways said, “It would be a major headache for airline companies to have their office setup here and run after various things ranging from policies to issues regarding aviation fuel. The airlines feel it would be a waste of time as the documentation procedure here is difficult along with the bureaucratic hassles. GSAs have the knowhow about local issues and it would be easier for the airlines to operate through GSAs who are handed over with specific duties and responsibilities.” <br />
	<br />
	<br />
	Similarly, it is believed that the GSAs have a greater knowledge on the local market as they are the local partners that have been in existence for a long time. “GSAs bear expenses, mobilise local staff, have detailed information about the local market, and having a GSA is cost effective than having an airline office established here. So, the international airlines prefer having GSAs rather than setting up their local offices of their own,” said the source. GSAs, usually the agent for sales of air tickets, are also the partner for marketing the airlines they represent. The source said that airlines and agents in Nepal jointly carry out marketing campaigns for the airlines. According to the source, the travel agencies are lured to work as GSAs because they receive override commissions along with additional commissions and other benefits like travel certificates, and staff trainings among others. Sharma also said that GSAs work on override commission and set up office, hire staff required at the corporate office and even at the airport. However, ground handling is not allowed to be performed by GSAs as it is taken care of by Nepal Airlines Corporation for every airline other than Thai Airways and Air India. “The majority of the clientele of GSAs are anybody going abroad, be it tourists, migrant workers, students, business persons, visitors, expatriates and everybody else who is travelling,” said a source at a leading travel agency. The source added that the ratio of Nepalis to foreigner passengers is 75:25 per cent. Sharma said that the companies that work as GSAs for passenger segment are also the Cargo Sales Agents (CSA) with the respective airlines. Sources said that GSAs have been operating in Nepal for over three decades now. <br />
	<br />
	<br />
	However, sources said that it is difficult to exactly pin point the size of the GSA market and their respective market share because everything depends on the demand and supply of flights. They added that the demand and supply keeps on varying constantly. <br />
	<br />
	<br />
	The number of international air passengers flying to and from Nepal has increased over the years and so has the number of flights. In the first three months of this year, 717,182 international air passengers travelled via Nepal. According to the data of Nepal Tourism Board, 207,961 tourists arrived in Nepal via air route from January to April 2012. It is a 23.1 per cent increment from 168,958 tourist arrival during the same period of 2011. The major reason behind the increment in air passengers is the increase in tourist inflow and migrant workers going abroad in search of job opportunities, according to Ratish Chandra Lal Suman, General Manager at Tribhuvan International Airport. President Tours and Travels (PTT) represents around half-a-dozen airlines as their GSA. Gulf Air, Qantas Airways, Kenya Airways, United Airlines, Air Mauritius, Indigo Air are some of the airlines that it represents but PTT is the passenger sales agent for United Airlines and Indigo Air. Similarly, Zenith Travels Pvt Ltd, another travel agency represents Bahrain Air, Sri Lankan Airlines, Spice Jet, Turkish Airlines and Qatar Airways Cargo as their GSA. <br />
	<br />
	<br />
	<strong>New Airlines in Nepali Sky <br />
	<br />
	<br />
	By Dipa Baral <br />
	</strong><br />
	<br />
	AirAsia X has already started operations while Malaysia Airlines and BB Airways are planning to operate international flights from September this year <br />
	<br />
	<br />
	Nepal is on the way to become an international air hub, thanks to the rise in the number of tourists and labour traffic in the past few years. AirAsia X, the budget carrier of AirAsia, has already started operations from July 4 this year while Malaysian national carrier Malaysia Airlines and Kathmandu based BB Airways are planning to operate international flights from coming September. Besides, some prominent countries have shown interest to sign Air Service Agreements (ASAs) or to review the past ASAs with Nepal. AirAsia X has started scheduled flights between Malaysian capital Kuala Lumpur and Kathmandu two times a week i.e. Tuesdays and Thursdays and has plans to add two more flights from September this year. The airline has priced its ticket at Rs 11,000 (exclusive of taxes) for one way trip. “The ASA between Nepal and Malaysia allows Malaysian airliners to operate 21 flights a week. But, AirAsia X has taken the permission to operate seven flights a week at the most,” said Suresh Acharya, Head of Air Services Agreement, Airlines and Airport Operation Division at the Ministry of Culture, Tourism and Civil Aviation (MoTCA). <br />
	<br />
	<br />
	BB Airways, promoted by TBI Group of Non Resident Nepalis (NRNs) in Japan, will also operate flights from September 13 this year. The company has already brought a Boeing 757-200 (ER) on wet lease that will operate nine flights a week to Doha and Malaysia. “We will bring another aircraft of the same category after a month of our formal operation and operate 17 flights a week,” said Shishir Bhatta, CEO of BB Airways. The company will also add Singapore and Bangkok to its destinations after getting another aircraft on lease. <br />
	<br />
	<br />
	BB Airways had acquired a license for international operations from the MoTCA in the first week of January 2012. “We are aiming to promote Nepali identity all over the world through our international air service and aspire to place Nepal in the global travelling map,” said Bhatta. The airways has not made public its flight rates yet but informed that the ticket booking will be available both online and via travel agencies. <br />
	<br />
	<br />
	The third airline in the pipeline to commence international air service in Nepal is Malaysia Airlines, the national flag carrier of Malaysia. “It’s been more than a year since Malaysia Airlines obtained operating license from the ministry. It has plans to start flights from coming September,” said Acharya. The airline has a permission to operate seven flights a week between Nepal and Malaysia. Similarly, four countries— Vietnam, America, Australia and Indonesia—have shown interest to sign ASAs with Nepal while United Kingdom (UK), Jordan, Pakistan, Bhutan and United Arab Emirates (UAE) want to review their past ASAs. “We have not been able to translate the talk into action because of Nepal’s vague stance on fifth freedom. When the world is practicing freedom right up to the ninth, we are still arguing over granting fifth freedom right,” said Acharya. In December 2010, the government had to bar Air Arabia from exercising its fifth freedom right to fly on the Kathmandu- Kuala Lumpur sector at the eleventh hour following pressure from Nepal Airlines Corporation (NAC). The national flag carrier had claimed that the decision will make serious impact on its business. The case is now pending in the Supreme Court. “Rather than restricting the government from signing deals with international airlines, it must concentrate on its own capacity building and adopt aggressive marketing strategy,” said Acharya. He underscored the need of networking, partnership and alliance with other airlines to sustain in the present world. However, if NAC had believed that Air Arabia’s fifth freedom right would jeopardise its existence, it is yet to see what impact the entry of these three new airlines will make. “Once the new airlines commence operation, the competition will become even tougher because they will certainly end NAC’s monopoly in catering to the labour traffic. But, we cannot hold the market for NAC as the country has been practicing liberal sky policy. It is high time that NAC improved its services and got ready for competition,” said Acharya. <br />
	<br />
	<br />
	The MoTCA has also issued a 45-day public notice on May 25 inviting domestic operators to apply for international operation. The notice has invited applications for a chartered and a cargo flight each. Companies having paid-up capital of Rs 500 million and security bond of Rs 5 million can apply for the license by paying Rs 50,000 to the ministry and avail the document of Terms of Reference (ToR). The companies should also pay Rs 50,000 per route as royalty. <br />
	<br />
	<br />
	“So far, Siddartha International Airlines has applied to operate a chartered flight. But we hope to get some more applications as there is still enough time to apply,” said a high level official at the MoTCA. <br />
	<br />
	<br />
	<strong>Five Airlines: One Destination <br />
	<br />
	<br />
	By Sushila Budhathoki </strong><br />
	<br />
	<br />
	Nepal experienced the formal beginning of aviation in 1949 when a lone 4-seater Indian Beechcraft Bonanza aircraft arrived in Kathmandu <br />
	<br />
	<br />
	With 27 per cent arrivals and 14 per cent departures out of the total passenger movement in the year 2011, the airline companies originating from India contribute a large chunk of the international passenger movement in Nepal via its flights to Kathmandu. According to the TIA passenger manifest, the airlines from India registered passenger arrival numbering 354,738 out of the total of 1,292,515 passengers that landed in Nepal and 377,867 departures out of the total 1,407,512 departing passengers. Nepal experienced the formal beginning of aviation in 1949 when a lone, 4-seater Indian Beechcraft Bonanza aircraft arrived in Kathmandu. And after a decade, Himalayan Aviation Dakota had the first charter flight between Calcutta (now Kolkata) and Kathmandu. Airlines from India came into business operation from 1953. More than half-a-century of existence in the Nepali sky, Indian airliners still prove to be among the leading carriers that bring substantial number of passengers to Nepal. Ranjan Pokhrel, Head of the International Relations Department at CAAN, says, “If we look into the history of Nepali aviation, we find that the Indian airliners have made a significant contribution to Nepal’s aviation development.” He adds, “Indian airliners are important not only for the aviation sector but also to the economic, social and cultural aspects of Nepal. They are contributing towards providing transport facilities, bringing Indian tourists and strengthening the high level political relationship between Nepal and India from the beginning.” Currently, there are five Indian carriers - Air India, Jet Airways, Jet Lite, Indigo Airlines and Spice Jet - operating between Nepal and India. Kingfisher Airlines, once a major operator on the Kathmandu-Delhi route, has postponed its many international flights including the Kathmandu sector. Air India now operates 32 flights in a week which includes a daily flight between Kathmandu and Delhi and 4 flights a week on the Kathmandu-Kolkata and Kathmandu-Banaras routes. Similar is the story of another Indian carrier Jet Airways which operates a daily flight each on the Delhi-Kathmandu and Mumbai-Kathmandu sectors. Jet Lite, Spice Jet and Indigo have one flight each on the Delhi-Kathmandu route on a daily basis. <br />
	<br />
	<br />
	Nepal Airlines Corporation (NAC), the only Nepali airlines which pioneered flights to Indian cities has now postponed its flights since November 2011. It used to fly to Patna, Calcutta, Mumbai and Bangalore earlier. In the last two decades, NAC has not added any new aircraft. Pradip Karki, Director of Traffic Management at NAC, however, assures that flights to Indian destinations will resume soon. He says NAC must resume flights to India with a new fleet and the government should support the idea. He adds, “We have discussed and signed an MoU with the aircraft manufacturing company to either buy or lease aircraft. There may be Airbus A320 - a 150 seater or A330 - a 250 seater that will operate flights to India in the future.” Most Indian carriers are said to be low cost carriers (LCCs) when compared to other airlines. The fare for the economic class seats starts at Rs 6,300 while business class seats cost a maximum of Rs 34,000 on the Kathmandu-Delhi route. Many other international airlines have started to fly in the same route and the competition has grown stronger. TK Saha, the Country Manager at Air India says that his team is happy with the sector. “In spite of severe competition by other international airlines as well as Indian competitors, we are maintaining and operating our flights with an average of 74 per cent occupancy,” he adds. <br />
	<br />
	<br />
	Nepali and Indian aviation authorities reviewed the Air Service Agreement (ASA) in 2009 to permit Nepali airline companies to fly 24 destinations in India. As per the reviewed ASA, airlines from Nepal can incre',
			'published' => true,
			'created' => '2012-08-10',
			'modified' => '2012-08-22',
			'keywords' => '',
			'description' => 'The flow of international passengers in the first quarter of 2012 has been impressive enough to raise optimism among the concerned stakeholders. The statistics between January and March 2012 is an indication that international air service and passenger movement to and from Nepal is set to register a significant increase this year compared to 2011.',
			'sortorder' => '550',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 13 => array(
		'Article' => array(
			'id' => '642',
			'article_category_id' => '40',
			'title' => 'Infrastucture :The Basis To Development',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	<img align="left" alt="cover story" border="1" height="431" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/infra.jpg" style="margin:10px; padding:10px;" vspace="10" width="390" />The state of infrastructure in Nepal is far from promising at present, observe experts. While the government is primarily responsible for developing infrastructure in the country, it has more or less failed to live up to expectations largely due to its incapability of making use of available resources and money power. The governmentâ€™s inability to use the management acumen of the private sector has made matters worse. In recent times, the private sector has made its presence felt in developing infrastructure at its own level, especially in the communication and hydropower sectors.</p>
<p>
	According to the world global competitiveness report, in 2009/10, Nepal was placed in 131st position out of 133 countries in the quality of infrastructure. In 2010/11, Nepalâ€™s position further declined to 139th position, the lowest in the fray. This shows a severe need of quality infrastructure and upgrade of the existing ones in the country.</p>
<p>
	However, figures for basic infrastructure in other sectors are miserable, to say the least. At present, 890 people use one kilometre of road while 87 per cent of energy demand is still met through traditional sources. The government has prioritised infrastructure development from the beginning of planned development in 1956. Nepal spends around 60 to 70 per cent of around Rs 11 billion GDP annually, for infrastructure.</p>
<p>
	<strong>Private Sector Participation</strong></p>
<p>
	Private sector participation in development of physical infrastructures was formally realised only with the promulgation of act that facilitated private sector investment in 2006. From 1990 to 2007, the private sector invested US$ 404 million in just eight projects of low income category according to World Bank statistics. Out of these, five were in energy and three in telecom sector. The government realising the importance of the private sector involvement in developing infrastructure projects has adopted models like BOT (Build-Operate- Transfer), BOOT (Build-Own-Operate- Transfer), Design-Build-Operate (DBO), Design-Build-Maintain (DBM) etc. These models are in use for foreign partnerships mostly in hydropower projects.</p>
<p>
	 </p>
<p>
	 </p>
<p>
	 </p>
<p>
	<img align="middle" alt="cover story" border="1" height="125" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/cove5.jpg" vspace="5" width="200" /></p>
<p>
	<strong>Public-Private Partnership</strong></p>
<p>
	While the government suffers from capital crunch, the private sector has a profit maximising motive on top of its agenda. Therefore, a model of public-private partnership (PPP) seems to be a viable proposition for infrastructure development purpose. Purusottam Man Shrestha, National Project Manager of Public-Private Partnership for Urban Environment (PPPUE) observes that PPP model remedies the weaknesses of developing projects independently by the private sector or government. He adds, â€œIn the course of maximising profit, the private sector may disregard the interest of general public where the profit tends to get low.</p>
<p>
	Similarly, public sector is not seen as efficiently handling the projects and managing them, which can be best done by the private sector. The model of PPP can create a win-win situation for both the private and public sector partners.â€ With this model of development, possible losses can be minimised with the government backing while revenue collection can be best utilised with prudent management skills. In Nepal, few projects in sectors like drinking water, waste management, urban sanitation, solar street lights, bio-gas, urban transportation management like parking space, bus terminal management etc are under consideration, according to Shrestha. All these are projects are at a micro level, mostly developed in coordination with local government-like municipalities.</p>
<p>
	Large projects under PPP model like Kathmandu-Terai Fast Track, West-Seti A 750 MW project etc have been much discussed but are yet to see the daylight. Shrestha believes projects of small nature can be most suitable at the moment considering the financing capacity of the private sector. Solid waste management, drinking water, health related waste management, transmission line are taken as the best projects under this model.</p>
<p>
	Health and education are two other sectors that are considered appropriate for this model. R B Rauniar, the Managing Director of Interstate Multi-Modal Transport Pvt Ltd opines PPP is the best model of infrastructure development where there is a possibility of generating revenue as well as the development of basic infrastructure. He further says the frequent changes in policy and lack of national commitment on the political parties and leaders in the government has become the largest barrier for this model to be successful. Experts believe Nepal is yet to make preparations and work out so that this model will be the method of developing required infrastructures for the country.</p>
<p>
	<strong>Physical Infrastructures <br />
	</strong></p>
<p>
	Whether the private sector will invest or not in the development industry is dependent on the suitable investment climate and market for a particular infrastructure. The private sector can invest and develop in physical infrastructure like roads where there are alternatives. Alternative and fast track roads, bridges carry potential for private sector where they collect toll from the users. But private sector road developments like toll roads need huge investment which is difficult to manage by the business community alone.</p>
<p>
	In hydropower and communication sector, there has been encouraging private sector participation. Small and midsized hydropower projects are being developed by this community. In the communication sector, there are large players like Ncell, UTL, and new comers like Smart Telecom and Hello Nepal making their strong presence. Mega projects like the new international airport at Nijgadh in Bara, Kathmandu-Terai expressways and railway lines, mega hydro projects etc are not less viable. The proposed new international airport at Nijgadh could be one of the promising projects.</p>
<p>
	<strong><img align="left" alt="cover story" border="1" height="200" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/serv.jpg" style="margin:10px; padding:10px;" vspace="10" width="300" />Service Infrastructures <br />
	</strong></p>
<p>
	The private sector is seen active in developing and operating service infrastructures that are much needed for the general public. Private schools, colleges and hospitals have set a level of quality of services which their public counterparts are unable to compete with. Shrestha said that the issues witnessed in these sectors like over commercialisation can be solved if the PPP model can be used in these areas. He said that this model will help to expand the service over a larger area and larger group of service recipients. This model prevents these basic services from being too profit oriented.</p>
<p>
	<strong>Prospects <br />
	</strong></p>
<p>
	The private sector is demanding the development of basic infrastructure, however, very little is heard about the private sector taking initiative in sizeable physical infrastructure projects. Manakamana cable car is one prominent exception in this regard. In fact this project stands testimony that Nepalâ€™s private sector can develop infrastructure projects into profitable ventures. Experts believe there are numerous possibilities where private sector investors can take infrastructure as an investment opportunity. Small and medium projects in urban areas related to parking space, waste management and drinking water are attractive for this sector and identified as easy to develop too, according to Shrestha.</p>
<p>
	There are projects that garner profitable returns similar to that of any other business endeavours they have been traditionally carrying out. Some believe that development projects can be independently carried out by the private sector while some disagree with it. The latter opine that hard infrastructure development is the primary function and duty of the government. Till date, only 300 MW of total installed capacity of hydropower is produced but the demand is for 1100 MW. Besides, there is a huge market in India too. This underlines a great potential and demand for physical infrastructure.Pradeep Gangol, the Executive Manager of the Independent Power Producersâ€™ Association (IPPAN) reasons, â€œThe private investment is all the more important in poor countries like Nepal, which have limited resources to invest in infrastructural sectors like power, telecommunication, and transportation. If the private sector invests in hydropower, the government can allocate more funds for sensitive sectors like health and education.â€</p>
<p>
	<strong>Bottlenecks</strong></p>
<p>
	The biggest problem that infrastructure development faces is the financing issue. With the interest rate tremendously high, the rate of return becomes too low for anybody to find an interest in financing infrastructure projects.</p>
<p>
	Gangol says that time consuming procedure to acquire approval for forest use, environmental approval, procurement and use of explosives and land acquisition for projects also make it difficult to initiate projects. In the hydropower sector, the major problem is the constant price offered by Nepal Electricity Authority (NEA) to independent power producers for the last ten years while the bank interest rates are going up continuously.</p>
<p>
	<strong>The Way Forward</strong></p>
<p>
	The private sector players accept they are not in a position to develop large scale physical infrastructure at present. Availability of capital to finance these projects is the major hurdle. Though the business community has realised the potential of investing in infrastructure, they are doing so only in areas like hydropower and telecommunication. If the private sector is allowed to bring in foreign soft loan, developing large hydropower or similar revenue generating projects will be possible.</p>
<p>
	Similarly, Shrestha suggested that the donor agencies should involve themselves in PPP financing as well in addition to financing government projects like the ones at present. The Nepali financial market is still not oriented to PPP projects or infrastructure development. So a special tool can be devised for collecting capital from this market.</p>
<p>
	Similarly, general public can also be encouraged to invest in infrastructure projects. The governments in the developing countries like Nepal mostly have the budgetary constraints to commence the development projects. Therefore, PPPs can prove to be the alternative source of infrastructure investment. To attract and invite the private sector, first of all, the government must devise a viable project and put a certain amount of money.</p>
<p>
	Development partners too must look at such projects along with the government projects which will also help make greater impact of the donor funding. It is definite to take few more years when the private sector will gain confidence and prepare itself to develop infrastructure. Though there are hopes and prospects, it is certain that much time is required to see if private sector owned development projects actually become a reality. &nbsp;</p>',
			'published' => true,
			'created' => '2012-02-24',
			'modified' => '2012-08-23',
			'keywords' => '',
			'description' => 'In 2009/10
Nepal was
placed in 131st
position out of
133 countries
in the quality of
infrastructure.
In 2010/11,
Nepalâ€™s position
further declined
to 139th position.Projects of small
nature can be
most suitable
at the moment
considering
the fi nancing
capacity of the
private sector.',
			'sortorder' => '542',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 14 => array(
		'Article' => array(
			'id' => '641',
			'article_category_id' => '40',
			'title' => 'The Government Should Play A Proactive And Facilitating Role',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	Pradeep Gangol is the Executive Manager of the Independent Power Producers Association, Nepal (IPPAN). IPPAN has been consistently advocating and lobbying for investor friendly environment in Nepalese power development. Gangol is also a senior hydropower engineer and has more than two decades of experience to his credit in planning, surveying and designing of hydropower projects. During his long career, he was also involved in the reconnaissance and feasibility level design of micro and small hydropower projects, river training projects and slope stabilisation projects. In an interview with New Business Age, Gangol shared his views on prospects and constraints of developing hydropower based on private sector investment.</p>
<p>
	<strong><img align="left" alt="cover story" border="1" height="500" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/cove4.jpg" style="margin:10px; padding:10px;" vspace="10" width="378" />What is the prospect of private sector investment in Nepalese hydropower sector?</strong></p>
<p>
	The prospect of private sector investment in Nepaleses hydropower sector is indeed great. The enormous power potential in Nepal and the huge market for it, both domestically and in neighbouring countries make Nepal a lucrative destination for domestic and international investors. The private investment is all the more important in poor countries like Nepal, which have limited resources to invest in infrastructural sectors like power, telecommunication and transportation. If the private sector can invest in hydropower, the government can allocate more funds for sensitive sectors like health and education. However, the government of Nepal has to do a lot to improve the investment climate in Nepal so as to lure investors to invest in Nepalese&nbsp; hydropower sector.</p>
<p>
	<strong>Hydroelectricity sector has been attracting some private investors for developing projects. How can the private sector investors be encouraged to invest further in this sector? <br />
	</strong></p>
<p>
	The Government of Nepal has to think in a more liberal way and announce a series of incentives that will make Nepalese power sector the most lucrative for investment in the world. Such measures/incentives will eventually lead to the construction of numerous small, medium and large hydropower projects all over Nepal, and help create employment for millions of people. It will also generate billions of rupees, through royalties, for the government and local DDCs and VDCs and help local people become prosperous through purchase of shares. Besides, it can accelerate local development through CSR activities like access roads, heath posts, schools, trails, irrigation canals, vocational and technical training etc. The government should keep in mind that investment will flow where there is an opportunity for profit.</p>
<p>
	<strong>Is it the issue of returns or are there any other reasons for private sector being hesitant to invest in infrastructure? <br />
	</strong></p>
<p>
	In spite of enormous potential for hydropower development in Nepal and possibility of huge power market in India, investors are still shying away from investing into Nepalese power sector. Besides rate of return issues, Nepal has to make sure that it has open access to the Indian market through a government-to-government agreement.</p>
<p>
	And the government has to assure that there will be policy stability at least for a reasonable period of time, say 10 years. Last year, for example, the department of electricity development (DoED) made changes in its rules and regulations four times within a year. Such frequent changes in rules and regulations and policies do not help in enthusing investors to invest in Nepalese power sector. Furthermore, it is a very time consuming process to acquire documents related to forest clearance, EIA, procurement and use of explosives. Land acquisition for projects is also equally difficult. Now-a -days, it is becoming increasingly difficult to manage local expectations.</p>
<p>
	<strong>Do you see the possibility of developing projects independently by private companies? <br />
	</strong></p>
<p>
	Nepali power companies can develop small power projects (up to 25 MW) independently. For bigger projects, however, they have to enter into joint ventures with foreign power companies or investors. The government should encourage more and more domestic investors to invest in hydropower, by way of equity investment.</p>
<p>
	<strong>Why do you think commercial banks are hesitating to invest in this sector?</strong></p>
<p>
	It is a very strange situation that though Nepal is facing an unprecedented 19 hoursa- day of load shedding, the commercial banks are reluctant to invest in the power sector. The main reason is that the power purchase agreement (PPA) rates have remained virtually stagnant over the last 10 years. During the same period, the prices of construction materials like cement, steel rods, copper wire, fuel costs, and labour charges have increased exponentially.</p>
<p>
	To make matters worse, the bank interest rates have also increased from 10 per cent to 15 per cent. The government is still hesitant to make suitable adjustments in PPA rates and thats why the PPA rates reflect market conditions. For example, if a farmer finds that the cost of producing potatoes is Rs 20 per kg as against the market price of Rs 16 per kg, s/ he will rather invest in producing other crops that ensure better rates of return. This is the reason for which the commercial banks are reluctant to invest in the power sector.</p>
<p>
	<strong>What are the challenges for investors after developing a project? <br />
	</strong></p>
<p>
	The challenges for investors to invest in Nepalese power sector are many. The tariff rates do not reflect market conditions while the bank interest rates are still high. It is difficult and time consuming to overcome bureaucratic hassles to acquire documents related to forest clearance, EIA report, procurement and use of explosives etc. Land acquisition is another problem that the investor is finding increasingly difficult to cope with. Policy changes are frequent, more often to discourage the investors. And lastly, it is becoming increasingly difficult to cope with the management of local expectations.</p>
<p>
	<strong>How do you expect the government to play a role so as to invite more private investors in this sector? <br />
	</strong></p>
<p>
	The government has to make appropriate changes in the electricity act and policies so as to instil confidence in investors. There should be an electricity regulatory commission that will create a level playing field for both private and public sectors. The government should make adjustment in power tariff so as to ensure reasonable rate of return. If needed, it should think about VAT exemption to make the power sector most lucrative in Nepal. The objective of the whole exercise should be to lure general public (through shares), investors, and banks to invest enthusiastically in the power sector. There should be policy stability for at least 10 years. Furthermore, a new department of clearance can be established under the energy ministry to ensure that all documents are processed within a month. The government should play a proactive and facilitating role in acquiring land for projects and managing local expectations.</p>
<p>
	<strong>How do you find the government's role in ending the energy crisis at the earliest and accelerate power development in Nepal?</strong></p>
<p>
	Nepal is facing unprecedented load shedding of 19 hours a day which is a serious problem. But the government does not seem to be as serious as the grave situation demands. The measures announced by the government seem to be piecemeal, rather than announcing all the needed measures at once. The present power crisis, if continued any longer, will eventually put our entire economy to a grinding halt. Therefore, the politicians have to become more serious in solving Nepalese power problems. &nbsp;</p>',
			'published' => true,
			'created' => '2012-02-24',
			'modified' => '2012-08-23',
			'keywords' => '',
			'description' => 'Pradeep Gangol is the Executive Manager of the Independent Power Producers Association, Nepal (IPPAN). IPPAN has been consistently advocating and lobbying for investor friendly environment in Nepalâese power development. Gangol is also a senior hydropower engineer and has more than two decades of experience to his credit in planning, surveying and designing of hydropower projects.',
			'sortorder' => '541',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	)
)
$current_user = null
$logged_in = false
simplexml_load_file - [internal], line ??
include - APP/View/Elements/side_bar.ctp, line 60
View::_evaluate() - CORE/Cake/View/View.php, line 971
View::_render() - CORE/Cake/View/View.php, line 933
View::_renderElement() - CORE/Cake/View/View.php, line 1224
View::element() - CORE/Cake/View/View.php, line 418
include - APP/View/Articles/index.ctp, line 157
View::_evaluate() - CORE/Cake/View/View.php, line 971
View::_render() - CORE/Cake/View/View.php, line 933
View::render() - CORE/Cake/View/View.php, line 473
Controller::render() - CORE/Cake/Controller/Controller.php, line 968
Dispatcher::_invoke() - CORE/Cake/Routing/Dispatcher.php, line 200
Dispatcher::dispatch() - CORE/Cake/Routing/Dispatcher.php, line 167
[main] - APP/webroot/index.php, line 117

file not found!

Notice (8): Undefined variable: file [APP/View/Elements/side_bar.ctp, line 133]Code Context  //  $file = 'http://aabhiyan:QUVLg8Wzs2F7G9N7@nepalstock.com.np/api/subindexdata.xml';



    if(!$xml = simplexml_load_file($file)){
$viewFile = '/var/www/html/newbusinessage.com/app/View/Elements/side_bar.ctp'
$dataForView = array(
	'articles' => array(
		(int) 0 => array(
			'Article' => array(
				[maximum depth reached]
			)
		),
		(int) 1 => array(
			'Article' => array(
				[maximum depth reached]
			)
		),
		(int) 2 => array(
			'Article' => array(
				[maximum depth reached]
			)
		),
		(int) 3 => array(
			'Article' => array(
				[maximum depth reached]
			)
		),
		(int) 4 => array(
			'Article' => array(
				[maximum depth reached]
			)
		),
		(int) 5 => array(
			'Article' => array(
				[maximum depth reached]
			)
		),
		(int) 6 => array(
			'Article' => array(
				[maximum depth reached]
			)
		),
		(int) 7 => array(
			'Article' => array(
				[maximum depth reached]
			)
		),
		(int) 8 => array(
			'Article' => array(
				[maximum depth reached]
			)
		),
		(int) 9 => array(
			'Article' => array(
				[maximum depth reached]
			)
		),
		(int) 10 => array(
			'Article' => array(
				[maximum depth reached]
			)
		),
		(int) 11 => array(
			'Article' => array(
				[maximum depth reached]
			)
		),
		(int) 12 => array(
			'Article' => array(
				[maximum depth reached]
			)
		),
		(int) 13 => array(
			'Article' => array(
				[maximum depth reached]
			)
		),
		(int) 14 => array(
			'Article' => array(
				[maximum depth reached]
			)
		)
	),
	'current_user' => null,
	'logged_in' => false
)
$articles = array(
	(int) 0 => array(
		'Article' => array(
			'id' => '870',
			'article_category_id' => '40',
			'title' => 'Now Is The Challenge Of Getting Right Reinsurer At A Competitive Price',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	<strong style="color: rgb(35, 200, 250); font-size: 16px; text-align: right;">‘When the losses start decreasing, the premium will come down’</strong></p>
<p style="text-align: justify;">
	<strong><img align="right" alt="Kewal Krishna Shrestha, Everest Insurance" height="316" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/kewal_cover_feb2013.jpg" style="margin: 0 0 0 10px;" width="250" /></strong></p>
<address style="text-align: right;">
	<strong>Kewal Krishna Shrestha&nbsp;</strong></address>
<address style="text-align: right;">
	<strong>President, Nepal Insurers Association &amp;</strong></address>
<address style="text-align: right;">
	<strong>CEO, Everest Insurance</strong></address>
<p style="text-align: justify;">
	<strong><br />
	</strong></p>
<p style="text-align: justify;">
	<strong>What is the size of the aviation insurance market in Nepal?</strong></p>
<p style="text-align: justify;">
	The market size is around Rs 420- 500 million in terms of the premium we collect from our clients.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What about your company’s stake in the market?</strong></p>
<p style="text-align: justify;">
	We own around 25-30 per cent share in Nepal’s aviation insurance market.&nbsp;</p>
<p style="text-align: justify;">
	<strong>It is said that some insurance companies are trying to form a pool to collectively handle the claims on aviation insurance. Are you aware of the latest progress in this regard?</strong></p>
<p style="text-align: justify;">
	I don’t think the pool is what we need to improve the aviation insurance business. Now we are competing to get the lowest rate from reliable companies (reinsurers) but if such a pool is formed, there would be monopoly in the insurance market and there would be no competition. Insurance companies could syndicate the aviation insurance business and the situation could worsen further. The premium will be at a high rate and the airliners will raise the ticket price which in turn will make air travelling difficult. It seems beneficial to all of us but if we view it minutely it is only a means of syndicating that could affect the whole country economically. &nbsp;</p>
<p style="text-align: justify;">
	However, if such pool is sure to be formed we could form this pool in two ways. One, we can calculate certain risks in the aviation industry and other, we can focus on the risks involved in the hull, baggage etc. However creating such a pool needs lots of vision.&nbsp;</p>
<p style="text-align: justify;">
	Beema Samiti recently organized an interaction programme on the possibilities of merger between &nbsp;insurance companies. This interaction was a good initiation in the insurance business but I think both the government and Beema Samiti should be well prepared on it. It needs lots of homework and researches whether to form a pool or to merge the insurance companies.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What future do you see for the aviation insurance business in Nepal?</strong></p>
<p style="text-align: justify;">
	The prospects of aviation business in Nepal depend on the growth of the airliners. The more airlines are there, the better for the aviation insurance business. The theory of demand and supply is applied in the aviation business also. Many airlines are not functioning well and some of them have registered but have not started their operation yet. If new airliners start operating it would benefit both the airliners and the aviation industry. &nbsp;Development of airports and runways in a sustainable way can also sustain airliners. And the development of airliners ultimately grows the aviation insurance business. Since there is a lot of prospects in the tourism sector, I see bright future of aviation insurance business.&nbsp;</p>
<p style="text-align: justify;">
	<strong>Aviation insurance premium in Nepal is said to be one among the highest in the world? Why is it so high?</strong></p>
<p style="text-align: justify;">
	No, I disagree with this. We used to pay 8-9 per cent premium some 10 years ago and we were able to reduce that as low as 2 per cent later. Now again the reinsurance companies are charging the same old rate or even higher. It is mainly because of the risk factors in the aviation industry of Nepal and I don’t think it is unjustifiable. The terrain, safety measures in the aviation industry in Nepal and lack of maintaining safety standards by all the stakeholders involved in the aviation industry are some of the reasons behind the increment of premium. We lack the standard safety measures in spite of ICAO advice.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What do you expect from the Beema Samiti or the government for that matter to facilitate the aviation insurance business in the country? &nbsp;</strong></p>
<p style="text-align: justify;">
	The government can enforce the safety standards. It can properly manage the runways, ground handling, and certify efficiency of the people and the equipment used in the aircraft or for the aircraft maintenance. If you see how the baggage in airports is handled, you will find how improperly things are done. The baggage is loaded in tractors and the insurer has to pay if there is a damage. Furthermore, the international airport in Nepal is very crowded. I think the TIA should now be shifted to some convenient place.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What are the key challenges and issues facing the aviation insurance industry in Nepal?</strong></p>
<p style="text-align: justify;">
	Now is the challenge of getting the right reinsurer at a competitive price. The aviation business is anyway running though the reinsurers are charging up to 12 per cent. But what if they charge 20-25 per cent? I don’t think aviation in Nepal could bear such high premium rates. Moreover, the environment could be such that even the high premium might not draw reinsurers into confidence. Because of the high risk involved in this business, the reinsurers could add more clauses which could affect the overall aviation business in Nepal. And then it will be hard to find reliable reinsurers and we will have to reinsure with whichever party we find. When the claim increases, the premium market becomes hard and reinsurers hesitate to do business. And aviation insurance is driven by reinsurers. Unless the scenario of this seller-driven market changes, we won’t have any other alternative.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What needs to be done to address these challenges?</strong></p>
<p style="text-align: justify;">
	CAAN has to be strong. All the stakeholders of the aviation industry should maintain the safety standards prescribed by ICAO in terms of physical amenities, ground handling, aircraft maintenance, tracing of the aircraft personnel etc. Maintaining the safety standard is the foremost requirement. Everybody in the aviation industry should strictly follow the policies and run under rules and regulations of the government. &nbsp;</p>
<p style="text-align: justify;">
	<strong>The annual claims payout in the aviation section has been constantly rising. This is bound to further increase the already significantly high aviation insurance premium. How are we going to tackle this problem?</strong></p>
<p style="text-align: justify;">
	This is not a problem; it’s an outcome which is natural. When claims payout in the aviation sector starts increasing, increment in the premium is normal internationally. &nbsp;And when the claims start rising, the party is affected and slowly it affects other airliners. When the risk is found the reinsurer loads the premium and that is considered normal in the insurance business.&nbsp;</p>
<p style="text-align: justify;">
	When safety measures are properly followed the risk has to go down. For this, all the stakeholders in the aviation industry should come together and contribute. &nbsp;Evaluation of our work and adopting things that make this business ideal as well as searching ways of perfection in the aviation business is a must.&nbsp;</p>',
			'published' => true,
			'created' => '2013-03-16',
			'modified' => '2013-03-16',
			'keywords' => '',
			'description' => 'Now we are competing to get the lowest rate from reliable companies (reinsurers) but if such a pool is formed, there would be monopoly of the insurance companies and there would be no competition.',
			'sortorder' => '754',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 1 => array(
		'Article' => array(
			'id' => '869',
			'article_category_id' => '40',
			'title' => 'When The Losses Start Decreasing, The Premium Will Come Down',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	<strong style="color: rgb(35, 200, 250); font-size: 16px; text-align: right;">‘When the losses start decreasing, the premium will come down’</strong></p>
<p>
	<img align="right" alt="Pronab Sen, National Insurance Company Ltd" height="317" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/pronab_cover_feb2013.jpg" style="margin: 0 0 0 10px;" width="250" /></p>
<address style="text-align: right;">
	<strong>Dr Pronab Sen&nbsp;</strong></address>
<address style="text-align: right;">
	<strong>Chief Executive Officer,&nbsp;</strong></address>
<address style="text-align: right;">
	<strong>Nepal</strong><strong>National Insurance Company Ltd</strong></address>
<p>
	 </p>
<p style="text-align: justify;">
	<strong>What is your company’s stake in the aviation insurance portfolio?</strong></p>
<p style="text-align: justify;">
	We are moving very selectively in the aviation insurance in Nepal. Previously, Guna Air was 100 per cent with us and now Simrik Air has taken it over. There are some airliners which are having reinsurance support from our corporate office in India- like Buddha Air. We have around five percent market share in the aviation portfolio. Agni Air is co-insured with Shikhar Insurance – 60 percent with them and 40 per cent with us. Another airline in Pokhara has insured 49 per cent with us and 51 per cent with Shikhar. We are now negotiating with Simrik because Guna was with us. &nbsp;</p>
<p style="text-align: justify;">
	We are the direct branch of a reinsurance company in India governed by the Indian Government. We have high retention capacity. We reinsure the portion to other reinsurance companies that is beyond our financial strengths. This is a worldwide phenomenon in insurance business. It depends on portfolios and varies from risk to risk. Sometimes, we retain 20 per cent and sometimes 90- depending on the risks.</p>
<p style="text-align: justify;">
	<strong>Is it true that the insurance companies in Nepal have not been able to make profits from aviation insurance? Why?</strong></p>
<p style="text-align: justify;">
	Yes it is true. And the reason is there are a number of airliners which are very small in size. It may be also because of the weather and terrain of Nepal. Small airliners and aviation companies do not afford expertise and there are few airliners where I have seen the full expertise – this is the biggest challenges for the Nepali aviation sector. Many of the aircraft are also very old. &nbsp;</p>
<p style="text-align: justify;">
	Some of the insurance companies have retention capacity of 0.4 per cent and rest is reinsured. These companies are getting only the reinsurance commission. &nbsp;</p>
<p style="text-align: justify;">
	<strong>Some insurance companies are trying to form a pool to collectively handle the aviation insurance claims. What is your view on this proposal?</strong></p>
<p style="text-align: justify;">
	It is still in the pipeline. Nothing concrete has come out so far. But if such a pool is formed, it will help both the aviation insurers as well as the airliners. After the formation of the pool, they don’t have to run around different countries trying to find out the lowest rate. Once the pool is formed, they know that they have to approach only one office which will organize everything. And the office will be the consortium of a number of insurance companies.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What future do you see for aviation insurance business in Nepal?</strong></p>
<p style="text-align: justify;">
	The future is good because there is a tremendous growth in the tourism sector in Nepal. The tourism sector has a tremendous scope and the more this sector grows, the more the aviation sector expands. More people prefer to travel by air in Nepal considering the time taken in travelling by roads. By air you reach Pokhara in 20-25 minutes.But if you take a bus, it takes 5- 6 hours. And the growth of airliners has paved the road for growth of the aviation insurance companies.&nbsp;</p>
<p style="text-align: justify;">
	<strong>Almost whatever the insurance companies earn from the aviation segment goes to the reinsurance companies abroad. Some are even said to be making losses in the aviation segment. It is said that the companies know that they are not going to make profits from the aviation segment. But they do aviation insurance just to show high insurance premium collection. What do you say?</strong></p>
<p style="text-align: justify;">
	It is not like that. The premium is based on the past losses. If you see the statistics, almost every year there is an air crash and some years, there are around two air crashes in Nepal. And the rate of premium is governed by the reinsurance market. Because of the air accidents, some of the reinsurers were hesitant to do business in Nepal. The aviation summit last month also put forth lots of similar issues in the aviation industry- the dos and the don’ts. Beyond that, the aviation business has a very bright future.&nbsp;</p>
<p style="text-align: justify;">
	<strong>Aviation insurance premium in Nepal is said to be one among the highest in the world? Why is it so high?</strong></p>
<p style="text-align: justify;">
	Yes. As I already said, insurance premiums are based on the past losses. Because of the crashes, the premium has been rising. The recent crashes of Sita Air and Agni Air were a serious concern for the reinsurers.&nbsp;</p>
<p style="text-align: justify;">
	<strong>Are those high premium rates justifiable?&nbsp;</strong></p>
<p style="text-align: justify;">
	The loss is calculated based on the coverage offered by the insurance companies. Suppose there is a loss. You pay some percent of the loss. You pay for the hull losses and the machinery parts or you pay for the passenger liabilities. Passenger liability losses are much higher than the hull losses depending on the kind of passengers. The liability losses are much higher if the passengers are from the US or Canada, and lower if they are from the SAARC countries. The liability losses vary from people to people because of theirs living standard. While finalizing the rates, reinsurers study these things.&nbsp;</p>
<p style="text-align: justify;">
	Airliners not only fly Nepali people or SAARC people but also other foreigners. For example, most of the people in the mountain flights are from European countries. Furthermore, airliners have different premiums depending on their types, aircraft, and management facilities they have.&nbsp;</p>
<p style="text-align: justify;">
	<strong>How can we lower the high insurance premium?</strong></p>
<p style="text-align: justify;">
	It’s a million dollar question. It has to be high, otherwise it won’t be viable. We are not totally dependent on our own companies. We may not have the capacity, so we need to approach other markets for reinsurance. When the losses start decreasing, the premiums will simultaneously come down. For example in India, the fire premium rate was very high in the past. Many studies were conducted. And when they calculated the total premium over a period of time, and how much profit they generated- then the premium started coming down. Likewise, though the premium is high at the moment, it will definitely go down every year if the risk is reduced. In the present scenario, you don’t have any choice. Until the reinsurer accepts the business, how can you reinsure?</p>
<p style="text-align: justify;">
	<strong>The country’s first-ever aviation insurance summit was organized in the capital recently. How helpful was this summit?</strong></p>
<p style="text-align: justify;">
	I think it was helpful. We got to know the perspectives of different reinsurers present there. It was the first of its kind event in Nepal and was helpful for everyone involved in the aviation industry.&nbsp;</p>',
			'published' => true,
			'created' => '2013-03-16',
			'modified' => '2013-03-16',
			'keywords' => '',
			'description' => 'We have high retention capacity. We re-insure the portion to other reinsurance companies that is beyond our financial strengths.',
			'sortorder' => '753',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 2 => array(
		'Article' => array(
			'id' => '868',
			'article_category_id' => '40',
			'title' => 'Unhealthy Competition Among The Insurance Companies Should Be Stopped',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	<span style="color:#23c8fa;"><span style="font-size: 16px;"><strong>‘Unhealthy competition among the insurance companies should be stopped’</strong></span></span></p>
<p>
	<strong><img align="right" alt="Prem Bahadur Maharjan, Rastriya Beema Sansthan" height="307" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/prem_cover_story_feb2013.jpg" style="margin:0 0 0 10px;" width="250" /></strong></p>
<address style="text-align: right;">
	<strong>Prem Bahadur Maharjan&nbsp;</strong></address>
<address style="text-align: right;">
	<strong>Chairman</strong></address>
<address style="text-align: right;">
	<strong>Rastriya Beema Sansthan</strong></address>
<div>
	 </div>
<p style="text-align: justify;">
	<strong>What is your company’s stake in the aviation insurance market?</strong></p>
<p style="text-align: justify;">
	The amount of insurance is calculated in foreign currency. We own around USD 2 million business which constitutes 30 to 40 per cent of the total aviation insurance business. We are the only insurance company insuring big aircraft including jet planes. We have insured the Jet planes of the national flag carrier, Nepal Airlines, and BB Airways lately. We have succeeded in acquiring the largest proportion of insurance share in the market because national airlines is insured with us. &nbsp;&nbsp;</p>
<p style="text-align: justify;">
	<strong>Is it true that the insurance companies have not been able to make profits from aviation insurance? Why?</strong></p>
<p style="text-align: justify;">
	I don’t agree with this. &nbsp;In our case, we feel that there is some harsh competition including in the premium rates. And particularly in the private airlines sector, we have witnessed a number of air crashes. That might have contributed to the loss in the overall aviation insurance business but it is not the case of Beema Sansthan. We have not gone through such loss. Nor &nbsp;have our clients faced such air crashes.&nbsp;</p>
<p style="text-align: justify;">
	<strong>Some insurance companies are trying to form a pool to collectively handle the claims on aviation insurance. When could we see such a pool?</strong></p>
<p style="text-align: justify;">
	I have also heard about it. I guess the practice of collectively handling the aviation insurance claims is yet to materialize. It would be good if such a pool is formed. It will help prevent unhealthy competition.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What future do you see for aviation insurance business in Nepal?</strong></p>
<p style="text-align: justify;">
	I see a lot of potential for this business. &nbsp;The aviation market has grown in Nepal over the years and with it, the aviation insurance business, too, has grown. The other big reason is that Nepal is promoting tourism by organizing many events. This has increased the number of air passengers to Nepal and thus helped the aviation insurance in the country.&nbsp;</p>
<p style="text-align: justify;">
	<strong>Almost whatever the insurance companies earn from the aviation segment goes to the reinsurance companies abroad. Some are even said to be making losses in the aviation segment. It is said that the companies know that they are not going to make profits from the aviation segment. But they do aviation insurance just to show high insurance premium collection. What do you say?</strong></p>
<p style="text-align: justify;">
	In a way, it is true. Since we don’t have a strong financial institution that can cover the aviation insurance, we depend on foreign reinsurance companies. Though the percentage of commission from premium collection that we collect seems minimal, we are able to sustain the operation. Though the commission might be less in comparison to the bigger amount of insurance premium; we have other indirect benefits as well. It is because we have to reinsure &nbsp;with very reliable reinsurance companies recognized internationally. There are very few reliable reinsurance companies. Beema Sansthan has found a re-insurer based in the United Kingdom.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What do you expect from the Beema Samiti or the government for that matter to facilitate the aviation insurance business in the country? &nbsp;</strong></p>
<p style="text-align: justify;">
	There is unhealthy competition among the insurance companies at present. They tend to take the aviation insurance business at low rates ignoring the risk factors. The situation is such that some companies might collapse if something bad happens to the airlines they have insured. Moreover, I have heard that some insurance companies are even unable to pay out the claims. Beema Samiti, being the regulatory body, can set some standards to avoid such kind of unhealthy competition. Beema Sansthan is a government-owned institution. So, it does not need to jump into this unhealthy competition. Though aviation insurance is growing, almost all the premium collected here goes abroad. We get only a fraction of it as commissions. I think this is the time that Beema Samiti should form a government-owned re-insurance company in Nepal. It will help us to stop or decrease the amount of money going outside the country.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What are the key challenges and issues facing the aviation insurance industry in Nepal?</strong></p>
<p style="text-align: justify;">
	As I already mentioned, the first challenge is unhealthy competition among some insurance companies. The risk factor is also growing and it is making premiums costlier. We have witnessed many air crashes in a quite short period of time. It is not only about insurance, it is also about the safety of the people.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What needs to be done to address these challenges?</strong></p>
<p style="text-align: justify;">
	There has to be a strict monitoring mechanism for air traffic discipline. People involved in the aviation business should be given safety education. Pilots should also be alerted not to take any sort of risks.&nbsp;</p>
<p style="text-align: justify;">
	Moreover, unhealthy competition among the insurance companies should be stopped. And it could be managed since there are very limited insurance companies in the aviation sector. Furthermore, the government should try to establish reinsurance companies here in Nepal itself.</p>
<p style="text-align: justify;">
	<strong>The country’s first-ever aviation insurance summit was organized in the capital recently. How did you find this summit?</strong></p>
<p style="text-align: justify;">
	From educational point of view, the summit was quite fruitful to the people involved in the aviation insurance sector. It was successful in raising the issues related to the risk factors in the aviation insurance and about the premiums that are in practice. Such summits are helpful in making people aware about the things happening in the aviation insurance market. I expect such events to continue.&nbsp;</p>',
			'published' => true,
			'created' => '2013-03-16',
			'modified' => '2013-03-16',
			'keywords' => '',
			'description' => 'The first challenge is unhealthy competition among some insurance companies.The risk factor is also growing and it is making premiums costlier.',
			'sortorder' => '752',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 3 => array(
		'Article' => array(
			'id' => '867',
			'article_category_id' => '40',
			'title' => 'Airclaims Is A Major Resource For Nepali Civil Aviation',
			'sub_title' => '',
			'summary' => null,
			'content' => '<address>
	<strong style="text-align: right;"><font color="#23c8fa" size="3"><span style="font-style: normal;">‘Airclaims is a major resource for Nepali civil aviation’</span></font></strong></address>
<address>
	<strong style="text-align: right;"><font color="#23c8fa" size="3"><span style="font-style: normal;"><br />
	</span></font></strong></address>
<address>
	<strong>Douglas G Cavannagh</strong></address>
<address>
	<strong>Risk and Safety Manager</strong></address>
<address>
	<strong>Airclaims&nbsp;</strong><strong>(A UK-based leading reinsurance company)</strong></address>
<p style="text-align: justify;">
	<strong><br />
	</strong></p>
<p style="text-align: justify;">
	<strong>How long has your company been involved in the insurance business in Nepal?&nbsp;</strong></p>
<p style="text-align: justify;">
	Airclaims is the leading provider of claims, risk management and asset management services to the global aviation industry. Founded in 1964 Airclaims has been handling aviation insurance claims in Nepal since the late 1960s. Airclaims currently handles in excess of 2500 assignments each year though a global network of 20 offices. Airclaims is the leading provider of such expertise worldwide.&nbsp;</p>
<p style="text-align: justify;">
	In terms of Airclaims risk and safety consulting services this service offering was initially utilised by aviation insurance underwriters to assess the risk profile of different operators. The initiation of these studies was often a consequence of a serious accident or a deteriorating loss record on the part of an operator.&nbsp;</p>
<p style="text-align: justify;">
	As our capability grew these services were expanded to include risk and safety assessments of maintenance, repair and overhaul facilities, helicopter operators, ground handling companies and airports. During the past 20 years many of these services have also been utilised by petroleum and mining companies who use our expertise to assess the risk of different contractors that they use. Airclaims is now one of the leading providers of operator risk assessments in this sector. Our experience is often in demand from investors who require a bespoke due diligence study to assist them to better understand the risks associated with a potential acquisition and to provide valuations and condition surveys of aircraft to potential purchasers or those who wish to update the value of their aviation assets. We also undertake a considerable amount of work for airlines and operators who require a completely impartial assessment of their operation and a worldwide perspective to help them improve their own internal safety capability. This ranges from the initial assessment and needs analysis, to project management, training, coaching and final assessment.&nbsp;</p>
<p style="text-align: justify;">
	In today’s challenging asset management environment, the demand is for a business partner that not only has a strong reputation and broad capability but also the consistency of approach.&nbsp;</p>
<p style="text-align: justify;">
	Our integration of what are typically considered separate functions, such as project management, airworthiness oversight, powerplant services and risk management are all combined to form ten core modules, providing a unique capability&nbsp;</p>
<p style="text-align: justify;">
	<strong>How do you differentiate yourself from other companies?</strong></p>
<p style="text-align: justify;">
	We differentiate ourselves by:&nbsp;</p>
<ul>
	<li style="text-align: justify;">
		Drawing on ‘real world’ experience gained from our involvement in the aftermath of many of the largest aviation accidents and losses during the past 50 years.&nbsp;</li>
	<li style="text-align: justify;">
		Being able to recommend bespoke solutions to mitigate risk based on our work with all the different parties involved in aviation, not just airlines and operators.&nbsp;</li>
	<li style="text-align: justify;">
		Using our international experience gained from working with many different nationalities and cultures, to train and coach organisations on how to achieve the same objectives using alternative methods.&nbsp;</li>
	<li style="text-align: justify;">
		Using our exposure to accident sites and our knowledge of emergency response services to tailor procedures to the reality of what actually happens during these events.&nbsp;</li>
</ul>
<p style="text-align: justify;">
	<strong>The size of your business in Nepal at present?&nbsp;</strong></p>
<p style="text-align: justify;">
	That really depends on how often there is an accident. Unfortunately for some that has been a little too often. If there was to be a reduction in the number of accidents as a result of Airclaims providing Risk Management rather than Claims Management Services then that would be fine with us too. We are currently the preferred aviation claims handling company for the national airline and a number of domestic operators in Nepal and also most International carriers who operate services to Kathmandu. Our presence in Nepal over many decades has enable Airclaims to build up much valued relationships.&nbsp;</p>
<p style="text-align: justify;">
	<strong>Why is the insurance premium in aviation so high in Nepal?&nbsp;</strong></p>
<p style="text-align: justify;">
	There are a number of factors that affect the rate at which the insurance premium is calculated in any market. Some of those factors are loss record, operating environment and the type and value of the aircraft being insured.&nbsp;</p>
<p style="text-align: justify;">
	Nepal is undoubtedly a challenging operating environment for operators and crews in terms of terrain, weather and infrastructure and these factors do mean that along with a loss record that reflects these challenges, insurance costs will be higher. However, with improvements in infrastructure, training and operations, it is quite possible to address many of these factors and in doing so ensure that the cost of insurance is maintained at a reasonable level.&nbsp;</p>
<p style="text-align: justify;">
	There is also the factor of insurance market capacity something which cannot be directly influenced in Nepal. Worldwide, it could be said that there is a good deal of capacity i.e. insurers who want to underwrite aviation risks. Capacity and competition help keep the price down although, Nepal is seen as a higher risk region because of the factors already mentioned above.&nbsp;</p>
<p style="text-align: justify;">
	We know that all parties involved in aviation in Nepal are keen to support the improvements that are needed to ensure risk is reduced and Airclaims are ready to play its part in the provision of not just loss management services but also risk management services.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What are the challenges faced by the aviation insurance business in Nepal?&nbsp;</strong></p>
<p style="text-align: justify;">
	The challengers faced by the aviation insurance business in Nepal are the challenges that face the aviation operators as well. The biggest challenge is to reduce operational risk. Despite the significant challenges that are faced, Nepal is clearly serious in its desire to reduce risk and consequently improve safety. It can be done.&nbsp;</p>
<p style="text-align: justify;">
	The main challenges facing aviation in Nepal are:&nbsp;</p>
<ul>
	<li style="text-align: justify;">
		Infrastructure improvement. There needs to be a significant investment in better basic airport facilities (i.e. runways, navigation aids, etc.)&nbsp;</li>
	<li style="text-align: justify;">
		Weather reporting. There is a requirement for a significant number of automatic weather stations to report the weather being experienced in real time, via satellite link, in the more remote parts of the country.&nbsp;</li>
	<li style="text-align: justify;">
		Better operational control being exercised by the operators. It needs to become a complete team effort especially when difficult decisions are needed associated with dispatch of aircraft in the difficult operational environment that exists.&nbsp;This will become even more important over the next decade or so as the average age and experience levels of pilots are reduced.&nbsp;</li>
	<li style="text-align: justify;">
		More and better training to help reduce the effect of the loss of highly experienced pilots over the next ten years.&nbsp;</li>
</ul>
<p style="text-align: justify;">
	<strong>What can Nepal do to overcome these challenges?&nbsp;</strong></p>
<p style="text-align: justify;">
	The system of regulation that has been in place for the past 50 plus years may have reached its maximum effectiveness. Regulation by requiring compliance with rules and regulations has probably got as good as it will get globally. The adoption of a more proactive and predictive Safety Management System (SMS) is needed by the operators and aviation authorities in Nepal. Having an effective way of safety oversight such as through adoption of a Safety Management System (SMS) has been proved to improve safety and risk management culture. Such a system can be used to support airline owners, airline managers, pilots &amp; engineers and all who are involved in aviation; this includes the regulators who must have a key role in supporting new ways of looking at risk and safety management and oversight.&nbsp;</p>
<p style="text-align: justify;">
	<strong>The annual claims payout in the aviation section has been constantly rising. This is bound to further increase the already significantly high aviation insurance premium. How are we going to tackle this problem?&nbsp;</strong></p>
<p style="text-align: justify;">
	The current global picture is interesting with record low levels of claims for successive years. Unfortunately this trend has not been seen in Nepal. Tackling the problem will require leadership on the part of the regulating authorities towards resetting the scene for risk and safety management such as through improvement in the operational management operators. The regulating authorities can and need to play a leading role in improving oversight and ensuring that all operators are able to take advantage of an open and even handed approach to improvement of infrastructure and operational standards. Operators investing in good safety systems and management should be supported and those that are failing to do this need to be provided with proper advice and if necessary some forms of sanction up to and including withdrawal of AOC.&nbsp;</p>
<p style="text-align: justify;">
	New approaches and thinking will bring positive benefits. We can’t just keep doing business as we have always done and expect things to get better on their own. Change is inevitable in all businesses not least aviation and the benefits to Nepal can be significant in terms of social and economic reward.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What prospects do you see for aviation insurance business in Nepal in the future?&nbsp;</strong></p>
<p style="text-align: justify;">
	The prospects for aviation insurance business in Nepal are bright. There is a capable and knowledgeable local market which has good relationships with the global insurance community. The present level of risk is too high but there are enough insurers willing to support the market, albeit currently at a higher cost than in some other places. What is perceived as the current high cost of insurance can and should be reduced for operators who demonstrate a good safety culture and record, adopt a Safety Management Programme that is working well and can prove that it is making a difference.&nbsp;</p>
<p style="text-align: justify;">
	<strong>Is there anything else that you would like to say?&nbsp;</strong></p>
<p style="text-align: justify;">
	As a leading provider of Claims Handling and Risk and Asset Management Services and with our long association with Nepal aviation, Airclaims can help make a safer environment for all stakeholders in aviation in Nepal, but it has a cost. Therefore, we are ready to work with the leaders of aviation in Nepal to support Nepal in the development of its aviation capability and ambitions with safety as the focus of any plan. Once it happens all of Nepalese society will reap the benefits.&nbsp;</p>',
			'published' => true,
			'created' => '2013-03-16',
			'modified' => '2013-03-16',
			'keywords' => '',
			'description' => 'Nepal is undoubtedly a challenging operating environment for operators and crews in terms of terrain, weather and infrastructure and these factors do mean that along with a loss record that reflects these challenges, insurance costs will be higher.',
			'sortorder' => '751',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 4 => array(
		'Article' => array(
			'id' => '866',
			'article_category_id' => '40',
			'title' => 'Sky Is The Limit For Aviation Insurance In Nepal',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p style="text-align: justify;">
	<img align="right" alt="Prakash Panday, Shikhar Insurance Company Ltd" height="276" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/prakash_panday_cover_feb2013.jpg" style="margin: 0px 0px 0px 10px;" width="235" /></p>
<address style="text-align: right;">
	<strong style="color: rgb(35, 200, 250); font-size: 16px; font-style: normal;">‘Sky is the limit for aviation insurance in Nepal’</strong></address>
<address style="text-align: right;">
	 </address>
<address style="text-align: right;">
	<strong>Dip Prakash Panday</strong></address>
<address style="text-align: right;">
	<strong>CEO</strong></address>
<address style="text-align: right;">
	<strong>Shikhar Insurance Company Ltd</strong></address>
<p>
	 </p>
<p style="text-align: justify;">
	<strong>What is the size of the aviation insurance market in Nepal?</strong></p>
<p style="text-align: justify;">
	The total size of the aviation insurance market of the domestic private sector in Nepal is around USD 8.5 -9 million.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What about your company’s stake in the market?</strong></p>
<p style="text-align: justify;">
	We have around 70-75% market share.</p>
<p style="text-align: justify;">
	<strong>Is it true that the insurance companies have not been able to make profits from the aviation insurance? Why?</strong></p>
<p style="text-align: justify;">
	Aviation Insurance in Nepal has been a loss making portfolio for all the insurers involved. &nbsp;This has been because of the losses in the last couple of years. Nepal is being taken as a high risk zone for aviation insurance.&nbsp;</p>
<p style="text-align: justify;">
	<strong>It is said that some insurance companies are trying to form a pool to collectively handle the aviation insurance claims. What is the latest progress in this regard?</strong></p>
<p style="text-align: justify;">
	It is a very good concept. Reinsurance companies support about 99.5 per cent insurance and only 0.5% is handled by the local insurance companies. The main idea behind forming this pool is to take the advantage of the volume and also to get quality reinsurers so that losses get paid in a timely manner and also to have standardization in all the policies. &nbsp;This can also help in some investment in safety features.&nbsp;</p>
<p style="text-align: justify;">
	<strong>How is this pool going to help the insurance companies, if and when it is formed?</strong></p>
<p style="text-align: justify;">
	It is still in the planning process. Insurance companies and operators have to come together with full support from the regulators before such a pool can be formed. &nbsp;</p>
<p style="text-align: justify;">
	<strong>What future do you see for aviation insurance business in Nepal?</strong></p>
<p style="text-align: justify;">
	Sky is the limit for aviation insurance in Nepal. The only thing is that safety factors have to be improved. Nepal’s aviation sector is classified as the highest risk zone for reinsurers. We want to see Nepal as a safe destination. When a pool of insurers is going to own the overall aviation insurance, more responsibility shall be felt. Risk management is very important.&nbsp;</p>
<p style="text-align: justify;">
	<strong>Almost whatever the insurance companies earn from the aviation segment goes to the reinsurance companies abroad. Some are even said to be making losses in the aviation segment. It is said that the companies know that they are not going to make profits from the aviation segment. But they do aviation insurance just to show high insurance premium collection is. What do you say?</strong></p>
<p style="text-align: justify;">
	We are not sending money, we are transferring risk. The reason that the companies are still in profit is because the money is flowing in from the reinsurers abroad. Since they agreed to take the risk, they bear the losses as well. But after eight consecutive years of losses, they are getting scared. Some of the reinsurers have already withdrawn from the Nepali aviation market.</p>
<p style="text-align: justify;">
	<strong>How can we lower the high insurance premium?</strong></p>
<p style="text-align: justify;">
	It will take time. It is important to win the confidence of the reinsurers and prove that Nepal’s aviation sector is a safe zone for investment. This can be done only by reducing the losses. Fear is a very dangerous thing. Our terrains are difficult, which has sent a wrong perception. Similarly, loss is also a perception and this can be changed. All we need is 2 to 3 years of good loss ratio.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What do you expect from the Beema Samiti or the government for that matter to facilitate the aviation insurance business in the country? &nbsp;</strong></p>
<p style="text-align: justify;">
	It would be great if the Beema Samiti would help in the process of making an Aviation Pool. Active participation and support is required from them and the Civil Aviation Authority of Nepal (CAAN), especially on the safety side. This should not be only on papers but also in practice.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What are the key challenges and issues facing the aviation insurance industry in Nepal?</strong></p>
<p style="text-align: justify;">
	CAAN has to take the lead role. CAAN and the private airline operators should be more alert. There should be an improvement in monitoring flight data, safety infrastructure etc. For example, many airports in Nepal are not black-topped. When the weather is bad, flights should be aborted and airports should be closed. Individual behavior should be monitored by the operators. We also need to invest in training and skill development of the people involved in the aviation business.&nbsp;</p>
<p style="text-align: justify;">
	<strong>The annual claims payout in the aviation section has been constantly rising. This is bound to further increase the already significantly high aviation insurance premium. How are we going to tackle this problem?</strong></p>
<p style="text-align: justify;">
	There should be a considerable investment in safety measures. I feel that the only way out now is to produce good results for the reinsurers. Losses do happen but the frequency of losses in our country is high. If we go jointly, I feel that this will be a good beginning and we can produce significant results. &nbsp;</p>
<p style="text-align: justify;">
	<strong>There are various types of aviation insurance policies in the world. Are all of them available in Nepal?</strong></p>
<p style="text-align: justify;">
	Three basic types of aviation products are available in Nepal. These are basically for Hull, Liability including Passengers and Crew Personnel Accident and Hull War. Hull insurance covers the insurance of aircraft. Till last year, Combined Single Limit Liability insurance required was USD 60 million per aircraft which has now been revised. Hull War insurance is used in case of war, hijacking etc. &nbsp;</p>
<p style="text-align: justify;">
	<strong>The country’s first-ever aviation insurance summit was organized in the capital recently. How helpful was this summit?</strong></p>
<p style="text-align: justify;">
	Reinsurers came to the market and studied it. Their perception has changed. We took them to see our infrastructures including a mountain flight and had discussions on the current issues of the aviation market. We are trying our best to boost the reinsurers’ confidence. We feel that the summit has helped to bring some positive change in their risk perception of our country.</p>
<div style="text-align: justify;">
	 </div>',
			'published' => true,
			'created' => '2013-03-16',
			'modified' => '2013-03-16',
			'keywords' => '',
			'description' => 'The reason that the companies are still in profit is because the money is inflowing from the reinsurers abroad. Since they agreed to take the risk, they bear the losses as well.',
			'sortorder' => '750',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 5 => array(
		'Article' => array(
			'id' => '782',
			'article_category_id' => '40',
			'title' => 'Cover Story January 2013',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p style="text-align: justify;">
<!--[if gte mso 9]><xml>
 <w:WordDocument>
  <w:View>Normal</w:View>
  <w:Zoom>0</w:Zoom>
  <w:TrackMoves/>
  <w:TrackFormatting/>
  <w:AutoHyphenation/>
  <w:PunctuationKerning/>
  <w:ValidateAgainstSchemas/>
  <w:SaveIfXMLInvalid>false</w:SaveIfXMLInvalid>
  <w:IgnoreMixedContent>false</w:IgnoreMixedContent>
  <w:AlwaysShowPlaceholderText>false</w:AlwaysShowPlaceholderText>
  <w:DoNotPromoteQF/>
  <w:LidThemeOther>EN-US</w:LidThemeOther>
  <w:LidThemeAsian>X-NONE</w:LidThemeAsian>
  <w:LidThemeComplexScript>X-NONE</w:LidThemeComplexScript>
  <w:Compatibility>
   <w:BreakWrappedTables/>
   <w:SnapToGridInCell/>
   <w:WrapTextWithPunct/>
   <w:UseAsianBreakRules/>
   <w:DontGrowAutofit/>
   <w:SplitPgBreakAndParaMark/>
   <w:DontVertAlignCellWithSp/>
   <w:DontBreakConstrainedForcedTables/>
   <w:DontVertAlignInTxbx/>
   <w:Word11KerningPairs/>
   <w:CachedColBalance/>
  </w:Compatibility>
  <w:BrowserLevel>MicrosoftInternetExplorer4</w:BrowserLevel>
  <m:mathPr>
   <m:mathFont m:val="Cambria Math"/>
   <m:brkBin m:val="before"/>
   <m:brkBinSub m:val="--"/>
   <m:smallFrac m:val="off"/>
   <m:dispDef/>
   <m:lMargin m:val="0"/>
   <m:rMargin m:val="0"/>
   <m:defJc m:val="centerGroup"/>
   <m:wrapIndent m:val="1440"/>
   <m:intLim m:val="subSup"/>
   <m:naryLim m:val="undOvr"/>
  </m:mathPr></w:WordDocument>
</xml><![endif]-->	<span style="font-size:14px;"><img alt="coverstory" border="1" height="281" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/international.jpg" vspace="10" width="400" /></span></p>
<p class="MsoNormal" style="text-align: justify;">
	<strong><span style="font-size:14px;"><span class="A8"><span style="font-family: ">By Sushila Budhathoki</span></span></span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<strong><span style="font-size:14px;"><span class="A8"><span style="font-family: ">&nbsp;</span></span></span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<strong><span style="font-size:14px;"><span class="A9">International <span style="line-height: 115%; font-family: ">Degrees in Nepal International Degrees in Nepal</span></span></span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<strong><span style="font-size:14px;"><span class="A9"><span style="line-height: 115%; font-family: ">&nbsp;</span></span></span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span class="A16">G</span><span style="color: black;">one are the days when students had no choice but to go abroad for foreign degrees, thanks to the increasing number of foreign educational institutions which are providing internationally recognized education in Nepal.</span><br />
	<br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">With the growing popularity of A Level, international affiliation has become important for the brand value of the Nepali educational institutions. According to the Ministry of Education (MoE), the importance of foreign affiliation for higher education emerged to the fore zone six years ago in BS 2063 and currently there are 87 educational institutions affiliated to foreign institutions. Among them, 36 institutions are providing Bachelor level and above Degrees (see table). Dr Keshav Kumar Shrestha, Executive Director, Curriculum Development Centre (CDC) of Tribhuvan University, says getting affiliations to foreign universities has seen an upsurge in Nepal in recent years. “These institutions are helping students to broaden their knowledge and make them more practical as well as assisting them to complete the courses more efficiently keeping in mind that the world is turning into a global village,” he says.<br />
	<br />
	<img alt="coverstory" border="1" height="314" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/coverstory(4).jpg" vspace="10" width="469" /></span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">These colleges have emerged at a time when going abroad for study has become a common phenomenon. The foreign institutions operating in Nepal are expected to lower this trend as enrolling in these institutions is more accessible and affordable. According to a government publication titled “Nepal Education in Figures 2012”, a total of 11,912 students applied for permission to go to 53 different countries during fiscal year 2011/12. Among them, 3,759 were female and 8153 were male students. Samjana Basnyat, Principal of International School of Tourism and Hotel Management, says, “As education is vital, a degree from a reputed institution is a feather in your cap. General Nepalis cannot afford to go abroad for higher studies.”</span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">International exposure is one of the factors that helps to make an individual qualified globally. The foreign-affiliated institutions in the country provide an international exposure as well as an international degree to the students. They get the same certificate which the students who go abroad can hope to get. According to Kshitij Regmi, Business Development Director at Islington College, though the fee structure of the foreign-affiliated colleges is a little higher than that of the other local colleges, the students get double advantage when they enroll in foreign-affiliated institutions like Islington. He says, “We are giving a world class British degree here in Nepal and for that we have world class infrastructure and resources. Getting the same degree in Europe requires a lot of resources and is unmatched to what we give here.”</span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">Islington College runs BBA and other specialized courses like BIT- Bachelor in Multi-media, Computing, Networking and IT Security. The college produces 300 plus graduates a year. Regmi adds, “Education is an investment. Now the students have to start building a career right after the Bachelor level unlike till the recent past when one would not bother about a career before completing the Master level. Therefore, they have to invest more to learn earlier and faster. And it’s not only money that they are expected to invest in their education; they need to invest time and planned efforts as well.”<br />
	<br />
	<br />
	<img alt="featured" border="1" height="1002" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/foregin.jpg" vspace="10" width="500" /></span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">The demand for higher level education is growing in Nepal is apparent in the statistics on the students’ number in Nepal. More than 300,000 students appear in the SLC exam every year, and about half of them pass it. Around 100,000 pass the +2 level every year. However, the number of educational institutes providing higher level studies is insufficient to accommodate them all. According to Nepal Education in Figures 2012, there are 9 universities and 3383 higher secondary schools - 2,499 public and 884 private schools. Similarly, there are 1,102 colleges of the universities including 90 public and 1,012 private colleges, 3 medical institutions and 418 Technical Education and Vocational Training (TEVT) institutions. At the existing universities, which offer education up to the PhD level, faculties like humanities, management, education, science and technology and engineering are popular among the students. The international institutions operating in Nepal have included varieties of courses in these fields in addition to other international courses.<br />
	<br />
	<br />
	<img alt="coverstory" border="1" height="169" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/coverstory12.jpg" vspace="10" width="292" /></span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">The education ministry says, while granting permission to students to go abroad or to foreign institutions to open their affiliated institutions here, it gives priority to the subjects which are rare at the Nepali educational institutes. There are different courses for the students to choose from in the fields of management, Information Technology, Hospitality, Science, Computer Science and Fashion Designing. Some of the colleges also run specialized courses. For example, Kathmandu Forestry College runs M.Sc.in Geo- Information; International School of Tourism and Hotel Management runs Master of Innovation and Management in Tourism. Similarly, such institutions are running courses as per the need of time and market. As there is a high demand particularly in the field of management, many of these colleges are running BBA or MBA classes. Human biology is the latest course that is popular among the students.<br />
	<br />
	<br />
	<img alt="coverstory" border="1" height="439" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/coverstory1.jpg" vspace="10" width="450" /></span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">Dr Dev Raj Adhikari, Dean of Central Department of Management, Tribhuvan University (he is also a member of the Expert Committee formed under the Ministry of Education for the monitoring and evaluation of foreign universities), feels the need for welcoming good foreign universities since the trend of global education has already started. According to him, as we have entered into the WTO regime, it is not appropriate to restrict foreign universities from coming to Nepal. He says, “The presence of top quality universities in Nepal will encourage Nepali universities to raise their standards and be on a par with their foreign counterparts. It will also motivate Nepali colleges to increase the quality of their education in order to compete and sustain in the market.”</span></span></p>
<p class="MsoNormal" style="text-align: justify;">
	<strong><span style="font-size:14px;">&nbsp;</span></strong></p>
<p class="Pa15" style="margin-top: 5pt; text-align: justify;">
	<strong><span style="font-size:14px;"><span style="color: black;">Growing popularity</span></span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">The institutions are running international courses particularly because of the demand driven market. According to Biplav Singh, Senior Programme Manager at King’s College, the trend of enrolling in foreign institutions is increasing fast. King’s College which started BBA classes in 2009 has produced 12 MBA graduates and the number of intake this year is 66. Similarly, Lord Buddha Education Foundation which started MBA classes in 2000 has produced around 400 MBA graduates. Dr Tulasi Thapaliya, Under Secretary at the Ministry of Education, says these institutions are fulfilling the demand of those students who are opting for internationally recognized courses. He says, “Colleges are coming to us for the approval of a range of subjects. The colleges also see huge prospects in these courses. That is why they are investing huge amounts to establish their institutions.”</span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">High chances of job placement after the completion of the courses are also luring the students. Timely completion of the courses and possibility of credit transfer to a college abroad are the other attractions. Many colleges are providing skill development trainings beyond their academic courses to enable the students to compete in the international market. King’s College runs an MBA entrepreneurship course for those who are running their own business or planning to start a business on their own. Singh says, “We are working intensively for the placement of our graduates in the job market. We have already started Chinese language classes and a 2-year compulsory English class for MBA students.” Similarly, Islington College organizes job fairs where they call the prospective employers and the chances of students getting jobs are high. Regmi says, “Co-operation from the government and job providers is increasing. Currently we have tie-ups with many national and multinational companies for student placement and internship programmes. Some of our students are earning more than Rs 200,000 per month.”<br />
	<br />
	<br />
	<br />
	<img alt="coverstory" border="1" height="216" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/coverstroy13.jpg" vspace="10" width="193" /></span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">Started in 2004, International School of Tourism and Hotel Management basically produces hotel management graduates, Many of its students are working at the assistant or even executive level positions in many five star hotels in Nepal and abroad, according to Samjana Basnyat, Principal of the College. She says, “We focus on shaping the overall personality of the students because inculcating positive attitude is a must in today’s competitive age. This positive attitude does make an individual far more superior than others.” The college has a high number of students in Higher Diploma in Hotel Management (Equivalent to Bachelors Degree) course.</span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">Many of these colleges are providing full time faculty support which helps students learn beyond their curriculum. The resource centers of these colleges like libraries, computer-labs, science-labs etc are also available full time. Some colleges are offering customized curricula to suit the needs and demand of the Nepali market. Courses like Diploma in Hotel and Restaurant Management, Bachelor in Hotel and Catering Management, Diploma in Travel and Tourism Management etc are being provided by these institutions as the tourism sector is seeing a shortage of qualified manpower. On the other hand, some courses are more advanced than that of Nepali universities, especially the courses offered by the British and American universities. However, the curriculum is not everything about the offered courses, say the experts. Adhikari says, “The quality of faculty and teaching- learning methodology plays a crucial role in setting the quality of the offered degrees. The quality of graduates is equally dependent on the quality of faculty members and the quality of pedagogy practiced.”</span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><strong>&nbsp;<img alt="coverstory 2012" border="1" height="284" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/coverstroy14.jpg" vspace="10" width="260" /></strong></span></p>
<p style="text-align: justify;">
	 </p>
<p class="MsoNormal" style="text-align: justify;">
	<strong><span style="font-size:14px;"><span style="color: black;">Weak monitoring<br />
	</span>&nbsp; <br />
	</span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">The growing demand has led to some unethical practices too. Some colleges are found admitting students beyond their capacities and running courses without any government approval. In September 2012, some 72 colleges across the country including some foreign institutes were found running management, IT and natural science courses without approval from the MoE. Among them, many were reputed foreign institutes and renowned colleges. San Institute of Nursing, the first institute to get foreign affiliation, lost its good reputation when the college could not run smoothly. The college established in 2060 BS (some nine years ago) closed down soon after producing its first batch. According to Basnyat, the failure of the international educational institutes in maintaining academic discipline is becoming a threat for the education sector. She says, “The international educational institutes in Nepal should emphasize on quality education. Failure to maintain academic discipline and merely going for quantity will take us nowhere.”</span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">The government publishes the list of colleges affiliated to foreign institutions after providing affiliations and permission for operating in Nepal. Dr Tulasi Thapaliya, says, “It is high time that we started regulating these international institutions so that they could offer quality education in Nepal.” Many of the parents and students are unaware of the fact that if the institution has not got its courses or curriculum approved from the government, the institution or the course becomes invalid and the students will not get the degree. Without government authorization, the degrees are not recognized. By law, the institutions need government permission before adding courses or branches. However, there are many instances of the colleges not following the rules. Some of the colleges have been found to collect fees from the students or publish advertisements without any assurance that the classes will actually start. Likewise, many of these colleges are offering courses that are beyond their capacity and without permission from the authorities while some are busy in promotions rather than providing quality education.</span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">The ‘Directive for Foreign Educational Institutions Running Higher Level Education, 2059’ has laid down the requirements and procedures needed to be followed to run such colleges. There are provisions laid down in the directive to apply for opening an institution, getting foreign affiliation and adding courses and programmes. The directive has also set down the rules for human resource requirement in the institution, credibility of the university concerned and the relevance of the courses offered in Nepal. However, it is a different matter that MoE has not been able to handle these issues properly.<br />
	<br />
	<br />
	<img alt="cover story january 2012" border="1" height="324" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/glacier15.jpg" vspace="10" width="284" /></span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">Foreign educational institutions that want to operate in Nepal must be accredited by the law of the country of origin, according to the existing Nepali law. The institutes cannot close down its operation before the end of the academic year. They should be purely educational institutions and should follow the directives of 2059 BS. There are norms for all educational institutes. For example, there are separate specific norms set for GCE A Level, Engineering B.E. &amp; IT, Nursing and Hotel Management. There is a committee at the Ministry of Education (MoE) to scrutinize the quality of the international degrees offered in Nepal and the foreign universities that the Nepali colleges are affiliated to. But the committee has not been able to carry out its responsibilities, say the critics. They also point out that many of the colleges are violating the norms. Moreover, they also complain that there is no law to penalize such colleges operating without the government’s approval. The existing Education Act 1971 lacks clear provisions to check such lawbreakers. A bill to amend the Act awaits the parliament’s go-ahead.</span> <br />
	</span></p>
<p style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">Although the international courses have good credibility in the international market, freedom to choose and decide the curriculum by colleges themselves may invite negative consequences, say the experts. They further add that it is necessary to carefully inspect and monitor the standard and quality of pedagogy and courses introduced here. There is an academic council at TU that develops the courses to be run by Nepali colleges. The council also helps to implement the courses developed by foreign universities in Nepal. Dr Shrestha says, “We have also kept in mind the need for course revision at every department. Such courses should also meet national and international market demand.” <br />
	</span></span><span style="font-size:14px;"> </span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">There are many foreign-affiliated colleges in Nepal that are having administrative problems. “Many colleges are in the reviewing process due to the lack of documents. And many of them have been suspended for their failure to prove credibility,” says an officer at MoE, requesting anonymity. According to him, weak monitoring and regulation has helped these colleges to run without proper documentation, infrastructure, capacity, credibility and meeting other required criteria. There is no clear policy on the number of faculties and programmes a colleges can run. The MoE officer adds,” We are reviewing all these colleges for their exact status.” On the other hand, the institutions say that the red tapism in the Nepali bureaucracy is the main problem in timely the updating of their statuses.<br />
	<br />
	<br />
	<img alt="coverstory" border="1" height="198" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/hospital.jpg" vspace="10" width="182" /></span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">A lot of problems are seen in the tuition fees that these institutions raise. There are different fee structures for different faculties. The fees also vary from college to college. Many of these colleges have not properly mentioned how much fee is collected from each student. However, according to Roj Nath Pandey, Assistance Spokesperson for the MoE, there are no written complaints against these institutions for taking high tuition fees. He says, “We would instantly take action if any complaint is lodged in this regard. They cannot take fees more than what they have mentioned in their applications seeking our approval for the course.”&nbsp;&nbsp;</span></span></p>
<p class="MsoNormal" style="text-align: justify;">
	<strong><span style="font-size:14px;"><span style="color: black;">The way forward</span></span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">Many of these colleges have just started their sessions and the results are yet to come. Yet, it should be recognized that these emerging affiliates of international institutions have raised the hope of developing Nepal as an international education hub. “If we carry forward the mission to fulfill this dream, it is possible to make Nepal an educational hub,” opines Dr Shrestha. According to him, the basic infrastructure to develop Nepal as an education hub must be there and the academic calendar should be updated. He says, “Activities like padlocking and protests at TU are a huge setback to this mission. The resources within the universities should be well managed first to start the mission of developing the country into an international education hub. Also, a timely change in the curriculum is a must.”</span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">International affiliations have also opened the door to the international training institutes. Linked with The London Chamber of Commerce and Industry (LCCI), LCCI Nepal has been working with around 15 colleges, mostly with foreign affiliation. “Ours is a new initiative. We work in the Nepali education sector as an outsourced knowledge provider. Our training enables students to gain knowledge beyond the course. They can work in whichever country they go because they are trained professionally,” shares Dikshanta Bhatta, Assistant Manager at LCCI Nepal. He adds, “Our programmes are so popular that we are now targeting also the colleges that are affiliated to Nepali universities.”</span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">The college operators are also hopeful of a bright future in Nepal. They believe that if they focus on providing quality education to the Nepali students and offer a moderate fee structure, they will be able to get enough number of students. Regmi says, “Nepal is a strategically located country. It has good links to various countries including neighbouring India, China, Pakistan and Bangladesh. Technical subjects such as IT have good prospects.” He demands policies facilitating the global system which he says is a basic requirement of the global market. Regmi says, “We are in an open market and have a dynamic future. We could work better than this if we had more friendly policies.”</span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">The MoE, on the other hand, is planning to intensify the monitoring process this year. Dr Thapaliya Says, “Now we are taking action against some of the colleges which are found admitting more students than they can effectively handle. We are also reviewing the performances of these colleges.” The Supreme Court has also recently issued an 11-point order seeking to regulate the freewheeling private schools and colleges including the foreign institutions in response to a writ filed by advocates. This verdict will have a strong impact on the colleges which are not performing well.</span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="line-height: 115%; color: black;">Some of the institutions are also conducting monitoring and evaluation by themselves for quality assurance. However, the bad image of some colleges is casting a shadow on the good private colleges operating in Nepal under affiliation from foreign universities. The colleges, too, are afraid that the wrong deeds of a few colleges might ruin all of them. Basnyat shares, “Our plan is to keep upgrading ourselves in terms of infrastructure, quality education etc and provide the necessary facilities to the students as well as increase collaboration with the international players and get affiliations from different hospitality outlets so that our graduates could get multiple avenues.”</span></span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="line-height: 115%; color: black;">&nbsp;</span></span></p>
<p class="MsoNormal" style="text-align: justify;">
	<strong><span style="font-size:14px;"><span class="A3">‘There is a need to regulate and maintain foreign colleges to </span><span class="A3">prevent unfair </span><span class="A3"><span style="line-height: 115%; font-family: ">Competition’</span></span></span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<strong><span style="font-size:14px;"><span class="A3"><span style="line-height: 115%; font-family: "><br />
	&nbsp;<img alt="tulsi" border="1" height="307" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/tulsi.jpg" vspace="10" width="269" /></span></span></span></strong></p>
<address>
	<span style="font-size:12px;"><strong><span style="color: black;">DR TULASI THAPALIYA </span></strong></span></address>
<address>
	<span style="font-size:12px;"><strong><span class="A0" style="">Under Secretary </span></strong></span></address>
<address>
	<span style="font-size:12px;"><strong><span class="A0" style=""><span style="line-height: 115%;">Ministry of Education</span></span></strong></span></address>
<p class="MsoNormal" style="text-align: justify;">
	<strong style="font-size: 14px;"><span style="color: black;">How did the trend of establishing colleges with international affiliations begin in Nepal?</span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">Globalization of education compelled many countries to run academic programmes which are popular internationally. The charm of studying foreign courses in one’s own country and getting a certificate recognized globally at the end is high in any country. It looks so normal today that it has become something of a trend. Nepal, too, could not remain unaffected from this charm as more and more colleges in Asia started introducing international courses through affiliations with foreign colleges/universities. Nepal took its cue from this international trend.</span><br />
	<br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><strong><span style="color: black;">What has been the contribution of these foreign affiliated colleges? Has the Ministry made any evaluation?</span>&nbsp; </strong><br />
	</span></p>
<p class="Pa10" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">The Ministry is yet to carry out any evaluation of that sort. However, there are some good aspects that these colleges have brought about. For example, the students in Nepal have exposure to international curricula. They don’t need to go abroad for the foreign courses which are already available in Nepal, thanks to these foreign-affiliated colleges. Another advantage is that they get choices in the curriculum. And the most important thing is that the institutions providing higher education in Nepal can learn from the experiences of these foreign-affiliated colleges.</span></span></p>
<p class="MsoNormal" style="text-align: justify;">
	<strong><span style="font-size:14px;"><span style="color: black;"><br />
	</span></span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<strong><span style="font-size:14px;"><span style="color: black;">How does the MoE monitor the foreign-affiliated colleges?</span></span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">We have a monitoring mechanism. There is a committee at the MOE to monitor these institutions. We are planning to intensify the monitoring process this year. The monitoring process will be more regular in the days to come.</span><br />
	<br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><strong><span style="color: black;">What are the criteria for permitting colleges to get foreign affiliations?</span> <br />
	</strong></span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">Colleges in Nepal are running international courses because of the market demand. If there were no students demanding these courses, then these institutions would not come to us to get these courses approved by the ministry. The MoE gives the approval for these courses but this approval is subject to consent from the University Grant Commission.</span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">There are a number of criteria for getting foreign affiliations for Colleges. The process begins with the institutions wishing to run the academic programmes of international universities applying to the MoE. Their applications must include the consent of the University Grant Commission and other professional bodies. Then we observe the overall status of the applying colleges. We have a scrutiny mechanism to see whether the college is really in a position to offer the intended courses or not. We look at their physical facilities, infrastructure, human resource, credibility and validity of the international institutions offering affiliations.</span> <br />
	</span></p>
<p style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">Sometimes, the foreign institutions offering affiliations to Nepali institutions may not have much credibility back in their own countries. We also consider the demand of the said courses in Nepal. Particularly, we encourage those courses that are not offered by the Nepali universities. These are some of the conditions and criteria that we follow. There is a guideline already approved by the cabinet that the criteria in detail. </span><br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><strong><span style="color: black;">There are a range of subjects from management and hospitality to information technology to culinary arts. But many of the foreign-affiliated colleges are running BBA or MBA classes. Why?</span> <br />
	</strong></span></p>
<p style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">It is not about the BBA or MBA classes; it is about the demand of the students. However, there are two different ways of regulating and managing educational programmes. One, you could run trial courses to see what courses are in demand. The other option is the colleges come forward with proposals seeking approval for the courses they want to teach. The main idea is the demand for the subject by the students. If the demand rises, these subjects could be offered by many colleges. Yesterday only, I got a proposal for running micro-biology classes by one of the colleges. Many colleges are planning to run different management courses. </span></span><span style="font-size:14px;"> </span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa23" style="margin-top: 5pt; text-align: justify;">
	<span style="font-size:14px;"><strong><span style="color: black;">It is often complained that foreign affiliations are hampering the higher education system in Nepal. What do you have to say? </span></strong></span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">There are two sides to this complaint. One is because of the rise in the number of foreign affiliated colleges, many students are choosing them instead of colleges that teach courses of Nepali universities. This could be affecting the education system of Nepal.</span> <br />
	</span></p>
<p class="Pa23" style="margin-top: 5pt; text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">The other side is a positive one. The existing colleges and universities in Nepal get the chance to learn from the foreign-affiliated colleges and their new courses. Foreign-affiliated colleges can create an environment of completion where the colleges teaching courses of Nepali varsities, too, can become innovative in their courses and/ or curricula. Of course, there is a need to regulate these institutions properly to prevent unfair competition.<br />
	<br />
	<br />
	</span><strong><span style="color: black;"> </span></strong></span></p>
<p class="Pa23" style="margin-top: 5pt; text-align: justify;">
	<span style="font-size:14px;"><strong><span style="color: black;">It is said that the trend to go abroad for studies among Nepali students would have been low had there been foreign-affiliated colleges in Nepal in the past, say as back as a decade or so? What do you think?</span></strong></span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">It could have, perhaps, but I am not sure. It’s not only for the reason of education that the Nepali students go for abroad studies; there are other reasons as well. For example, they go abroad to earn while they learn. They might even want to learn beyond the courses they are enrolled to. Students even go to different countries to learn the same courses; they pick the country of their choice. International exposure and other opportunities are other important factors behind the current trend of going for abroad studies.</span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="line-height: 115%; color: black;">So, the presence of foreign-affiliated colleges in Nepal may not lower the abroad study graph very drastically. It could, however, contribute to some extent in lowering the number of students going abroad for studies. But it cannot completely stop the trend.</span></span></p>
<p class="MsoNormal" style="text-align: justify;">
	 </p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:16px;"><span style="line-height: 115%; color: black;">&nbsp;</span></span><strong style="font-size: 16px;"><span class="A3">‘Timely revision of <span style="line-height: 115%; font-family: ">curriculum is a must’</span></span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span class="A3"><span style="line-height: 115%; font-family: "><img alt="keshav" border="1" height="305" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/keshavkumar.jpg" vspace="10" width="300" /><br />
	</span></span></span></p>
<address>
	<span style="font-size:14px;"><strong><span style="color: black;">DR KESHAV KUMAR SHRESTHA </span></strong></span></address>
<address>
	<span style="font-size:14px;"><strong><span class="A0">Executive Director </span></strong></span></address>
<address>
	<span style="font-size:14px;"><strong><span class="A0"><span style="line-height: 115%; font-family: ">Curriculum Development Centre (CDC), TU</span></span></strong></span></address>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><strong><span class="A0"><span style="line-height: 115%; font-family: ">&nbsp;</span></span></strong></span></p>
<p class="MsoNormal" style="text-align: justify;">
	<strong style="font-size: 14px;"><span style="color: black;">Why do Nepali colleges need affiliations with foreign universities?</span></strong></p>
<p style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">Nepali colleges have joined the trend of getting affiliated to foreign universities lately. The foreign courses taught by these colleges have helped the Nepali students in broadening their knowledge and getting, perhaps, more practical education. Today, the world has become a global village; everything is globalised, including education. Colleges in one country get affiliated with foreign universities in order to teach foreign courses. This trend has helped the Nepali students in more than one way. </span><br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa23" style="margin-top: 5pt; text-align: justify;">
	<strong><span style="font-size:14px;"><span style="color: black;">Why doesn’t the CDC develop such courses on its own? </span></span></strong></p>
<p style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">Tribhuvan University has its own way and process of developing curricula. CDC develops courses on the basis of their need. For example, if there is a four-year course, we discuss its merits and demerits in depth. With the teamwork of ‘subject committees’, CDC not only develops curricula but also conducts seminars, orientation programmes and workshops to help the teaching and learning of foreign courses in the country. We are also careful about updating and even revising the TU courses from time to time. There is an Academic Council at TU that oversees the course developing process. Such courses should also meet national and international market interests. I think TU needs to implement the credit hours requirement system for its courses too. </span><br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><strong><span style="color: black;">Are the foreign courses beneficial for the Nepali students in the long run?</span></strong> <br />
	</span></p>
<p class="Pa10" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">There are professional as well as academic benefits for the Nepali students from the foreign courses. These courses also ensure better career opportunities and future for the students. </span></span></p>
<p style="text-align: justify;">
	<strong><span style="font-size:14px;"><span style="color: black;"><br />
	What are the possibilities of developing Nepal into an educational hub?</span></span><br />
	</strong></p>
<p class="Pa10" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">This is a broad topic to discuss. First, we need the basic infrastructure to develop Nepal as an education hub. The academic calendar should be updated and other new changes should be introduced. Recent activities like padlocking and protests happening at TU are a huge setback to such a m mission. Before Nepal can be developed into an international education hub, we should be able to manage the resources within the Nepali universities well. And, I repeat, timely changes in the curricula are a must. </span></span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;">&nbsp;</span></p>
<p style="text-align: justify;">
	<span style="font-size:14px;"><strong><span style="color: black;">How is CDC supporting the students’ educational freedom to take courses of their choice?</span></strong> </span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">We definitely pay attention to the interests of the students by keeping ourselves abreast with the market demand. The basic thing here is to enhance the quality of education. The students are given utmost freedom to choose from the available courses. TU has eight-semester BBA and four-semester MBA courses. Along with the freedom, the students should not forget the competition in the market and the credibility of the available courses.</span></span></p>
<p class="MsoNormal" style="text-align: justify;">
	<strong><span style="font-size:14px;">&nbsp;</span></strong></p>
<p class="Pa23" style="margin-top: 5pt; text-align: justify;">
	<strong><span style="font-size:14px;"><span style="color: black;">What changes in TU courses is CDC bringing in the coming days?</span></span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">A change may not always mean an immediate broad adjustment. We change existing courses or introduce new ones by analyzing the needs and demands in the market. For example, we have paid much attention to developing and bringing new courses in of Information Technology, Hotel Management, BBA and others. There is a demand for these courses as they are more likely to give the students a secured career.</span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<strong><span style="font-size:14px;">&nbsp;</span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<strong><span style="font-size:14px;"><span style="color: black;">There is a common complaint that the annual system hasn’t work well in the education sector. What is CDC doing to address this complaint?</span> <br />
	</span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">The annual system focuses on mass education. However, it needs to be changed according to time. Recently, we have developed a new course, Tea Technology and Management (BSC Tea Technology), at Mechi Multiple Campus, Jhapa.</span> <br />
	</span></p>
<p style="text-align: justify;">
	<span style="font-size:14px;"><br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><strong><span style="color: black;">Are the foreign courses more practical and skill-oriented?</span> <br />
	</strong></span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="line-height: 115%; color: black;">The most important thing is that these courses have a good reputation in the market. However, it is also true that only a few percent of fresh graduates get good jobs in the market. So, it’s high time to ensure the production of quality and competitive manpower by domestic as well as foreign-affiliated colleges.</span></span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;">&nbsp;</span></p>
<p style="text-align: justify;">
<!--[if gte mso 9]><xml>
 <w:LatentStyles DefLockedState="false" DefUnhideWhenUsed="true"
  DefSemiHidden="true" DefQFormat="false" DefPriority="99"
  LatentStyleCount="267">
  <w:LsdException Locked="false" Priority="0" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Normal"/>
  <w:LsdException Locked="false" Priority="9" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="heading 1"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 2"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 3"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 4"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 5"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 6"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 7"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 8"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 9"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 1"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 2"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 3"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 4"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 5"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 6"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 7"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 8"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 9"/>
  <w:LsdException Locked="false" Priority="35" QFormat="true" Name="caption"/>
  <w:LsdException Locked="false" Priority="10" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Title"/>
  <w:LsdException Locked="false" Priority="1" Name="Default Paragraph Font"/>
  <w:LsdException Locked="false" UnhideWhenUsed="false" Name="Body Text"/>
  <w:LsdException Locked="false" Priority="11" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Subtitle"/>
  <w:LsdException Locked="false" Priority="22" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Strong"/>
  <w:LsdException Locked="false" Priority="20" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Emphasis"/>
  <w:LsdException Locked="false" Priority="59" SemiHidden="false"
   UnhideWhenUsed="false" Name="Table Grid"/>
  <w:LsdException Locked="false" UnhideWhenUsed="false" Name="Placeholder Text"/>
  <w:LsdException Locked="false" Priority="1" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="No Spacing"/>
  <w:LsdException Locked="false" Priority="60" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Shading"/>
  <w:LsdException Locked="false" Priority="61" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light List"/>
  <w:LsdException Locked="false" Priority="62" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Grid"/>
  <w:LsdException Locked="false" Priority="63" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 1"/>
  <w:LsdException Locked="false" Priority="64" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 2"/>
  <w:LsdException Locked="false" Priority="65" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 1"/>
  <w:LsdException Locked="false" Priority="66" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 2"/>
  <w:LsdException Locked="false" Priority="67" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 1"/>
  <w:LsdException Locked="false" Priority="68" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 2"/>
  <w:LsdException Locked="false" Priority="69" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 3"/>
  <w:LsdException Locked="false" Priority="70" SemiHidden="false"
   UnhideWhenUsed="false" Name="Dark List"/>
  <w:LsdException Locked="false" Priority="71" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Shading"/>
  <w:LsdException Locked="false" Priority="72" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful List"/>
  <w:LsdException Locked="false" Priority="73" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Grid"/>
  <w:LsdException Locked="false" Priority="60" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Shading Accent 1"/>
  <w:LsdException Locked="false" Priority="61" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light List Accent 1"/>
  <w:LsdException Locked="false" Priority="62" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Grid Accent 1"/>
  <w:LsdException Locked="false" Priority="63" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 1 Accent 1"/>
  <w:LsdException Locked="false" Priority="64" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 2 Accent 1"/>
  <w:LsdException Locked="false" Priority="65" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 1 Accent 1"/>
  <w:LsdException Locked="false" UnhideWhenUsed="false" Name="Revision"/>
  <w:LsdException Locked="false" Priority="34" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="List Paragraph"/>
  <w:LsdException Locked="false" Priority="29" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Quote"/>
  <w:LsdException Locked="false" Priority="30" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Intense Quote"/>
  <w:LsdException Locked="false" Priority="66" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 2 Accent 1"/>
  <w:LsdException Locked="false" Priority="67" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 1 Accent 1"/>
  <w:LsdException Locked="false" Priority="68" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 2 Accent 1"/>
  <w:LsdException Locked="false" Priority="69" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 3 Accent 1"/>
  <w:LsdException Locked="false" Priority="70" SemiHidden="false"
   UnhideWhenUsed="false" Name="Dark List Accent 1"/>
  <w:LsdException Locked="false" Priority="71" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Shading Accent 1"/>
  <w:LsdException Locked="false" Priority="72" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful List Accent 1"/>
  <w:LsdException Locked="false" Priority="73" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Grid Accent 1"/>
  <w:LsdException Locked="false" Priority="60" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Shading Accent 2"/>
  <w:LsdException Locked="false" Priority="61" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light List Accent 2"/>
  <w:LsdException Locked="false" Priority="62" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Grid Accent 2"/>
  <w:LsdException Locked="false" Priority="63" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 1 Accent 2"/>
  <w:LsdException Locked="false" Priority="64" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 2 Accent 2"/>
  <w:LsdException Locked="false" Priority="65" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 1 Accent 2"/>
  <w:LsdException Locked="false" Priority="66" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 2 Accent 2"/>
  <w:LsdException Locked="false" Priority="67" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 1 Accent 2"/>
  <w:LsdException Locked="false" Priority="68" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 2 Accent 2"/>
  <w:LsdException Locked="false" Priority="69" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 3 Accent 2"/>
  <w:LsdException Locked="false" Priority="70" SemiHidden="false"
   UnhideWhenUsed="false" Name="Dark List Accent 2"/>
  <w:LsdException Locked="false" Priority="71" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Shading Accent 2"/>
  <w:LsdException Locked="false" Priority="72" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful List Accent 2"/>
  <w:LsdException Locked="false" Priority="73" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Grid Accent 2"/>
  <w:LsdException Locked="false" Priority="60" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Shading Accent 3"/>
  <w:LsdException Locked="false" Priority="61" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light List Accent 3"/>
  <w:LsdException Locked="false" Priority="62" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Grid Accent 3"/>
  <w:LsdException Locked="false" Priority="63" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 1 Accent 3"/>
  <w:LsdException Locked="false" Priority="64" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 2 Accent 3"/>
  <w:LsdException Locked="false" Priority="65" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 1 Accent 3"/>
  <w:LsdException Locked="false" Priority="66" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 2 Accent 3"/>
  <w:LsdException Locked="false" Priority="67" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 1 Accent 3"/>
  <w:LsdException Locked="false" Priority="68" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 2 Accent 3"/>
  <w:LsdException Locked="false" Priority="69" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 3 Accent 3"/>
  <w:LsdException Locked="false" Priority="70" SemiHidden="false"
   UnhideWhenUsed="false" Name="Dark List Accent 3"/>
  <w:LsdException Locked="false" Priority="71" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Shading Accent 3"/>
  <w:LsdException Locked="false" Priority="72" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful List Accent 3"/>
  <w:LsdException Locked="false" Priority="73" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Grid Accent 3"/>
  <w:LsdException Locked="false" Priority="60" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Shading Accent 4"/>
  <w:LsdException Locked="false" Priority="61" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light List Accent 4"/>
  <w:LsdException Locked="false" Priority="62" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Grid Accent 4"/>
  <w:LsdException Locked="false" Priority="63" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 1 Accent 4"/>
  <w:LsdException Locked="false" Priority="64" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 2 Accent 4"/>
  <w:LsdException Locked="false" Priority="65" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 1 Accent 4"/>
  <w:LsdException Locked="false" Priority="66" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 2 Accent 4"/>
  <w:LsdException Locked="false" Priority="67" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 1 Accent 4"/>
  <w:LsdException Locked="false" Priority="68" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 2 Accent 4"/>
  <w:LsdException Locked="false" Priority="69" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 3 Accent 4"/>
  <w:LsdException Locked="false" Priority="70" SemiHidden="false"
   UnhideWhenUsed="false" Name="Dark List Accent 4"/>
  <w:LsdException Locked="false" Priority="71" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Shading Accent 4"/>
  <w:LsdException Locked="false" Priority="72" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful List Accent 4"/>
  <w:LsdException Locked="false" Priority="73" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Grid Accent 4"/>
  <w:LsdException Locked="false" Priority="60" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Shading Accent 5"/>
  <w:LsdException Locked="false" Priority="61" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light List Accent 5"/>
  <w:LsdException Locked="false" Priority="62" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Grid Accent 5"/>
  <w:LsdException Locked="false" Priority="63" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 1 Accent 5"/>
  <w:LsdException Locked="false" Priority="64" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 2 Accent 5"/>
  <w:LsdException Locked="false" Priority="65" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 1 Accent 5"/>
  <w:LsdException Locked="false" Priority="66" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 2 Accent 5"/>
  <w:LsdException Locked="false" Priority="67" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 1 Accent 5"/>
  <w:LsdException Locked="false" Priority="68" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 2 Accent 5"/>
  <w:LsdException Locked="false" Priority="69" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 3 Accent 5"/>
  <w:LsdException Locked="false" Priority="70" SemiHidden="false"
   UnhideWhenUsed="false" Name="Dark List Accent 5"/>
  <w:LsdException Locked="false" Priority="71" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Shading Accent 5"/>
  <w:LsdException Locked="false" Priority="72" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful List Accent 5"/>
  <w:LsdException Locked="false" Priority="73" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Grid Accent 5"/>
  <w:LsdException Locked="false" Priority="60" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Shading Accent 6"/>
  <w:LsdException Locked="false" Priority="61" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light List Accent 6"/>
  <w:LsdException Locked="false" Priority="62" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Grid Accent 6"/>
  <w:LsdException Locked="false" Priority="63" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 1 Accent 6"/>
  <w:LsdException Locked="false" Priority="64" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 2 Accent 6"/>
  <w:LsdException Locked="false" Priority="65" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 1 Accent 6"/>
  <w:LsdException Locked="false" Priority="66" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 2 Accent 6"/>
  <w:LsdException Locked="false" Priority="67" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 1 Accent 6"/>
  <w:LsdException Locked="false" Priority="68" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 2 Accent 6"/>
  <w:LsdException Locked="false" Priority="69" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 3 Accent 6"/>
  <w:LsdException Locked="false" Priority="70" SemiHidden="false"
   UnhideWhenUsed="false" Name="Dark List Accent 6"/>
  <w:LsdException Locked="false" Priority="71" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Shading Accent 6"/>
  <w:LsdException Locked="false" Priority="72" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful List Accent 6"/>
  <w:LsdException Locked="false" Priority="73" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Grid Accent 6"/>
  <w:LsdException Locked="false" Priority="19" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Subtle Emphasis"/>
  <w:LsdException Locked="false" Priority="21" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Intense Emphasis"/>
  <w:LsdException Locked="false" Priority="31" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Subtle Reference"/>
  <w:LsdException Locked="false" Priority="32" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Intense Reference"/>
  <w:LsdException Locked="false" Priority="33" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Book Title"/>
  <w:LsdException Locked="false" Priority="37" Name="Bibliography"/>
  <w:LsdException Locked="false" Priority="39" QFormat="true" Name="TOC Heading"/>
 </w:LatentStyles>
</xml><![endif]--><!--[if gte mso 10]>
<style>
 /* Style Definitions */
 table.MsoNormalTable
	{mso-style-name:"Table Normal";
	mso-tstyle-rowband-size:0;
	mso-tstyle-colband-size:0;
	mso-style-noshow:yes;
	mso-style-priority:99;
	mso-style-qformat:yes;
	mso-style-parent:"";
	mso-padding-alt:0in 5.4pt 0in 5.4pt;
	mso-para-margin-top:0in;
	mso-para-margin-right:0in;
	mso-para-margin-bottom:10.0pt;
	mso-para-margin-left:0in;
	line-height:115%;
	mso-pagination:widow-orphan;
	font-size:11.0pt;
	font-family:"Calibri","sans-serif";
	mso-ascii-font-family:Calibri;
	mso-ascii-theme-font:minor-latin;
	mso-hansi-font-family:Calibri;
	mso-hansi-theme-font:minor-latin;
	mso-bidi-font-family:"Times New Roman";
	mso-bidi-theme-font:minor-bidi;}
</style>
<![endif]-->	<span style="font-size:14px;"><br />
	</span></p>',
			'published' => true,
			'created' => '2013-02-07',
			'modified' => '2013-03-15',
			'keywords' => '',
			'description' => 'Gone are the days when students had no choice but to go abroad for foreign degrees, thanks to the increasing number of foreign educational institutions which are providing internationally recognized education in Nepal.',
			'sortorder' => '671',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 6 => array(
		'Article' => array(
			'id' => '774',
			'article_category_id' => '40',
			'title' => 'Learning : The Ropes December 2012',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
<!--[if gte mso 9]><xml>
 <w:WordDocument>
  <w:View>Normal</w:View>
  <w:Zoom>0</w:Zoom>
  <w:TrackMoves/>
  <w:TrackFormatting/>
  <w:PunctuationKerning/>
  <w:ValidateAgainstSchemas/>
  <w:SaveIfXMLInvalid>false</w:SaveIfXMLInvalid>
  <w:IgnoreMixedContent>false</w:IgnoreMixedContent>
  <w:AlwaysShowPlaceholderText>false</w:AlwaysShowPlaceholderText>
  <w:DoNotPromoteQF/>
  <w:LidThemeOther>EN-US</w:LidThemeOther>
  <w:LidThemeAsian>X-NONE</w:LidThemeAsian>
  <w:LidThemeComplexScript>X-NONE</w:LidThemeComplexScript>
  <w:Compatibility>
   <w:BreakWrappedTables/>
   <w:SnapToGridInCell/>
   <w:WrapTextWithPunct/>
   <w:UseAsianBreakRules/>
   <w:DontGrowAutofit/>
   <w:SplitPgBreakAndParaMark/>
   <w:DontVertAlignCellWithSp/>
   <w:DontBreakConstrainedForcedTables/>
   <w:DontVertAlignInTxbx/>
   <w:Word11KerningPairs/>
   <w:CachedColBalance/>
  </w:Compatibility>
  <w:BrowserLevel>MicrosoftInternetExplorer4</w:BrowserLevel>
  <m:mathPr>
   <m:mathFont m:val="Cambria Math"/>
   <m:brkBin m:val="before"/>
   <m:brkBinSub m:val="--"/>
   <m:smallFrac m:val="off"/>
   <m:dispDef/>
   <m:lMargin m:val="0"/>
   <m:rMargin m:val="0"/>
   <m:defJc m:val="centerGroup"/>
   <m:wrapIndent m:val="1440"/>
   <m:intLim m:val="subSup"/>
   <m:naryLim m:val="undOvr"/>
  </m:mathPr></w:WordDocument>
</xml><![endif]-->	<span style="font-size:12px;"><img alt="learningtheropes" border="1" height="181" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/rashesh.jpg" vspace="10" width="338" /><br />
	<br />
	<br />
	<img alt="telephone" border="1" height="165" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/camels.jpg" vspace="10" width="249" /><br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:12px;"><span color:="" myriad="" style="font-family: ">By Rashesh Vaidya</span></span></p>
<p class="MsoNormal">
	<span style="font-size:12px;"><span color:="" myriad="" style="font-family: ">&nbsp;</span></span></p>
<p class="Pa9">
	<strong><span style="font-size:12px;"><span style="color: black;">Camels and Eagles </span></span></strong></p>
<p class="MsoNormal">
	<strong><span style="font-size:12px;"><span class="A28"><span style="line-height: 115%; font-family: ">The rating system identifies the problematic banks which are in need of increased supervision.</span></span></span></strong></p>
<p class="MsoNormal">
	<strong><span style="font-size:12px;"><span class="A28"><span style="line-height: 115%; font-family: ">&nbsp;</span></span></span></strong></p>
<p class="Default">
	<span style="font-size:12px;"><span class="A4">A </span><span style="color: black;">commercial bank’s performance can be measured in terms of its ability to meet the expectations of its owners, employees, depositors and borrowers. A bank’s performance can be evaluated by analysing its financial reports- report of condition and report of income. The bank’s management has to protect the interests of all concerned parties - creditors, owners and others. They have to ensure minimum operating efficiency and keep the bank’s risks at a minimum level. Their survival depends upon their operating performance.</span> <br />
	</span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:12px;"><span style="color: black;">Commercial banks are the most regulated of all the institutions in the financial system because of the direct impact of their activities on the economy. Every commercial bank is regulated and governed by their regulator i.e. the Nepal Rastra Bank (NRB), the country’s central bank. The NRB inspects and supervises (on-site and off-site) the banks and financial institutions (BFIs) to ensure that the banks operate in a safe and sound manner. Sections 49(1) and 49(2) and 52(1) to 52(5) of the Bank and Financial Institution Act (BAFIA), 2006 and sections 76 to 88 of the Nepal Rastra Bank Act, 2006 have given full authority to the NRB to direct, supervise and inspect the BFIs it has issued licenses to.&nbsp;&nbsp; </span></span><span style="font-size:12px;"> <span style="color: black;"><br />
	</span></span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">For this purpose, the regulators have developed a uniform numerical rating system called CAMELS Rating, which is based on the financial statements of the banks and on-site examinations. The Bank Supervision Department of NRB can carry out on-site examination of commercial banks in Nepal by sending examination teams to the commercial banks. Onsite examination can be either corporate level covering all aspects of the functioning of the bank or can be a targeted branch-level inspection. On completion of the on-site –examination, examiners perform CAMELS rating of the bank. This rating is exclusively used for supervisory purpose and is not revealed to the general public.&nbsp;&nbsp; </span></span><span style="font-size:12px;"> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">The examiners or inspection team evaluates a bank’s health on the basis of the overall rating based on capital adequacy, assets quality, management quality, earning ability, liquidity position and sensitivity to market risks (systematic risks). The Federal Reserve Regulators in the USA developed the numerical CAMELS rating system in the early 1970s to help structure their bank examination process.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">The BFIs are categorised into different groups based on their overall strength, quality and operating soundness. The rating system identifies the problematic banks which are in need of increased supervision. In the CAMELS rating system, each bank is assigned two sets of ratings:</span><br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">&nbsp;&nbsp;&nbsp;&nbsp; 1.<span font-size-adjust:="" font-stretch:="" font-style:="" font-variant:="" font-weight:="" line-height:="" new="" style="font-family: " times=""> </span></span><span style="color: black;">Performance Ratings, which comprise six individual ratings that address each of the CAMELS components; and</span> <br />
	</span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:12px;"><span style="color: black;">&nbsp;&nbsp;&nbsp;&nbsp; 2. An overall Composite Rating, which is a single rating based on a comprehensive assessment of the bank’s overall condition.Both the&nbsp;&nbsp; ratings are scored on a numerical scale of 1 to 5 in the ascending order of supervisory concern where “1” represents the best rating and “5” the worst. </span></span></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:12px;"><span style="color: black;">Here is a description of the rating scores for each of the six components: </span></span></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span></p>
<p class="Pa7" style="text-align:justify">
	<strong><span style="font-size:12px;"><span style="color: black;">Rating 1 (A) indicates very strong performance </span></span></strong></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp;</span></strong></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">Rating 2 (B) indicates above-average performance that adequately provides for a safe and sound operation of the BFIs.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">Rating 3 (C) indicates performance that is flawed to some degree.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">Rating 4 (D) indicates unsatisfactory performance which, if left unchecked, could threaten the solvency of the BFIs.</span> <br />
	</span></p>
<p class="Pa7" style="text-align:justify">
	<span style="font-size:12px;"><span style="color: black;">Rating 5 (E) indicates very unsatisfactory performance and calls for immediate remedial attention for the survival of the BFIs. </span></span></p>
<p class="Default">
	<span style="font-size:12px;"><br />
	<span style="color: black;">The rating of banks can be further developed by giving a score to each component of the CAMELS, known as the Composite CAMELS Rating Score. The Composite CAMELS Rating can be calculated as:</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">Composite CAMELS Rating= C(0.25)+A(0.25)+M(0.25)+E(0.10)+ L(0.10)+S(0.05)</span> <br />
	</span></p>
<p>
	 </p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">Each of the above six parameters can be weighted on a scale of 1 to 100 and contains a number of sub-parameters with individual weightage. The banks should be rated on a five-point scale (A to E) based on the lines of the international CAMELS rating model.</span><br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">The CAMELS system evaluates banks on the following six parameters:</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1.<span font-size-adjust:="" font-stretch:="" font-style:="" font-variant:="" font-weight:="" line-height:="" new="" style="font-family: " times="">&nbsp;&nbsp; </span></span><span style="color: black;">Capital Adequacy: Capital adequacy has been the main pillar of existence of any bank. Banks have to maintain a proper mix of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; different types of capitals to avoid pressure on their dividend policies and inadequacy of total capital funds against the risk exposure. Capital adequacy is measured by the ratio of capital to risk-weighted assets (CRAR). A sound capital base strengthens the confidence of depositors.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">2. Asset Quality: One of the indicators for asset quality is the ratio of non-performing loans to total loans (Gross Non-Performing Assets - GNPA). The gross non-performing loans to gross advances ratio is more indicative of the quality of credit decisions made by bankers. A higher GNPA is indicative of poor credit decision-making.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">3. Management: The ratio of non-interest expenditures to total assets can be one of the measures to assess the working of the management. This variable, which includes a variety of expenses, such as payroll, workers’ compensation and training investment, reflects the management policy stance.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">4. Earnings: It can be measured as the return on asset ratio.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">5. Liquidity: The cash maintained by a bank and balances with the central bank to the total asset ratio is an indicator of the bank’s liquidity. In general, banks with a larger volume of liquid assets are perceived safe, since these assets would allow them to meet unexpected withdrawals.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">Section 38 of BAFIA, 2006 provides for maintaining a good liquidity position by the BFIs. Commercial banks are required to maintain CRR (cash reserve ratio) at 5 per cent of their total deposits. The NRB monitors the CRR weekly, and the liquidity profile on a quarterly basis.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">6. Sensitivity to Market Risks/Systems and Control: Risks associated with adverse movements in the exchange rates (including gold positions), interest rates, liquidity and investment in equity are covered under market risk management. A bank faces market risks either from its investments in government securities and bonds or from the exchange rate risk that persist in matching position. The market risk is managed by the banks’ Asset and Liability Committee (ALCO) which assesses policies and levels of risk appetite.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">However, the CAMELS approach has inherent indeterminacy and subjectivity. There can be instances when an examination of the accounting records cannot decide whether to give an average or below average score. The ‘good’ and ‘bad’ indicators are easy to spot, but the ‘in-betweens’ are not. This is a problem of indeterminacy. But when bank inspectors are forced to make a judgment, it leads to the second problem of subjectivity and hence these ratings could come up with differing levels of expectations and perspectives. Among the six variables, ‘M’ has been missing - the one which assesses the management quality and corporate governance. This has been a paradox because most of the failures of the banks are related with the quality and efficiency of their management. The problem arises while trying to quantify the management quality in the due course of analyzing and evaluating the performance of the BFIs. Thus, the central bank of Taiwan, has been using CARSEL instead of CAMELS to measure the management ability and sensitivity to market to fullfil the Regulatory Compliance and Stability criteria, respectively.</span><br />
	</span></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp;<img alt="camels" height="389" src="http://newbusinessage.com/ckfinder/userfiles/Images/camelsan.jpg" width="500" /></span></strong></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp;</span></strong></p>
<p class="Pa13" style="margin-top:5.0pt">
	<strong><span style="font-size:12px;"><span style="color: black;">About EAGLES</span></span></strong></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">The EAGLES system is able to measure and compare banks’ performance in a more determinate, objective and consistent manner. The name is derived from the key success factors confronting banks today, i.e. Earning ability, Asset quality, Growth, Liquidity, Equity and Strategy. This approach has been pioneered and has gained credibility among the banking community and fund management industry in Asia, for competition analysis and investment planning, respectively. The authenticity and popularity of EAGLES increased after it was able to predict the Asian financial crisis of the 1980s.</span> <br />
	</span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:12px;"><span style="color: black;">The effective management of a bank strategy is indicated by the Strategic Response Quotient (SRQ). It is an intriguing ratio because it assesses the management’s ability to lend, garner deposits, generate fee-based income and manage the operating cost. An appropriate balance of the three core banking activities will depend on the bank’s strategy. The SRQ is obtained by dividing the interest margin by net operating cost (that is, the total operating cost minus fee income). The higher figure the better combined with excellent risk controls. <br />
	<br />
	<br />
	<img alt="eagles" border="1" height="560" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/camesl.jpg" vspace="10" width="429" /><br />
	</span></span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">EAGLES evaluates banks on the following six parameters:</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">1.<span font-size-adjust:="" font-stretch:="" font-style:="" font-variant:="" font-weight:="" line-height:="" new="" style="font-family: " times="">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span><span style="color: black;">Earning Ability: Earning ability is shown by three noteworthy indicators – Return on Assets (ROA), Return on Shareholders’ Fund (ROSF) and Income/Overheads Ratio (IOR). The importance of IOR is usually not well understood. The main point lies in that income depends on external market forces, while overheads is highly influenced by internal staffing. So, the bank must know how to adjust the staffing according to the market demand for its products and services.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">This is shown by three indicators - ROA, Return on Net worth (RONW) and IOR. Usually, the importance of IOR is that income depends on external market forces, while overheads is highly influenced by internal staffing. So, the bank must know how to adjust the staffing according to the market demand for its products and services.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">2. Asset Quality: Asset quality is best assessed by on-site inspection of the bank’s loan portfolio. If this is not possible, asset quality can be measured by the level of bad debt provisions, that is, bad and doubtful debts (BDD) as a percentage of total loans. A conservative approach will dictate that the quantum of provision to err on the high side is rather low.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">This is best judged by the level of bad debt provisions, that is, bad and doubtful debts as a percentage of total loans. A conservative approach will dictate that the quantum of provision is on the high side is rather low.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">3. Growth: Growth rates of loans and core deposits are the most important indicators of how a bank wants to position itself in the market. A high growth loan book without a corresponding growth in the deposit base signifies an intention to increase interest margins. A higher deposit growth without a corresponding growth in loans means that the bank is suffering from low interest margins. For some banks, lower interest margins could hamper their overall profitability.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">Growth rates of loans and core deposits are the most important indicators of how a bank wants to position itself in the market. A high growth loan book without a corresponding growth in the deposit base signifies an intention to increase interest margins. A higher deposit growth without a corresponding growth in loans means that the bank suffers from low interest margins.<br />
	<br />
	<br />
	<br />
	<img alt="composite" border="1" height="524" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/composite.jpg" vspace="10" width="500" /></span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">4. Liquidity: Liquidity can be described as the ability of a bank to have sufficient funds to meet cash demands for loans, deposit withdrawals and operating expenses. For this reason, a balance should be made between the amount of deposits garnered and the quantum of loans extended. The indicator is the deposit-to-loan ratio or credit-deposit ratio (CD Ratio). It is important for a bank, therefore, to maintain a balance between the amounts of deposits garnered and the quantum of loans extended. Also, investment to deposit ratio is used as an efficient indicator of liquidity.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">5. Equity: Equity level and capital adequacy have a profound impact on the bank. There is an international guideline (Basel II) that stipulates a bank must have a minimum capital equivalent to 8 per cent of the risk adjusted assets. Even the central bank of Nepal, the NRB, has mentioned a comfort zone of 6 and 10 per cent of core capital and total capital funds, respectively, based on the risk-weight assets (percent). Many banks are restricted to open additional branches unless they meet the minimum capital requirements.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">Similarly, sections 31(1) and (2) of BAFIA, 2006 have also categorized the financial institutions into four classes, namely: A, B, C and D based on their minimum capital requirements. And sections 42(1) to 42(5) have clearly explained the provision of capital adequacy for the BFIs in Nepal.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">6. Strategy: The effective management of a bank’s strategy is indicated by the strategic response quotient (SRQ). It assesses the management’s ability to lend, garner deposits, generate fee based income and manage the operating cost. As to what is an appropriate balance of the three core banking activities depends on the bank’s strategy. The SRQ is obtained by dividing the interest margin by net operating cost (that is, total operating cost minus fee income). The higher figure the better combined with excellent risk controls.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">Each of the six parameters is divided into sub-parameters for effective evaluation. The EAGLES rating, unlike CAMELS, is based purely on arithmetical ratios and hence does not involve grades or ratings. Thus, there is no subjectivity involved in EAGLES and banks are judges purely on the ratio outputs and ranked highest to lowest based on these parameters. Each bank is ranked highest to lowest on each of the sub-parameters. The bank with higher ranks on more sub-parameters will be ranked the highest in that particular parameter. Accumulating all the parameters, the bank that gets the highest rank on more parameters stands on the top of the list.</span><br />
	<br />
	<img alt="camsel" border="1" height="560" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/camesl(1).jpg" vspace="10" width="429" /><br />
	</span></p>
<p class="Default">
	<strong><span style="font-size:12px;"><span style="color: black;">About MACRO</span> <br />
	</span></strong></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">MACRO is a rating system formerly used by examiners to evaluate the safety and soundness of savings institutions. MACRO is an acronym for the five elements that were evaluated: Management, Assets quality, Capital adequacy, Risk management and Operating results. Based on the examiner’s evaluation, each element would be rated on a scale of 1 to 5, and the institution would be assigned an overall MACRO rating of 1 to 5. The indications of MACRO rating were:</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">The MACRO Rating System was used by the Federal Thrift Examiners from (exact date) 1984 to August 15, 1994, before it was replaced by the CAMELS Rating System.</span><br />
	<br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:12px;"><b style="mso-bidi-font-weight:normal"><span style="line-height: 115%; color: black;">Vaidya is a Researcher associated with New Business Age (P) Ltd. He can be contacted at rashesh_vaidya@hotmail.com</span></b> <br />
	</span></p>',
			'published' => true,
			'created' => '2013-01-22',
			'modified' => '2013-01-22',
			'keywords' => '',
			'description' => 'A commercial bank’s performance can be measured in terms of its ability to meet the expectations of its owners, employees, depositors and borrowers. A bank’s performance can be evaluated by analysing its financial reports- report of condition and report of income. The bank’s management has to protect the interests of all concerned parties - creditors, owners and others. They have to ensure minimum operating efficiency and keep the bank’s risks at a minimum level. Their survival depends upon their operating performance.',
			'sortorder' => '664',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 7 => array(
		'Article' => array(
			'id' => '768',
			'article_category_id' => '40',
			'title' => 'Cover Story December 2012',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	 </p>
<p>
<!--[if gte mso 9]><xml>
 <w:WordDocument>
  <w:View>Normal</w:View>
  <w:Zoom>0</w:Zoom>
  <w:TrackMoves/>
  <w:TrackFormatting/>
  <w:PunctuationKerning/>
  <w:ValidateAgainstSchemas/>
  <w:SaveIfXMLInvalid>false</w:SaveIfXMLInvalid>
  <w:IgnoreMixedContent>false</w:IgnoreMixedContent>
  <w:AlwaysShowPlaceholderText>false</w:AlwaysShowPlaceholderText>
  <w:DoNotPromoteQF/>
  <w:LidThemeOther>EN-US</w:LidThemeOther>
  <w:LidThemeAsian>X-NONE</w:LidThemeAsian>
  <w:LidThemeComplexScript>X-NONE</w:LidThemeComplexScript>
  <w:Compatibility>
   <w:BreakWrappedTables/>
   <w:SnapToGridInCell/>
   <w:WrapTextWithPunct/>
   <w:UseAsianBreakRules/>
   <w:DontGrowAutofit/>
   <w:SplitPgBreakAndParaMark/>
   <w:DontVertAlignCellWithSp/>
   <w:DontBreakConstrainedForcedTables/>
   <w:DontVertAlignInTxbx/>
   <w:Word11KerningPairs/>
   <w:CachedColBalance/>
  </w:Compatibility>
  <w:BrowserLevel>MicrosoftInternetExplorer4</w:BrowserLevel>
  <m:mathPr>
   <m:mathFont m:val="Cambria Math"/>
   <m:brkBin m:val="before"/>
   <m:brkBinSub m:val="--"/>
   <m:smallFrac m:val="off"/>
   <m:dispDef/>
   <m:lMargin m:val="0"/>
   <m:rMargin m:val="0"/>
   <m:defJc m:val="centerGroup"/>
   <m:wrapIndent m:val="1440"/>
   <m:intLim m:val="subSup"/>
   <m:naryLim m:val="undOvr"/>
  </m:mathPr></w:WordDocument>
</xml><![endif]--></p>
<p>
	<strong><span style="font-size:14px;"><span class="A13">By Gaurav Aryal (With inputs from Rashesh Vaidya, Sushila Budhathoki, Abha Dhital and Bivek Dhakal)</span></span><span style="font-size:14px;"> </span></strong></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;</span></span></strong></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span style="line-height: 115%; color: rgb(22, 144, 186);">Nepali Economy</span></span></strong></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">Before and After Maoist Insurgency</span></span></strong></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;<br />
	<img alt="" border="1" height="240" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/coverstory15.jpg" vspace="10" width="400" /><br />
	</span></span></strong><span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">Five years before the Maoist insurgency started in Nepal in 1996, Nepal’s GDP growth rate was approximately 5.34 percent per annum. The growth rate plunged to 3.36 percent per annum in 2006, the year the underground Maoists came over-ground following the success of the peaceful April Uprising (Jana Andolan II) and the subsequent restoration of the dissolved House of Representatives in April 2006. The economy’s growth rate kept fluctuating over the next five years till 2011.</span></span></p>
<p class="Pa7" style="text-align:justify">
	<span style="font-size:14px;"><span class="A4">N</span><span style="color: rgb(34, 30, 31);">epal is yet to witness a ‘healthy’ growth rate, which has so far fluctuated between 3.3 and 4.5 percent in this millennium, with the exception of 6.10 percent in 2008. Perhaps nobody is happy with the country’s slow growth rate, but the economists are probably the most worried lot. They lament the fact that the country’s economy has continued the downward trend even after the peace deal between the government and the Maoist guerrillas signed on November 21, 2006. A majority of Nepali economists cite the lack of new investments as the major reason for this poor show of the Nepali economy. They blame an ‘unfavourable investment climate’ created by the political uncertainty for the lack of new investments – foreign as well as domestic. However, it is not that every sector slackened over the past one and a half decades. Some sectors have witnessed encouraging growth rates. (it would be better if you could cite some examples)</span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;"><img alt="cover story december 2012" border="1" height="258" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/agriculturalproduction.jpg" vspace="10" width="400" /><br />
	<br />
	<br />
	<br />
	<span style="color: rgb(34, 30, 31);">Despite the political upheavals which include a decade-long armed insurgency, sectors such as telecommunications, education, information technology, road construction, and remittance have registered significant growths over this period. In the education sector, the literacy rate has continued a steady growth. This is mainly because of the rise in private sector investment in education, and the top priority attached to the sector by the government which allocates the largest share of the national budget to education. <br />
	<br />
	</span></span><span style="font-size:14px;"><img alt="cover story december 2012" border="1" height="244" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/totaltourist.jpg" vspace="10" width="400" /></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;"><br />
	<span style="color: rgb(34, 30, 31);">Remittance has become the lifeline of the Nepali economy in recent times. Despite huge trade deficits, the country’s Balance of Payment has remained positive, barring some hiccups. The remittance inflow has fuelled the growth of the banking sector and helped in the reduction of poverty and increase in the people’s living standard, believe the economists and experts.<br />
	<br />
	</span></span><span style="font-size:14px;"><img alt="cover story december 2012" border="1" height="310" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/totalroadlenght.jpg" vspace="10" width="500" /></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;"><br />
	<span style="color: rgb(34, 30, 31);">However, energy and tourism, arguably the two most prospectful sectors in the country, have not grown as expected. The entry of the private sector through Public Private Partnership (PPP) and Power Purchase Agreement with the state-owned Nepal Electricity Authority (NEA) has shown some hopes in the hydropower sector. However, the hope to resolve the power crisis that has only intensified since 2006 is still out of sight. <br />
	<br />
	</span></span><span style="font-size:14px;"><img alt="cover story december 2012" border="1" height="266" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/totalremittance.jpg" vspace="10" width="500" /></span></p>
<p>
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Similarly tourism, another sector widely tipped as the basis for Nepal’s economic development, could not improve as expected over the years. A veteran of Nepal’s tourism sector and Chairman Emeritus of Hotel Soaltee Crowne Plaza, Prabhakar SJB Rana notes that though the tourism industry gained some ground over the past one decade, “there are plenty of areas where we could not do anything at all”. Rana as well as other analysts attribute this failure mainly to Nepal’s inability to promote and advertise itself as an exciting tourist destination in the world’s tourist originating markets. <br />
	<br />
	</span></span><span style="font-size:14px;"><img alt="cover story december 2012" border="1" height="217" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/telephonelandlineexpansion.jpg" vspace="10" width="400" /></span><br />
	<span style="font-size:14px;"> </span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Economists as well as development planners seem to be disappointed with the latest political and economic developments. Deependra Bahadur Kshetry, Vice-chairman of the National Planning Commission, says, “The country is moving backward instead of going forward”. Referring to the difficulties of the current government led by Dr. Baburam Bhattarai in bringing out a full national budget for fiscal year 2012/13, he added, “The kind of hindrance created by the opposition parties in Nepal (in the presentation of the national budget) is seen nowhere in the world.” The size of the budget this year has shrunk compared to that of the previous year. Kshetry blames the ‘non-cooperation’ by the opposition parties for the sluggish growth of the Nepali economy in recent years. <br />
	<br />
	</span></span><span style="font-size:14px;"><img alt="cover story december 2012" border="1" height="279" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/landbought.jpg" vspace="10" width="500" /><br />
	</span></p>
<p>
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Several other analysts echo Kshetry’s concerns and cite the example of the Maoist obstruction to the presentation of the national budget last year by the then government led by CPN-UML leader Jhalanath Khanal. </span></span><span style="font-size:14px;"> </span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span></p>
<p>
	<strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">The Good Old 90s</span></span></strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);"><br />
	<br />
	Mid 1990s was a time when the scenario was much brighter with the economic growth rate hovering around five percent. From 1990, the year democracy was restored to 1995, Nepal’s overall situation improved, according to senior economist Dr Dilli Raj Khanal. But in the years after 1995, the Nepali economy witnessed a slowdown which turned into a negative growth during 2000-2005. Recalling the situation of the 1990s, economist Prof. Dr. Bishwambher Pyakuryal says, “There was devaluation of the Nepali currency, economic imbalance, and unemployment but the economy continued to grow - albeit at a modest rate - even during the insurgency in the late 1990s. The donors were supporting the development projects; ongoing projects were being given continuity. But, the donors cut their financial support to Nepal by 48 percent in the last fiscal year, compared to the previous year.”</span></span><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);"><br />
	<br />
	</span></span><br />
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);"><span style="font-size:14px;"><img alt="cover story december 2012" border="1" height="247" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/goverment.jpg" vspace="10" width="400" /></span> <br />
	Dr. Khanal adds, “Nepal’s economic growth rate, which was already slow, further deteriorated during the period of 2000 - 2005. The Maoist insurgency, which escalated during these years, is to blame to a great extent for today’s flagging economy.” Another economist, Dr Chiranjibi Nepal observes, “Although there was little economic progress from 1996 to 2000, the country was faring well, so to speak. But after 2000, there was a massive decline in economic activities, followed by the closure of several industries and slowdown in the manufacturing sector. The cumulative negative impact of all this on the economy was too heavy.” </span></span><span style="font-size:14px;"> </span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;">&nbsp;</span></strong><span style="font-size:14px;"><img alt="cover story december 2012" border="1" height="240" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/GDP.jpg" vspace="10" width="400" /><br />
	<br />
	<br />
	</span></p>
<p class="Pa13" style="margin-top:5.0pt">
	<strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Sri Lankan Comparison </span></span></strong></p>
<p>
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Economists and development experts often compare the economic situations of Nepal and Sri Lanka, for both countries have gone through violent armed insurgencies in recent history. When Nepal was passing through an armed Maoist conflict, Sri Lanka was going through the LTTE violence. In fact, Sri Lanka’s insurgency-related problems were far bigger than those of Nepal, in terms of both size and scale. For example, the Sri Lankan conflict took the life of its then head of the state and aeroplanes parked at the international airport in the capital were blown off in LTTE attacks. Nothing of that sort happened in Nepal. (The massacre of King Birendra and his family was not a terrorist act.)</span></span><span style="font-size:14px;"><br />
	<br />
	</span><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Dr. Nepal says, “It is amazing that Sri Lanka achieved five percent growth rate even when the armed conflict there was in full swing. What’s more, the island country’s growth rate crossed seven percent after the LTTE violence was brought to an end. In stark contrast, Nepal has continued with its poor show in terms of economic progress even after so many years of the start of the peace process.”</span></span><span style="font-size:14px;">&nbsp;</span><span style="font-size:14px;"> </span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);"><br />
	Former finance minister Dr. Prakash Chandra Lohani explains the reasons. “Political uncertainty and chaos has been at the root of the sorry state of the Nepali economy. It’s unfortunate that the same reasons still prevail and are hindering Nepal’s economic progress,” he says. </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;"><br />
	&nbsp;<span style="color: rgb(34, 30, 31);">The lack of any worth-noting investment in the major sectors of the economy has been another hurdle to Nepal’s economic progress. Neither domestic nor foreign investment worth mentioning has been made since the start of the peace process in the country. According to Dr. Pyakuryal, no significant amount of foreign direct investment (FDI) has come to Nepal over this period because of the feeling of insecurity and lack of confidence in the government. </span></span></p>
<p class="Pa13" style="margin-top:5.0pt">
	<span style="font-size:14px;">&nbsp;<br />
	</span><br />
	<span style="font-size:14px;"><span style="font-size:14px;"><img alt="cover story december 2012" border="1" height="255" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/budget.jpg" vspace="10" width="400" /><br />
	<br />
	</span> <span style="color: rgb(34, 30, 31);">However, all hopes are not lost for Nepal. Analysts still see the possibility of a double digit growth for the Nepali economy, provided that the state can ensure political stability and policy predictability for foreign as well as domestic investors. Some instances in the recent past support this optimism. For example, a number of foreign investors flocked Nepal – some of them wanted to explore investment opportunities while others came with concrete proposals in their hands – immediately after the government and the Maoist guerrillas signed the comprehensive peace accord on November 21, 2006. Similarly, many foreign investors applied and got the permission to conduct detailed surveys for developing a number of hydropower projects of different capacities. But many of these investors haven’t been able to go ahead with their projects, thanks to the hurdles posed by different vested interest groups. Successive governments over the years have not been able to deal effectively with these ‘project spoilers’, perhaps because of the uncertainty looming large over their own future.</span></span></p>
<p class="Pa13" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">&nbsp; <br />
	</span></span></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">&nbsp;</span><span style="color: rgb(34, 30, 31);">Human Development Index</span> </span></strong><br />
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Nepal’s Human Development Index (HDI) value for 2011 is 0.458 and the country is positioned 157th out of 187 countries included in the Index. According to a report of UNDP, between 1990 and 2011, Nepal’s HDI value increased from 0.340 in 1990 to 0.509 in 2006 and 0.458 in 2011.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">The analysts say remittance has a lot to do with poverty reduction and consequent improvement in HDI over the years. According to the Human Development Report 2011, life expectancy at birth in 1995 was 57.5 years and it increased to 65.6 in 2005 and to 68.8 in 2011. Improved health condition due to availability of health services and improved awareness are considered as contributing factors for increased life expectancy.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span><span style="font-size:14px;"><img alt="cover story december 2012" border="1" height="320" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/electricity.jpg" vspace="10" width="500" /></span></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Remittance&nbsp;&nbsp;&nbsp; </span></span></strong><span style="font-size:14px;"><br />
	</span></p>
<p>
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">The role of remittance in Nepali economy is increasing continuously. When most of the sector of the economy are showing downward trend, remittance inflow has constantly increased. This on the other hand has kept the Nepali economy going, say analysts. Remittance inflow that was Rs 239.388 billion in the fiscal year 1995/96 made a steep rise to Rs 413.428 billion in 2000/01 and to Rs 430.396 billion in 2001/02. Though the following five years till 2004/05 saw a near stagnation in remittance inflow, it registered a sharp rise to Rs 1246.423 billion in 2010/11. The trend shows that it is likely to keep on growing in the years to come too.</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">The remittance inflow in 1995/96 was equivalent to 1.79 percent of the GDP. That ratio shot up to 10.97 percent in 2001/02 and 18.69 per cent in 2010/11, according to the statistics provided by Nepal Rastra Bank.&nbsp;&nbsp; <br />
	<br />
	Remittance is credited to be one of the most important contributor to reduction of poverty incidence which, according to the Nepal Living Standards Survey III (NLSS-III), published in 2011, stands at 25.2 per cent, down from 31 percent a decade earlier.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Number of Nepali youth going abroad for employment increased during the insurgency and in the following years. Upon publication of the NLSS-II which showed poverty reduced to 31 percent from 42 percent shown in the NLSS-I in 1996, analysts had expressed fear that the poverty incidence may shoot back to 42 percent or above if the peace process started by then encouraged the migrant workers to go back to the village and discouraged further migration out of the village. But it seems that the outflow of the people from the villages is not likely to be reversed in the foreseeable future.</span><br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;<br />
	</span><span style="font-size:14px;"><img alt="cover story december 2012" border="1" height="162" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/human.jpg" vspace="10" width="500" /><br />
	</span></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Trade&nbsp;&nbsp; </span></span></strong><br />
	<br />
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Nepal’s international trade has continuously been in deficit in the absence of low industrial base. Measures for trade promotion have not brought significant improvement. Trade analysts say that easy availability of cheap Chinese goods has displaced many industries though it has helped in improving the lifestyle of the people. Nepal’s readymade garments industry (one of the major export industries) lost its American and European market due to the combination of two reasons that struck it simultaneously. One, the quota facility it enjoyed in these markets till late 1990s was lost with the phase out of the multi-fibre agreement in international trade. Second, the severe labour unrest instigated by the Maoists during the insurgency as well as after they came overground following the success of Jana Andolan II, disrupted the supply chain that forced the buyers to search other sources of supply.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">According to data from Trade and Export Promotion Centre (TEPC) and NRB, between fiscal years 1995/96 and 2011/12, it was only in 1999/2000 and 2000/01, the trade was measured surplus. The surplus in 1999/2000 and 2000/01 was by Rs 18.43 billion with India and Rs 40.24 billion with other countries and by Rs 19.18 billion with India and Rs 40.85 billion with other countries respectively.</span> <br />
	</span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Nepal’s international trade has been concentrating more and more in India in the recent years. While the share of countries other than India in Nepal’s total international trade was higher than with India till fiscal year 2001/02, then after India’s share started to be higher than that of other countries. </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span><br />
	<strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Government Budget&nbsp;&nbsp; </span></span></strong><span style="font-size:14px;"><br />
	</span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Capital expenditure in the government budget during the insurgency (from 1995/96 till 1998/99) was low and almost stable. But it was higher than the recurrent expenditure. However, in years after 1999/2000, recurrent expenditure has zoomed up while capital expenditure remained almost stagnant until the fiscal year 2005/06. One of the reasons behind such scenario was concentrated priorities of the government to calm the heightening conflict. For that purpose, expenditure was diverted to investment in security purpose; as a result, development projects were affected. It was also complained that the environment was not favourable for successful completion of the projects by the project executors during the conflict era. In the last six years recurrent expenditure has been growing substantially, reads the data provided by the Office of the Comptroller General.</span></span></p>
<p>
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Analysing this, Prof. Dr. Bishwambher Pyakuryal says, after the peace process started, many projects were either postponed or discontinued because of lack of trust in the government by donors. For example, last year the donors decreased their financial support by 48 per cent. Deficit budget is financed through foreign loan and internal loan. The amount of foreign borrowings in 2000/2001 (Rs 12.044 billion) was almost equal to the borrowings in 2010/11 (Rs 12.075 billion) while it decreased to Rs 4.546 billion in 2002/03. Similarly, the internal borrowing reached a record high in 2010/11 with Rs 42.515 billion. In the fiscal year 2009/10 it was Rs 29.914 billion and in 2006/07 it was Rs 17.892 million.</span></span><span style="font-size:14px;"><br />
	<br />
	&nbsp;</span><span style="font-size:14px;"> </span></p>
<p class="Pa13" style="margin-top:5.0pt">
	<strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Roads </span></span></strong></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);"><br />
	One of the areas where Nepal registered a good growth was in the expansion of roads network. The total length of roads has doubled over the fifteen years period between 1996 and 2012. The growth had slowed down when the conflict was at its worst. However, the growth never really ceased. Many remote parts of Nepal have been connected by road over these years. The growth is particularly in the length of fair weather roads. One reason for this increasing trend is initiative taken by local people. Growth is seen also in the length of gravelled roads that have helped in improving accessibility. In the recent years it can be noticed that the length of black-topped roads has outpaced other kinds of roads.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Electricity </span></span></strong><span style="font-size:14px;"><br />
	<br />
	<span style="color: rgb(34, 30, 31);">Electricity shortage has hamstrung industrial growth and made city life miserable. And the history reveals very interesting facts. In 1990, the installed capacity of hydropower generation in the country was 0.73 million MW which increased to 0.86 million MW in 1995/96 which gives an addition of 0.15 million MW within six years. This increased to 1.76 million MW in 2005/2006 – an increase of 0.9 million MW in ten years. Now in 2012 it stands at 2.36 million MW.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa13" style="margin-top:5.0pt">
	<strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Telecommunication </span></span></strong></p>
<p>
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">There has been a good increase in the telephone coverage across the country over the last 15 years. And this expansion is speedier in cellular mobile phones. According to the census 2011, 7.37 per cent of Nepali population uses landline telephone though this is heavily concentrated in urban areas where 22.66 per cent population uses it. In rural areas only 3.77 per cent of the population there has landline telephone. Similarly 64.63 per cent of total population of Nepal uses cellular mobile phone. This ratio is 84.07 per cent in urban areas and 59.98 per cent in rural areas. According to the census 2011 report published in November 2012.</span></span><br />
	 </p>
<p class="Pa13" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">The telephone sector suffered a lot during the insurgency. For example, many telephone towers were blown up by Maoist insurgents. However, this sector gained the most after the peace process started.</span></span></p>
<p class="Pa13" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">&nbsp;</span></span></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">&nbsp;</span><span style="color: rgb(34, 30, 31);">Agriculture&nbsp; </span></span></strong><span style="font-size:14px;"><br />
	</span></p>
<p>
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">The Agriculture sector saw stagnant trend during the period between 1995/96- 2011/12. The cash crops sub-sector did better – the production of cash crops doubled during the period. Within the cash crop subsector, the major crops that recorded substantial growth were tea, coffee and cardamom. </span></span><span style="font-size:14px;"> </span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">According to Sheela Thapa, Deputy Director at AEC (Agro Enterprise Center), consistent growth in the agricultural production was mainly because of the good weather and high rate of seed replacement. She says, “We don’t have pest problems. Farmers are increasingly using hybrid seeds as well as improved seeds which have positive impact in the production figures.” </span></span></p>
<p>
	<span style="font-size:14px;"><br />
	<span style="color: rgb(34, 30, 31);">Within this period, the year 2008 was the best in terms of weather and the availability of fertilizers while the drought and flood in 2006/ 07 resulted in a slump in agricultural production. </span></span><span style="font-size:14px;"> </span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Durga Prasad Upreti, Senior Economist at Agricultural Commodity Export Promotion Program says though there were no direct effects of armed conflict or the subsequent peace process in agricultural production, the country has lagged behind six to seven years in terms of agricultural sector development due to the conflict. He attributes the subsistence farming system for no effect of the conflict or the subsequent peace process in agriculture. According to him, had there been commercial farming with large scale farms producing the goods for the market, Nepal’s agricultural sector would have certainly suffered huge losses due to that conflict. </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span><strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Irrigation&nbsp;&nbsp; </span></span></strong><span style="font-size:14px;"><br />
	</span></p>
<p>
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">There were noticeable changes in the irrigation sector with the start of Maoist civil war in 1995/96. The hilly region saw massive decline in the growth of additional land irrigated. About 10,600 hectares of additional land were brought under irrigation in 1995/96, but it was only 1,620 hectares in 2006/07 and only 1,345 hectares in the first nine months of the fiscal year 2011/12. In Terai region, 36,084 hectares additional land was brought under irrigation in 1995/96. It was 16,782 hectares in 2005/06 and 16,101 hectares in the first nine months of the fiscal year 2011/12. </span></span><span style="font-size:14px;"> </span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Similarly, the method of irrigation has also been varied since 1995/96 with the increase in the use of ground water system. The canal water irrigation system was the main source of irrigation, irrigating 33,898 additional land in 1995/96, 5,460 hectare in 2006/07 and 12,935 hectares in the first nine months of the fiscal year 2011/ 12. On the other hand, the ground water irrigation system was 12,231 hectares in 1995/96, 21,024 hectares in 2006/07 and 4,512 hectares in the first nine months of the fiscal year 2011/12 respectively. According to the Economy Survey 2011/12, about 67 per cent of the total agricultural land is covered by irrigation.</span> <br />
	</span></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;">&nbsp;</span></strong></p>
<p class="Pa13" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Manufacturing</span></span></p>
<p>
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Manufacturing sector was the greatest sufferer due to the conflict and it is still the same. The problem started to be more pronounced from the year 2003/04 since when there was massive decline is recorded in the production of manufactured goods. </span></span><span style="font-size:14px;"> </span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span></p>
<p>
	<strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Education&nbsp;&nbsp;</span></span></strong></p>
<p class="MsoNormal">
	<br />
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Education sector too was badly affected by the conflict that forced many schools to close down, particularly in remote rural areas, and the students there were forced to join the Maoist army. However, that triggered the private sector to open new schools and colleges (mainly plus two colleges) in the cities, particularly in the capital. The conflict also encouraged the students to go abroad for studies. Now, colleges in Nepal have started getting affiliation with foreign universities and offering their courses here.</span> <br />
	</span></p>
<p>
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">According to the latest National Census 2011, the country’s literacy rate stood 65.9 percent, up from the 54.1 percent in 2001. However, this trend indicates that that it will take over three decades for Nepal to achieve the Millennium Development Goal (MDG) of 100 percent literacy, whereas that goal is actually set for 2015. </span></span><span style="font-size:14px;"> </span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa13" style="margin-top:5.0pt">
	<strong><span style="font-size:14px;"><span class="A0">National Census-2011 </span></span></strong></p>
<p class="Pa18">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Overall literacy rate (age-5 and above) =65.9% </span></span></p>
<p class="Pa18">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Male literacy=75.1% </span></span></p>
<p class="Pa18">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Female literacy=57.4% </span></span></p>
<p class="Pa18">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Highest Literacy Rate (Kathmandu=86.3%) </span></span></p>
<p class="Pa18">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Lowest Literacy Rate (Rautahat=41.7%) </span></span></p>
<p class="Pa18">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Education Above SLC=10.2% (Total Pop.) </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Tourism</span> </span></strong></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Tourism industry was not affected in the initial years of the armed conflict. So, till the end of the millennium, Nepal got good number of foreign tourists. One reason for that was the Visit Nepal Year campaign of 1998. According to the given data, it was after the millennium the tourism sector in Nepal witness a negative growth for few years. The government declared the year 2011 as ‘Nepal Tourism Year’ expecting similar effects as those of Visit Nepal Year -1998, but it was largely a failed exercise. The tourist arrival in that year was 736,215, much less than the expected one million, though nearly double the number of 1996 or 2006.</span><br />
	<br />
	</span></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Civil Aviation&nbsp; </span></span></strong><span style="font-size:14px;"><br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Decade-long conflict adversely affected civil aviation industry as well. Many Air traffic control towers were destroyed in the conflict. For example, the ‘West Locator Tower-Dharke’ was completely destroyed and it is still in the dilapidated state.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Another effect of the conflict was in the international flight movement to and from Kathmandu. Driven out of their villages, Nepali youth started going abroad for work and that increased the demand for international flights. Consequently foreign airlines started increasing their flights to Kathmandu. However, Nepal’s flag carrier Nepal Airline Corporation could not benefit from this as it suffered from lack of aircraft. Consequently, Nepal could not derive as much benefit as could have from this boom in international air traffic.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa13" style="margin-top:5.0pt">
	<strong><span style="font-size:14px;"><span class="A0">Air operator’s certificate </span></span></strong></p>
<p class="Pa18">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Total AOC issued – 69 </span></span></p>
<p class="Pa18">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Valid AOC – 39 </span></span></p>
<p class="Pa18">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Invalid and Cancelled –30 </span></span></p>
<p class="Pa18">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Airline in Operation –34 </span></span></p>
<p class="Pa18">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">AOC Valid but Not in Operation – 5 </span></span></p>
<p class="Pa18">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Helicopter Operator with Valid AOC –8 </span></span></p>
<p class="Pa18">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Fixed Wing Operator with Valid AOC –14 </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">Aviation Sports with Valid AOC –17</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;</span></span></p>
<p class="MsoNormal">
	<span style="font-size:16px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;</span></span></p>
<p class="MsoNormal">
	<span style="font-size:16px;"><strong><span color:="" myriad="" style="line-height: 115%; font-family: ">‘We must strengthen our democracy’</span></strong></span></p>
<p class="MsoNormal">
	 </p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span color:="" myriad="" style="line-height: 115%; font-family: ">&nbsp;<img alt="cover story december 2012" border="1" height="227" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/PRABHAKAR-SJB-RANA.jpg" vspace="10" width="200" /></span></span></p>
<p class="Pa0">
	<span style="font-size:14px;"><span class="A0">PRABHAKAR SJB RANA </span></span></p>
<p class="Pa0">
	<span style="font-size:14px;"><span class="A0">Chairman Emeritus </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A0"><span style="line-height: 115%; font-family: ">Soaltee Hotel Ltd, Crowne Plaza Kathmandu</span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A0"><span style="line-height: 115%; font-family: ">&nbsp; <br />
	</span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Sri Lanka, too, suffered from an armed insurgency which was more intense and persisted for a longer period than the Maoist conflict in Nepal. But Sri Lanka has been doing well in recent times, following the end of the violence there. In comparison, Nepal is not doing that well though the decade-long conflict was said have ended six years ago. In my view, our socio-economic condition is going downward at present. To become a prosperous nation with robust economy, we must groom and strengthen our democracy.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">As a matter of fact, the economy and social factors are inseparable and proportional to each other. At present, the inflation is on the rise and the main factor behind the gloomy picture is the decreasing exports. The political instability has held the nation a hostage. On the one hand, there is a positive progress in the tourism sector, while on the other, we haven’t made much difference. According to the October statistics, the international tourism market has witnessed a fall. So, we must acknowledge the fact that it’s high time that we became self-dependent and started thinking how to raise our market at the global level. <br />
	</span></span></p>
<p class="MsoNormal">
	<strong><span style="font-size:16px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;</span></span></strong></p>
<p class="MsoNormal">
	<strong><span style="font-size:16px;"><span color:="" myriad="" style="line-height: 115%; font-family: ">‘Peace process did not bring optimism for investment’</span></span></strong></p>
<p class="MsoNormal">
	 </p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span color:="" myriad="" style="line-height: 115%; font-family: ">&nbsp;<img alt="cover story december 2012" border="1" height="205" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/DR-PRAKASH-CHANDRA-LOHANI.jpg" vspace="10" width="200" /></span></span></p>
<p class="Pa0">
	<span style="font-size:14px;"><span class="A0">DR PRAKASH CHANDRA LOHANI </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A0"><span style="line-height: 115%; font-family: ">Economist</span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A0"><span style="line-height: 115%; font-family: ">&nbsp;</span></span></span></p>
<p class="MsoNormal">
	The average growth rate of the Nepali economy was around five percent during the 1990-2000 decade, despite the beginning of the decade-long Maoist civil war in 1996. However, after the peace process, there was a slowdown in the economy, mainly because of the lack of new investments. One reason for this might be there were an increasing number of improper investments, misuse of money and leakage in investments.</p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Post the peace process, the government had no plan for investment and it could not guarantee the investors for business in Nepal. There were ongoing big budget programmes but with no productivity. A lot of money was wasted in unproductive sectors which led to the failure of Nepali economy to achieve even the minimum growth.</span> <br />
	</span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">The peace process, unlike the people’s expectations, did not bring optimism and as a result, the economy could not prosper in the post-conflict period. Uncertainty and political unrest were the major reasons behind this. </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">Now, the country has no regular income source because of high rate of unemployment. Young people are wandering all over the world like never before - only to earn. Unless they are employed, the country cannot generate income. If we want to reform our economy we need to minimize the political risks. Drafting the new constitution and creating conducive environment for investors will surely bring positive changes in the Nepali economy.</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;</span></span></p>
<p class="MsoNormal">
	<strong><span style="font-size:16px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;</span><span color:="" myriad="" style="line-height: 115%; font-family: ">‘Intra- party consensus on economic issues’</span></span></strong></p>
<p class="MsoNormal">
	 </p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span color:="" myriad="" style="line-height: 115%; font-family: ">&nbsp;<img alt="cover story december 2012" border="1" height="225" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/PROF-DR-BISHWAMBHER-PYAKURYAL.jpg" vspace="10" width="200" /></span></span></p>
<p class="Pa0">
	<span style="font-size:14px;"><span class="A0">PROF DR BISHWAMBHER PYAKURYAL </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A0"><span style="line-height: 115%; font-family: ">Economist</span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A0"><span style="line-height: 115%; font-family: ">&nbsp; <br />
	</span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Historically there seems to have been positive relation between economic development and political stability in Nepal. However, it is difficult to find the exact relation in the current scenario. It is mainly because Nepal could not prosper after the peace process when compared to the time of conflict. For example, Iraq, a country in Western Asia is achieving a double digit growth despite such a shaking unrest. We don’t find a relation between political instability and economic growth there.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Nepal’s growth rate was four percent during the years 1997- 2003 and three percent during 2003- 2008. Before the Maoist war, the average growth rate was four percent, but it decreased by one percent after the peace process. During the insurgency, there was an increase in unemployment, devaluation of the Nepali currency, economic imbalance etc but the economic growth was not that uncertain and many development projects were going on. However, after the peace process, many projects were either postponed or discontinued because of the lack of trust in the government. Last year only, donors decreased their assistance by 48 per cent.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Political stability is supposedly the backbone of economic stability. Therefore, politicians should understand that politicization of economic agendas is never fruitful. With the erosion of political credibility, the trend of Nepalis investing outside the country has been on the rise. The government has fallen short of motivating and inspiring the private sector. Even more alarming, perhaps, is the ever rising exodus of the productive population – the age group of 16 to 29 – for foreign employment. Remittance, a not-so-dependable source in today’s global politico-economy, has kept the Nepali economy afloat so far.</span> <br />
	</span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">The common people do not care which party or person is in power; all that they care about, perhaps, is how the inattention to the country’s economic agendas is affecting their lives. Now the economic situation is unpredictable. If this situation continues, the possibilities of less production, labour migration, capital flight, uncertainty, insecurity for investors will rise for sure. Economic issues should not become the victim of anybody’s vested political interest. We can have a continuous growth in the economy if the political leaders are ready for it. </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">There should be an inter-party consensus on high priority sectors such as health and education. This has become very urgent and it’s high time that the politicians felt this urgency. There should be consensus at the policy level for the implementation of the economic agendas. This is the only way to regain the people’s support and trust which is very vital for sustaining the political change and preventing economy flight. Our policies and legal framework, too, should be predictable. I wonder why our politicians couldn’t learn to agree on the common economic agendas. However, I am optimistic that they will, someday.<br />
	</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;</span></span></p>
<p class="MsoNormal">
	<span style="font-size:16px;"><strong><span color:="" myriad="" style="line-height: 115%; font-family: ">‘Stable government is a must for development’</span></strong></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span color:="" myriad="" style="line-height: 115%; font-family: ">&nbsp;<br />
	<img alt="cover story december 2012" border="1" height="257" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/DR-CHIRANJIBI-NEPAL.jpg" vspace="10" width="200" /><br />
	</span></span></p>
<p class="Pa0">
	<span style="font-size:14px;"><span class="A0">DR CHIRANJIBI NEPAL </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A0"><span style="line-height: 115%; font-family: ">Economist</span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A0"><span style="line-height: 115%; font-family: ">&nbsp;</span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Economic activities in Nepal were highly affected during the years 1996- 2000, leading to a low economic growth. The economy’s downward spiral started in 1996, and after the year 2001, the changes became noticeable with the growth turning negative. It was when Nepal started being compared with conflict-hit countries such as Burundi and North Korea.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">The worst-hit sectors were industry and manufacturing, declining from 16 per cent in 2001 to six per cent in 2006. This massive decline in economic activities and closure of the industries hit the economy hard. The resulting negative growth introduced foreign employment as a major business. Weak export and nil employment were the main features of the economy back then. The trend of foreign employment peaked while export saw a massive decline from 2000 to 2006. The contribution of remittance to the GDP was higher than that of total export. After 2006, the situation was expected to improve. But it did not, with the economic growth rate hovering around barely above six per cent. The growth rate saw a downward trend again in the years 2008-2012, with an average of three per cent.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Nepal is losing its international credibility, thanks to the current political mismanagement. A clear indicator for this is the decline in the annual foreign direct investment (FDI) inflow which has decreased from Rs 9 billion nine years back to around Rs 7 billion at present. For survival, the country depends as much on remittance as the Netherlands once relied on its oil resource. If the remittance inflow follows a downward trend, what will be the future of Nepal?</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Remittance is simply undependable as a means to sustain the economy in the long run. Also, its inflow which depends on a number of external factors is unpredictable. It is a kind of slow poison which ultimately kills a nation in the course of time. The government has no strategies to generate employment in the country. When there is no productivity, how can we have growth? This is why our international trade comprises of 85 per cent import and a mere 15 per cent export. There is no fixed time for presenting the country’s annual budget, which has been delayed over and again. Meanwhile, the budget deficit has reached Rs 3. 87billion.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">It seems amazing that Sri- Lanka, which was growing at about five percent during the LTTE conflict, has been able to achieve a growth rate of more than seven per cent post the conflict. But Nepal, on the other hand, has failed to achieve any impressive growth rate even after the peace deal. I don’t understand why Nepal hasn’t witnessed a healthy economic growth though the decade-long armed insurgency here ended six years ago. Our major problem, perhaps, has been unstable government. Moreover, economic growth also depends on policy consistency and stability; Nepal lacks long-term government policies.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">Nepal has huge prospects in many sectors, including hydropower and tourism, which await their effective exploitation. For the past few years, Nepal’s average annual hydropower generation capacity has been only six mega-watts. At this rate, it will take us a century to produce 600 MW of hydropower. Our total hydropower potential is up to 63,000 MW. I am confident that we can bring about impressive changes over the next five years – there is no need to wait for another 25 years as suggested by some politicians - if we have a government stability and policy consistency. <br />
	</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);"><br />
	</span></span></p>
<p class="MsoNormal">
	<strong><span style="font-size:16px;"><span color:="" myriad="" style="line-height: 115%; font-family: ">‘We lack clear economic policies’</span></span></strong></p>
<p class="MsoNormal">
	<img alt="cover story december 2012" border="1" height="222" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/DR-DILLIRAJ-KHANAL.jpg" vspace="10" width="200" /></p>
<p class="Pa0">
	<span style="font-size:14px;"><span class="A0">DR DILLIRAJ KHANAL </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A0"><span style="line-height: 115%; font-family: ">Economist</span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A0"><span style="line-height: 115%; font-family: ">&nbsp;</span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Compared to other Asian countries, Nepal always has had a slow growth rate. Nepal’s economy started slowing down further after 1995; the effects of this were quite visible during the years 2000-2005. The armed Maoist insurgency certainly had some impact on the Nepali economy, but it was only a marginal impact.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Unlike in many African nations which have been through conflicts, the negative impacts of the Maoist insurgency on Nepal’s economy became more perceptible after the beginning of the peace process. Nepal hasn’t seen the kind of economic growth which normally follows the establishment of peace after a long period of conflict in any country. This is mainly because we could not give priority to our economic issues.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">The fact that the political parties in Nepal cannot agree on even presenting the country’s full national budget on time speaks volumes about our current problems. The country could not get its annual budget on time, except for one fiscal year, after the start of the peace process in 2006. It is unfortunate that the politicians have failed to focus on the country’s economic agendas over this period. Their concern for the worsening economy is limited to slogans and speeches only. In reality, their only concern is how to get the reins of power. Power is what they have been fighting for all these years, after the signing of the peace deal.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">We don’t have the pre-requisite for development, either. For example, we lack the infrastructures that are a must for a big-budget project to run smoothly. We haven’t been able to encourage local as well as foreign investors to invest in the country. High transaction costs, power shortage and water scarcity have made it further difficult to sustain the industry. In addition, the investors find the overall environment in the country not conducive for investment.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">There is uncertainty in the global environment and the political instability in Nepal has made achieving economic prosperity further difficult. My research on finding the sources of economic growth also suggests the need to have proper economy and to make good policies to implement them. If we do it, we can have high growth rate in coming 10 years- and we don’t need to wait for 2030. Nepal can benefit from the development of global economic hubs like China and India as well. We could increase our income by five times what we earn today. We can have better economy than the newly emerged economies like Malaysia, UAE and other Gulf countries.</span> <br />
	</span></p>',
			'published' => true,
			'created' => '2013-01-04',
			'modified' => '2013-02-07',
			'keywords' => '',
			'description' => 'Five years before the Maoist insurgency started in Nepal in 1996, Nepal’s GDP growth rate was approximately 5.34 percent per annum. The growth rate plunged to 3.36 percent per annum in 2006, the year the underground Maoists came over-ground following the success of the peaceful April Uprising (Jana Andolan II) and the subsequent restoration of the dissolved House of Representatives in April 2006. The economy’s growth rate kept fluctuating over the next five years till 2011.',
			'sortorder' => '658',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 8 => array(
		'Article' => array(
			'id' => '739',
			'article_category_id' => '40',
			'title' => 'Cover Story November 2012',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	COVER STORY</div>
<div>
	<span>By Pinaki Roy (with inputs from Sushila Budhathoki, Bivek Dhakal and Abha Dhital)<br />
	<br />
	<br />
	<img alt="coverstory" border="1" height="362" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/coverstory(3).jpg" vspace="10" width="400" /><br />
	</span></div>
<div>
	 </div>
<div>
	Corporate Buildings</div>
<div>
	<span>Customised Business Premises as Corporate Fad</span></div>
<div>
	 </div>
<div>
	<b>Corporate houses in Nepal are attracted towards having their own buildings with a vision to make business operations easier and less time consuming among a host of other reasons. The trend of getting customized buildings constructed has caught up fast with the corporate entities in the last one-and-a-half decade or so, observe analysts.</b></div>
<div>
	 </div>
<div>
	<span>G</span>etting a building constructed for business purposes is becoming a onetime and long-term investment for the corporate groups in the country. Om Rajbhandary, the Chairman of Brihat Investments Pvt Ltd credits the banking sector for starting the trend. He says, “The banks were among the first ones to have their own buildings constructed while the other sectors followed suit in the last 15 years or so.”</div>
<div>
	 </div>
<div>
	 </div>
<div>
	Operating from rented offices is becoming a thing of the past. By having their own buildings, corporate big-wigs are focusing more on creating an impression on their business associates and the clientele at large. People usually perceive a corporate house to be of a certain standard if it owns a building. Kumar Lamsal, the CEO of Sanima Bank believes, “It directly relates to the image of a company that can neither be built nor destroyed in a day.” He explains that though one has to spend a huge amount in constructing own building, “The benefits are for many years to come and the cost will be ultimately compensated in the long run.”</div>
<div>
	 </div>
<div>
	 </div>
<div>
	From a global perspective too, the need of the hour for businesses is to opt for high rise buildings. It is more so in the case of Nepal where there is little land to spare in urban areas, especially in Kathmandu, where most corporate houses operate from. The multi-storied corporate buildings serve as easy means to minimize uncontrolled urbanization as well as the completion cost of the buildings. “I believe that the corporate big-wigs building skyscrapers for their organizations is a positive initiation given the rapid flow of unmanaged urbanization in Kathmandu,” says Bishnu Panthee, the Vice President of the Society of Nepalese Architects (SONA). He adds that there aren’t any viable options other than building high rises in the capital as the city needs to adapt to the latest trend and move ahead with the times.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	The charm of working when you are using your own resources makes the working environment more conducive and also boosts the workers’ moral spirit. Working environment plays a vital role in productivity and a good infrastructure certainly leaves a good impression on the minds of the internal as well as external customers. A well furnished and equipped office space helps to maintain reputation and image of the companies. Round the clock CCTV and security system, high speed elevators, fire fighting system, emergency exits, telephone facilities on demand, adequate parking space, power back-up system, earthquake resistant structures and external finishing are features and facilities that the corporate buildings provide.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	There is a deep-rooted concept in the psyche of a regular Nepali that people who have their own houses are stable. “Having own building for corporate and business purpose feels no different and hence, can’t be termed as an exception,” asserts Rajbhandary. He adds, “It is high time indeed for the corporate houses to move on with their own resources.” Lamsal agrees and cites the convenience of conducting business operations from own premises as an overriding reason for the decision to have ‘Alakapuri’, Sanima Bank’s corporate headquarters. He adds, “For a bank, owning a building means a lot and having it has always been one of our priorities. We needed the building to run our business in the most efficient manner possible.”</div>
<div>
	 </div>
<div>
	The trend for owning customized buildings has emerged as a requirement for the Nepali corporate houses. To have your own building makes you feel like you have everything in your business, say experts. “You are comfortable in that building because it’s made as per your requirements and hence, it has become common for corporate houses these days to treat this factor on a prioritized basis.” The sense of pride and ownership in having one’s own office premises is a temptation that most corporate companies are finding hard to resist and one that promises to grow stronger as time passes.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	 </div>
<div>
	 </div>
<div>
	<span>Sanima Bank<br />
	<br />
	<img alt="sanima bank" border="1" height="346" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/sanimabank(1).jpg" vspace="10" width="400" /><br />
	<br />
	</span></div>
<div>
	Commonly known as Sanima Bank building, the ‘Alakapuri’ building is situated in Naxal. Designed by Architect Dr Prakash Bir Singh Tuladhar of New Progressive Designers, it has a contemporary design with structural glazing facade. While Vastu has been adhered to, it also has a fountain and basement parking. This six storied building with a total area of approximately 47,000 sq ft can accommodate up to 300 work station at one time. It also has elevator and automatic sensor doors in each floor. Approximately, Rs 350 million was invested in the building which took three years to complete and came into operation in January this year.</div>
<div>
	 </div>
<div>
	<br />
	 </div>
<div>
	<span>Butwal Power Company<br />
	<br />
	<img alt="butwal power company" border="1" height="149" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/butwal-power-company(1).jpg" vspace="10" width="171" /><br />
	<br />
	</span></div>
<div>
	Butwal Power Company (BPC), located in Buddhanagar, is designed by Innovative Createers Pvt Ltd. This nine storied building with a basement and gross area of 50,000 sq ft can accommodate up to 300 employees. While the building is mostly based on Vastu, it also portrays the Green Building concept with an objective of being LEED (Leadership in Energy and Environment Design) certified project to be issued by USGBC (US Green Building Council). The BPC building has Earth Air Tunnel with solar system for continuous hot/cold air, Wind Turbine (3KW capacity) with battery hybrid system, Anaerobic Sewage Filter System, double glazed window system for energy optimization, deep boring for water supply, and LED lights. Its underground parking system can accommodate up to 50 vehicles at a time. It has two elevators and a terrace garden of approximately 15000 sq ft in area. With open office arrangement, the building also has a pantry in each floor. Approximately, Rs 300 million was invested in the building which took three years to complete and came into operation in August this year.</div>
<div>
	<br />
	<br />
	 </div>
<div>
	<span>Bhat Bhateni Super Market<br />
	<br />
	<img alt="bhat bhateni" border="1" height="290" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/bhatbhatenisupermarket(1).jpg" vspace="10" width="338" /><br />
	<br />
	</span></div>
<div>
	The corporate building of Bhat Bhateni Super Market is situated in Tangal. With a total area of 85,000 sq ft, the building has five floors. This Seismic Resistant Structure designed by Tanka Bahadur Shrestha is also based on Vastu. The building that has a massive accommodation capacity was constructed in several phases. It has five escalators and a 13 person capacity elevator. The parking area for customers has room for 75 cars and 400 motorcycles. The building also has a 24 hours generator backup system.<br />
	<br />
	 </div>
<div>
	 </div>
<div>
	<span>Prabhu Finance Company<br />
	<br />
	<img alt="prabhu" border="1" height="340" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/prabhufinancelimited(1).jpg" vspace="10" width="400" /><br />
	<br />
	</span></div>
<div>
	The corporate building of Prabhu Finance Company Limited located in Lainchaur is designed by Dr Prakash Bir Singh Tuladhar. This contemporary building has six floors and an area of 26,300 sq ft. This building can accommodate up to 250 people at a time. A total of Rs 100 million was invested in the construction of the building that took 18 months to complete. The building has pantry, elevator and a basement parking area.<br />
	<br />
	 </div>
<div>
	 </div>
<div>
	<span>Shikhar Biz Centre<br />
	<br />
	<img alt="shirkhar" border="1" height="335" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/shikarfinancelimited(1).jpg" vspace="10" width="391" /><br />
	<br />
	</span></div>
<div>
	Shikhar Biz Centre situated in the heart of Thapathali boasts of seven floors. Designed by Vastukala Paramarsha, the building is vastu friendly. The design of Shikhar Biz Centre has a contemporary look and the owner Shikhar Insurance operates from the fifth, sixth and seventh floors. With an investment of about Rs 200 million, the building took four years to complete construction. The building has an area of 5500 sq ft and includes a small lawn and underground parking. The building has two elevators, a staircase and an emergency staircase.</div>
<div>
	<br />
	<br />
	 </div>
<div>
	<span>Rastriya Banijya Bank<br />
	<br />
	<img alt="rastriya banijya bank" border="1" height="411" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/rastriyabanijyabank(1).jpg" vspace="10" width="485" /><br />
	<br />
	</span></div>
<div>
	The design and supervision of Rastriya Banijya Bank (RBB) was done by Rachana Consulting Architects and Engineers Pvt Ltd. RBB, government owned and the largest commercial bank in Nepal, was established in 1966. According to an RBB source, a French lady was the architect of the building. Located in close proximity to Singha Durbar, the seven storied building has an accommodation capacity of 500 people. With an investment of Rs 110 million, it took two years to complete construction. The main building, built in an area of 11 ropanis, was officially inaugurated in 2055 BS. The building has a parking area, a garden and three big halls. The special feature of building is that all the rooms receive adequate natural light. The Bank also has a cafeteria for the staff and two elevators.<br />
	<br />
	 </div>
<div>
	 </div>
<div>
	<span>Lomus Pharmaceuticals<br />
	<br />
	<img alt="lomus" border="1" height="276" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/lomusparmcuticals(1).jpg" vspace="10" width="320" /><br />
	<br />
	</span></div>
<div>
	Bishnu Panthee, the Vice President of Society of Nepalese Architects (SONA) is the architect of Lomus building situated at Lazimpat. While talking about Vastu, minute details have been taken into consideration and the building has a contemporary look. It has three-and-a-half floors with an overall accommodation capacity of 80 people. It took around seven months to complete the construction of the building. Constructed with an investment of about Rs 40 million, the Lomus building built on an area of 20 annas has been in operation since the last seven years. It also boasts of a spacious parking lot and a big hall.<br />
	<br />
	 </div>
<div>
	 </div>
<div>
	<span>Siddhartha Insurance<br />
	<br />
	<img alt="siddhartha" border="1" height="368" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/siddharthainsurance(1).jpg" vspace="10" width="431" /><br />
	<br />
	</span></div>
<div>
	Vastu Kala Paramarsha designed the building of Siddhartha Insurance Limited located at Babarmahal and is vastu-friendly. The five-storied building has an accommodation capacity of 42 people on each floor. With an investment of approximately Rs 90 million, the construction started in 2066 BS and it took two-and-a-half years to complete. The building came into operation five months ago. The total area of the building is 12000 sq ft and has a double basement parking in addition to two elevators. The fourth and fifth floors of the building are used by Siddhartha Insurance. Similarly, rest of the floors are given on lease. The building has a special ‘Betel Leaf’ shape on the north east direction covering second, third and fourth floors.</div>
<div>
	<br />
	<br />
	 </div>
<div>
	<span>NMB Bank<br />
	<br />
	<img alt="nmb" border="1" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/nmbbanklimited(1).jpg" vspace="10" /><br />
	<br />
	<br />
	</span></div>
<div>
	The building and interior design of NMB Bank located at Babarmahal is done by Architecture Design Firm. The building of NMB is based on vastu and can accommodate around 250 people. The building has five floors and boasts of a contemporary look. It took around one-and-a-half years to complete the building construction, with an investment of Rs 50 million. The total land area of the building is 11529 sq ft with open space covering 6980 sq ft and plinth 4547 sq ft. The bank building has separate parking facilities for two wheelers and four wheelers. Similarly, the building has training and system rooms and has ensured efficient management of space for large number of staff in the main hall. The building also has an elevator.<br />
	<br />
	<br />
	 </div>
<div>
	 </div>
<div>
	<span>Ace Development Bank<br />
	<br />
	<img alt="ace" border="1" height="339" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/acedevelopmentbanklimited(1).jpg" vspace="10" width="400" /><br />
	<br />
	</span></div>
<div>
	The corporate building of Ace Development Bank located at Naxal in Kathmandu is designed by Architect Rajesh Shrestha from Vastukala Paramarsha Nepal. From the direction of the floor face to the positioning of different departments, the structure of the building is completely based on the instruction of Vastu expert Madhav Mangal Joshi. The four-storied building accommodates around 120 employees and is built on two ropanis while the total area of the building is 20,000 sq ft. The first phase of the construction was completed in one-and-a-half years which included the basement, ground floor and first floor. The rest of the construction was completed three months ago. The bank has utilized the space to the maximum; there is a basement with parking capacity for 27 cars, a conference hall with 100 people capacity, a garden inside the compound, and a cafeteria for the staff. It has meeting halls in each floor while rain water harvesting system makes the building unique among other corporate buildings.<br />
	<br />
	 </div>
<div>
	 </div>
<div>
	<span>Nabil Bank</span></div>
<div>
	<br />
	<img alt="nabil" border="1" height="341" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/nabilbanklimited.jpg" vspace="10" width="400" /><br />
	<br />
	 </div>
<div>
	Located at Durbarmarg, the heart of Kathmandu, the corporate building of Nabil bank has a combination of modern design and vastu. The building is designed by Design Cell Pvt Ltd and the annex building took about 12 months for the construction. The total area of the building is 53500 sq ft which has six floors including the basement. The bank shifted in the building in November 2010 which accommodates around 320 staff members. There is a roof top garden, two units of elevators and two staircases in the building. Basement parking is only meant for motorbikes while two other parking spaces behind the building are for other vehicles. The basement parking accommodates around 100 motorbikes while 40 big vehicles could be parked over the ground.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	 </div>
<div>
	 </div>
<div>
	<span>Saakha Halls<br />
	<br />
	<img alt="saakha halls" border="1" height="253" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/saakhahalls.jpg" vspace="10" width="293" /><br />
	<br />
	</span></div>
<div>
	 </div>
<div>
	The five-storied corporate building of Saakha Group located at Tinkune, Kathmandu is built as per pillar system and is contemporary in design. The building is built on 2.5 ropanis while the area of the building stretches about12500 sq ft. Since the building has window glasses on three sides, there is no need to switch on the lights during the day time. The group established their office in this building two years ago that accommodates around 200 people. There is a board meeting room, a visitors room for staff and a business room. Parking facility inside the compound is available with a capacity to accommodate 15 big vehicles and 25 motorbikes. A separate pantry for staff, a 100 KV transformer and lift facility are also part of the building.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	<span>Sarada Group<br />
	<br />
	<img alt="sa" border="1" height="278" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/saradagroup.jpg" vspace="10" width="400" /><br />
	<br />
	<br />
	</span></div>
<div>
	Sarada Group’s corporate building is located at Thapathali. Designed by Architect Rajesh Shrestha of Vastukala Paramarsha, the building is built on an area of two ropanis and stretches to 40000 sq ft. Constructed at a cost of around Rs 100 million, it can accommodate around 300 people. The building has six floors including the basement parking which accommodates around 100 motorbikes and 30 vehicles. There is also a motorbike parking over the ground within the compound area. The group is operating from the third floor of the building since the last three years and has rented other floors to various businesses. It also boasts of an elevator and generator back up.</div>
<div>
	 </div>
<div>
	<br />
	 </div>
<div>
	<span>United Traders Syndicate<br />
	<br />
	<img alt="united" border="1" height="343" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/unitedtradersyndicate.jpg" vspace="10" width="400" /><br />
	<br />
	</span></div>
<div>
	The corporate office of United Traders Syndicate, the sole distributor of Toyota vehicles in Nepal, was built more than 45 years ago. The building was further renovated 15 years ago at a cost of around Rs 50 million. Built from Nepali bricks, the building has the look of a typical Nepali house with a modern design. It accommodates around 120 staff members. The five-storied building has different departments in each floor including the Chairman’s office on the third floor, a conference hall on the fourth floor and a monitoring, controlling and processing room (MCP) on the fifth floor. The parking at the building accommodates around 30 big vehicles and 50 motorbikes. The building is built on six ropanis and also features a small garden, a workshop and a sales office.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	<span>Brihat Investment<br />
	<br />
	<img alt="brihat" border="1" height="359" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/brihatinvestment.jpg" vspace="10" width="415" /><br />
	</span></div>
<div>
	 </div>
<div>
	The corporate building of Brihat investment is designed by Architect Prathana Vaidya. The company has tried its best to incorporate every possible feature based on vastu from office cabin to its desk position. Contemporary in form, the building has features like duplex unit with eight rooms, two board rooms, executive board room and an executive lounge. Lawns, separate parking areas for motorbikes and cars, pantry and a spacious garden are also part of the building. The 3500 sq ft building took one year to complete with an investment of Rs 40 million. The company shifted in this building in 2010 which also has an elevator facility. Brihat Investment itself designed the building with the concept of an open office plan for easy and cross communication between the departments as well as to take maximum advantage of the natural light.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	<span>NIC Bank<br />
	<br />
	<img alt="nicbank" border="1" height="368" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/nicbank.jpg" vspace="10" width="448" /><br />
	<br />
	<br />
	</span></div>
<div>
	 </div>
<div>
	The Biratnagar corporate office of NIC Bank is housed in a classical building on the city’s main road. Internal layout of the building is according to Vaastu and the designing credit goes to Adf Nepal. It is a two-storied building with 17 office rooms including four different halls namely customer services, board room, trade finance and company secretary. The building is built in an area of 7290 sq ft land and the interior of the building measures 6578 sq ft. The parking space at the front is about 750 sq ft which is designated for customers while the parking space behind the building is for the staff. The building has accommodation capacity for 192 employees. There is a small garden and lots of indoor plants in the building.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	Disclaimer</div>
<div>
	 </div>
<div>
	The corporate buildings featured in this article were covered as per the following criteria:</div>
<div>
	 </div>
<div>
	<span>1)<span>       </span></span>Only the corporate buildings that were conceptualized by the owning companies/business groups themselves were taken into account.</div>
<div>
	 </div>
<div>
	2) As per the criteria, the companies were expected to have their own corporate offices in the said buildings.</div>
<div>
	 </div>
<div>
	3) Even if some parts of the buildings were rented out/ leased to other businesses, they must largely reflect the identities of the (respective) majority stakeholders.</div>
<div>
	 </div>
<div>
	Additionally, we could only cover a limited number of corporate buildings for a variety of reasons and hence, the article does not represent an exhaustive list of buildings owned by corporate entities that we have in the country.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	COVER STORY</div>
<div>
	 </div>
<div>
	 </div>
<div>
	<span>‘It’s the Need for Businesses to Opt for Skyscrapers’</span></div>
<div>
	 </div>
<div>
	<img alt="bishnu" border="1" height="323" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/bishnupanday.jpg" vspace="10" width="293" /><br />
	<strong><br />
	</strong></div>
<div>
	<strong><span>BISHNU PANTHEE </span></strong></div>
<div>
	<strong><span>Vice President </span></strong></div>
<div>
	<strong><span>Society of Nepalese Architects (SONA)</span></strong></div>
<div>
	<strong><br />
	</strong></div>
<div>
	 </div>
<div>
	 </div>
<div>
	<strong>How do you comment on the recent trend of corporate houses to have custom built office buildings?</strong></div>
<div>
	 </div>
<div>
	I believe it is a positive initiation given the unmanaged urbanization in Kathmandu. The major factors of zoning and the high and low rise structures, however, should be carefully implemented while constructing custom office buildings. Such initiatives should be approved keeping in mind the safety and security factors first. Nonetheless, there should also be proper implementation of land use maps by abiding the theory of urbanization.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	 </div>
<div>
	<strong><br />
	</strong></div>
<div>
	<strong>Tell us about the experience of SONA while dealing with the corporate houses in such matters?</strong></div>
<div>
	<strong><br />
	</strong></div>
<div>
	The main concern here is the high cost of land in Kathmandu. In rising cities like Kathmandu, such artificial hikes make it difficult for the owners to purchase land for construction. It also adds more challenges on the part of SONA. Being an umbrella association of Nepali architects, SONA has experienced several ups and downs. Sometimes, our designs have also been misused. We use theory, knowledge and modern technologies in our practice. However, we still lag behind when it comes to proper implementation of the same. Ultimately, the high cost of land causes hiccups and the projects become more expensive than is expected.</div>
<div>
	 </div>
<div>
	<strong><br />
	</strong></div>
<div>
	<strong>So what could be the solutions to minimize the risks?</strong></div>
<div>
	 </div>
<div>
	To begin with, legal measures to control the artificial price of land should be taken into consideration. We haven’t strengthened ourselves technically as well as legally. Therefore, infrastructure development should be well governed and monitored by the authorized policy makers to minimize the risks. As we are rich in antique designs, much research should be done to dig into our architectural history that is unknown to most people.</div>
<div>
	 </div>
<div>
	<strong><br />
	</strong></div>
<div>
	<strong>What are the government policies in place given that Kathmandu falls under a fragile seismic zone and is highly prone to earthquakes?</strong></div>
<div>
	<strong><br />
	</strong></div>
<div>
	The government policies don’t reveal much and are also not up to the mark when compared to the global phenomenon. The loose monitoring system and purview sometimes make it so hard for us that we have to take steps to take matters into our own hands. Besides, the lack of tight scrutiny and invigilation cause the projects to fizzle out. Nevertheless, we are doing our best to comply with the basic standards. Regarding the Kathmandu Valley part of the fragile seismic, we believe that there is a solution to every problem. For example, in the case of Japan, there are many high rise buildings and the country is prone to earthquakes. If proper monitoring, quality maintenance, awareness and utilizations are in place, then we can definitely minimize the risks involved.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	<strong>What is your comment on the trend of corporate houses opting to build skyscrapers in the current scenario?</strong></div>
<div>
	 </div>
<div>
	While analyzing the trend from a global perspective, it is the need of the hour for businesses to opt for skyscrapers. In our case, I see the skyscrapers as a welcome respite to the mismanaged urbanization. Additionally, it also minimizes the projects’ completion cost. We don’t have any viable options and must adapt to the latest technologies practiced globally.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	<strong>How is SONA addressing the unethical practices in this business?</strong></div>
<div>
	<strong><br />
	</strong></div>
<div>
	SONA is an independent non-profit and professional association of architects in Nepal. We are the voice for the architects and work to protect their rights. Therefore, we try our best to discourage any unethical practices at all times. We meet and hold discussions within the association as and when any untoward and malicious situation arises. Even though we may not take any official action, we definitely try to expose such practices in the public domain.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	<strong>How do you perceive the artistic choice of the architects themselves while building these corporate offices?</strong></div>
<div>
	 </div>
<div>
	Quite literally, SONA is here to add glitter to gold. An individual architect always strives to seek his/ her identity at some point or the other. It is our responsibility to help realize that vision for every architect. For example, if someone comes with a creative design, then we scrutinize the work and finalize the decision on a bilateral basis. Therefore, the creativity of an architect’s work can be well explored ultimately. The brand value consciousness is also a prime concern for us to safeguard the professional rights and interests of the architects.</div>
<div>
	 </div>
<div>
	<strong><br />
	</strong></div>
<div>
	<strong>What are major points to consider for ideal office buildings in commercially burgeoning cities like Kathmandu?</strong></div>
<div>
	<strong><br />
	</strong></div>
<div>
	The recently built commercial buildings in Kathmandu should be careful that the historical and cultural importance of antique buildings is not disturbed. In the quest for constructing swanky buildings, the artistic values of endangered heritages must not be compromised with. Taking it as our social responsibility, SONA has discouraged such acts. For example, we have been opposing the construction of high rise buildings around Dharahara, for example, and raising our voice to keep ancient art intact while renovating old temples across Kathmandu.</div>
<div>
	<strong><br />
	</strong></div>
<div>
	<strong><br />
	</strong></div>
<div>
	<strong>Do you think the investments made by corporate houses in constructing own buildings pay them in the long run?</strong></div>
<div>
	 </div>
<div>
	This depends on the will power of the investors to cope with the challenges ahead. Given the uncertain political state of the country and ineffective policies as regards the housing sector, our path is full of thorns. The first and foremost concern is the artificial price of land. Therefore, if these issues are properly addressed, the situation may get better for the corporate houses.<br />
	<br />
	<br />
	 </div>
<div>
	 </div>
<div>
	<strong><span>‘Owning a Building Helps a Corporate House Enhance its Brand Image’<br />
	<br />
	</span></strong></div>
<div>
	<strong><br />
	<br />
	<img alt="kumar" border="1" height="320" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/kumar.jpg" vspace="10" width="278" /><br />
	</strong></div>
<div>
	<strong><br />
	</strong></div>
<div>
	<strong><span>KUMAR LAMSAL </span></strong></div>
<div>
	<strong><span>CEO, Sanima Bank</span></strong></div>
<div>
	 </div>
<div>
	 </div>
<div>
	<strong>What is the reason behind naming Sanima Bank’s building ‘Alakapuri’?</strong></div>
<div>
	 </div>
<div>
	It is because Alakapuri refers to the state ruled by Kuber, the lord of wealth. Hence, we decided to name our building after his empire because he is worshipped as an important god when it comes to money and business.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	<strong>How do you envision the latest trend of corporate houses owning swank buildings? Do you perceive this as the need of the hour for corporate houses to construct their own buildings?</strong></div>
<div>
	 </div>
<div>
	I don’t think it is compulsory or urgent for any of us to own buildings. Constructing own building depends on one’s choice and the kind of business they run. However, I think such a trend has emerged as a requirement for corporate houses where it has become increasingly important to own a building. It is a psychological factor where owning a building makes you feel secure and gives a sense of achievement. You are comfortable in that building because you have made it as per your requirements. Hence, it has become common for corporate houses these days to follow this trend.</div>
<div>
	 </div>
<div>
	<strong><br />
	</strong></div>
<div>
	<strong>Specifically speaking, what is it that led Sanima Bank to construct its own building?</strong></div>
<div>
	 </div>
<div>
	For a bank, owning a building means a lot. It leaves a good impression on the public in terms of an enhanced brand image. A bank usually works for a long term and since we are here in this business for a long time now, having our own building has had been one of our priorities. We needed the building mainly to run the business properly.</div>
<div>
	Could you please tell us about the investment that has been made in the construction of your new premises?</div>
<div>
	We have invested around Rs 34 million on the construction of the building which took three years for its completion.</div>
<div>
	<strong><br />
	</strong></div>
<div>
	<strong>Do you think the investments made in their own buildings pay the corporate houses in the long run?</strong></div>
<div>
	 </div>
<div>
	Constructing your own building itself is a long term investment for the corporate houses. It directly relates to the image of the company that can neither be built nor destroyed in a day. Although our cost is higher in comparison to the cost in the rented building that we operated from earlier, the benefits are for many years to come. We have indeed spent a huge amount in constructing the building but in the long run, that cost will be compensated in due course of time. People usually perceive a corporate house to be enjoying a certain standing if it owns a building. And the good news is; our building has started attracting walk-in clients already.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	<strong>How significant is it for you to have constructed your own corporate building and then conducting business operations from it?</strong></div>
<div>
	 </div>
<div>
	It has been significant for us primarily because we have constructed it as per our demand and design. It is based on our choice and the way the building has been constructed meets our business demand too. We are very happy to be operating from our own office and it has certainly fulfilled our expectations. Its interior design is as good as the exterior design and has more space. It is also an attractive and strong structure while the previous building was small and congested. At the end of the day, it is easier to conduct business operations from ‘Alakapuri’.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	<strong><span>‘It’s High Time for Corporate Houses to have their Own Resources’<br />
	<br />
	<br />
	<img alt="om" border="1" height="338" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/om.jpg" vspace="10" width="294" /><br />
	<br />
	</span></strong></div>
<div>
	<strong><span>OM RAJBHANDARY </span></strong></div>
<div>
	<strong><span>Chairman, Brihat Investments Pvt Ltd</span></strong></div>
<div>
	 </div>
<div>
	<strong><br />
	</strong></div>
<div>
	<strong>How old is the trend of corporate entities in Nepal moving from rented premises to their own building?</strong></div>
<div>
	<strong><br />
	</strong></div>
<div>
	If we look at the corporate culture in Kathmandu, much of the credit for this trend goes to the banking sector. They initiated it and for around 15 years now, corporate houses started having their own buildings in Kathmandu. Earlier, it was limited because most of the businesses were family-run entities. Most of the corporate houses today boast of their resources within their own premises.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	<strong>How do you envision the latest trend of corporate houses owning swank buildings? Do you perceive this as need of the hour for corporate houses to construct their own buildings?</strong></div>
<div>
	 </div>
<div>
	Yes it is high time for the corporate houses to move on with their own resources. The vital aspects of a business - property, productivity and perception should not be forgotten at any point of time. While on one hand, we lack productive infrastructure, we are keeping a tight vigil even on minor things like the use of electricity and interior designs on the other. For the entrepreneurs to start new businesses, they must increase the size of their functional area to strengthen productivity. If property area and services planning etc are not done properly, the expenses are going to be that much higher. In the present context, these things amount to savings because of the one-time investment one is putting in. Besides, people’s perception of you is different when you are staying in a rental office and don’t have your own resources. According to our traditional concept, we believe that people who own a house are stable in life. Having one’s own space in the office and possessing the premises saves on the rental.</div>
<div>
	 </div>
<div>
	<strong><br />
	</strong></div>
<div>
	<strong>What is it that led Brihat Investment to construct its own corporate office building?</strong></div>
<div>
	 </div>
<div>
	Brihat is striving to construct environment friendly homes to cater the need of people and to help non-hazardous urbanization. Using your own resources makes the working environment more conducive and also boosts the workers’ spirits. That is the main reason for Brihat Investment to construct its own building.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	<strong>What would be an ideal investment for a corporate building?</strong></div>
<div>
	 </div>
<div>
	The cost depends on requirements and clear vision. The specific need of area, infrastructure and manpower should be the prime aspects to take care of rather than the monetary value itself while investing. Even the minute things like color choice, material choice, electricity and interior designs should be well scrutinized to minimize the ultimate cost. The choices should be clear and cost effective. For example, the trend of using LED lights is for a tangible benefit. If we move forward in a balanced way, it will not be a huge financial burden in the long run.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	<strong>How significant is it for you to have constructed your own building and then conducting business operations from the premises?</strong></div>
<div>
	 </div>
<div>
	When you own a building, all the requirements are met accordingly. People look at safety as the least concerned factor. That is wrong attitude. As Kathmandu lies in an earthquake prone area, certain safety measures should be taken into consideration. The distribution of things according to the need and demand is like an art. Good management is like oxygen, we should have proper utilization of our resources to get palpable benefit. If the structural cost comes around 10- 15 per cent, the cost for safety measures and needed infrastructure only takes an additional three per centof the building cost. Hence, having your own building is of great significance.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	 </div>
<div>
	<strong>Do you think the investments made in own buildings pay the corporate houses in the long run?</strong></div>
<div>
	 </div>
<div>
	This highly depends on the political and economic situation of the country. The real estate business is not going well at present as it used to be few years back. In reality, every flourishing business pays back to the society. Here, the fluctuating political situation and unmanaged policy has affected the business a lot. If the period of uncertainty continues, then the entrepreneurs will be forced to switch over to other business. Recently, some big hotels of Kathmandu have been turned into shopping malls and it can be taken as a good example. With regular and periodical review and a long term vision, the investment in owning buildings will certainly pay off for corporate houses in the long run.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	<strong><br />
	</strong></div>
<div>
	<strong>How challenging is it for you to keep abreast with the growing demand for new designs?</strong></div>
<div>
	 </div>
<div>
	It is challenging but the investors and the designers need to have more healthy discussions on this matter to mitigate those challenges. To me, innovative ideas come first. If a designer is precise about his ideas, he should persuade me to pursue his idea. There should be a fine balance between the designer and the building owners.</div>
<div>
	 </div>',
			'published' => true,
			'created' => '2012-12-06',
			'modified' => '2013-01-04',
			'keywords' => '',
			'description' => 'Corporate houses in Nepal are attracted towards having their own buildings with a vision to make business operations easier and less time consuming among a host of other reasons. The trend of getting customized buildings constructed has caught up fast with the corporate entities in the last one-and-a-half decade or so, observe analysts.',
			'sortorder' => '630',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 9 => array(
		'Article' => array(
			'id' => '718',
			'article_category_id' => '40',
			'title' => 'Labour Dilemma',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
<!--[if gte mso 9]><xml>
 <w:WordDocument>
  <w:View>Normal</w:View>
  <w:Zoom>0</w:Zoom>
  <w:TrackMoves/>
  <w:TrackFormatting/>
  <w:AutoHyphenation/>
  <w:PunctuationKerning/>
  <w:ValidateAgainstSchemas/>
  <w:SaveIfXMLInvalid>false</w:SaveIfXMLInvalid>
  <w:IgnoreMixedContent>false</w:IgnoreMixedContent>
  <w:AlwaysShowPlaceholderText>false</w:AlwaysShowPlaceholderText>
  <w:DoNotPromoteQF/>
  <w:LidThemeOther>EN-US</w:LidThemeOther>
  <w:LidThemeAsian>X-NONE</w:LidThemeAsian>
  <w:LidThemeComplexScript>X-NONE</w:LidThemeComplexScript>
  <w:Compatibility>
   <w:BreakWrappedTables/>
   <w:SnapToGridInCell/>
   <w:WrapTextWithPunct/>
   <w:UseAsianBreakRules/>
   <w:DontGrowAutofit/>
   <w:SplitPgBreakAndParaMark/>
   <w:DontVertAlignCellWithSp/>
   <w:DontBreakConstrainedForcedTables/>
   <w:DontVertAlignInTxbx/>
   <w:Word11KerningPairs/>
   <w:CachedColBalance/>
  </w:Compatibility>
  <w:BrowserLevel>MicrosoftInternetExplorer4</w:BrowserLevel>
  <m:mathPr>
   <m:mathFont m:val="Cambria Math"/>
   <m:brkBin m:val="before"/>
   <m:brkBinSub m:val="--"/>
   <m:smallFrac m:val="off"/>
   <m:dispDef/>
   <m:lMargin m:val="0"/>
   <m:rMargin m:val="0"/>
   <m:defJc m:val="centerGroup"/>
   <m:wrapIndent m:val="1440"/>
   <m:intLim m:val="subSup"/>
   <m:naryLim m:val="undOvr"/>
  </m:mathPr></w:WordDocument>
</xml><![endif]--></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A14"><span style="font-family: ">By Gaurav Aryal</span></span></span></p>
<p>
	<span style="font-size:14px;">&nbsp;</span><span style="font-size:14px;">&nbsp;</span><span style="font-size:14px;"> </span></p>
<p class="Pa9">
	<strong><span style="font-size:14px;"><span class="A15">Labour Dilemma </span></span></strong></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span class="A34"><span style="line-height: 115%; font-family: ">An Analysis of Labour Issues Facing Nepal</span></span></span></strong></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span class="A34"><span style="line-height: 115%; font-family: ">&nbsp;<img alt="labor cover story" border="1" height="495" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/cover2.jpg" vspace="10" width="400" /></span></span></span></strong></p>
<p class="Pa25">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:normal"><span style="color: rgb(34, 30, 31);">On the eve of celebrating Nepal Investment year 2012/13, over unionisation of labour has continued alarming foreign investors and discouraging local investors to venture into new industries. Multiple unions affiliated to more than one political party exist within a company. Such politicisations of labour unions have resulted in inter union and employee-employers rifts that significantly reduce productivity along with losses of working hours. </span></b></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:normal"><span style="line-height: 115%; color: rgb(34, 30, 31);">Political instability, labour problems and power supply are said to be the major causes of poor investment climate in Nepal. According to a survey report of 2009 conducted by enterprisesurveys.org, political instability is the major constraint for doing business followed by power shortage and labour problems respectively.</span></b></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:normal"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;<img alt="political " border="1" height="270" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/cover1(1).jpg" vspace="10" width="257" /></span></b></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A4">A</span><span style="line-height: 115%; color: rgb(34, 30, 31);">ccording to Bishnu Rimal, President of General Federation of Nepalese Trade Unions (GEFONT), there are 353,000 individual members of GEFONT and altogether 29 affiliates. Similarly, there are 800,000 members in All Nepal Trade Union Federation (ANTUF) which has 42 different professional organisations as affiliates., There are around 286 trade unions registered at the Department of Labour (DoL) that are affiliated to 10 trade union federations. A total of 86 new unions have been added after the People’s Movement II, six years ago, when there were 200 unions in the fiscal year 2005/06. According to Manish Agrawal, Vice Chairman of Employers Council at FNCCI, there are 10 authorised trade unions (including GEFONT and ANTUF) at national level in Nepal and they are all affiliated to different political parties. These unions themselves are divided into different categories according to the nature of industry. There are separate unions on tourism, hospitality, service industries, banks and financial institutions and manufacturing sector rather than having branches of a unified labour union that represents overall workers from the entire business sector. <br />
	<br />
	According to World Bank data, labour unrest is one of the contributing factors for adverse investment climate. According to the Global Competitive Index 2012/13 prepared by the World Economic Forum, inadequately educated workforce is one of the major hurdles for doing business in Nepal. The same report ranks Nepal at 125th position on labour market efficiency out of 144 countries. Likewise, poor work ethic in national labour force was placed at 8th most problematic factors for doing business in Nepal.</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">In addition, restrictive labour regulations was placed in the 5th position under the same category. A report by Nepal Business Initiative (NBI) with support of South Asia Enterprise Development Facility presented to the Prime Minister in the last week of September, labour problem ranks as one of the major challenges faced by the Nepali economy. Similarly, the Global Competitiveness Report 2012–2013 lists various aspects related to the labour market of Nepal and their efficiency and their world ranking.</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">(See table).</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);"><img alt="table coverstory" border="1" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/table(1).jpg" vspace="10" />&nbsp;</span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">In nutshell, if the ongoing problem of power shortage is resolved today, labour problem will come up as the biggest hurdle to beat, for making the overall investment environment favourable for new investors and existing corporate houses. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa14" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Wrong Message to Investors </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">The never ending labour problems have given unintended messages to the local as well as foreign investors who are willing to venture into Nepal. Recent dispute in KFC and Pizza Hut has definitely given a wrong message to interested foreign investors. Similarly, Shikhar Shoes was closed after workers manhandled the Managing Director of the company and padlocked its factory at Goldhunga. It seems that labour unrest, one of the major roadblocks to higher investment, will continue unabated in the future too. </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">An investor usually looks to invest where there is favourable business environment. Experts believe that the labour issues have created a hostile environment to investments. Labour trouble experienced in Nepali units of multinational giants like Surya Nepal, Unilever, GMR and Asian Paints have turned off prospective investments to Nepal. A handful of such representative cases are enough to scare away either domestic or foreign investors. Khila Nath Dahal, Former Co-president of Nepal Trade Union Congress Independent (NTUC-I) and former President of Democratic Confederation of Nepalese Trade Union (DECONT) denied, “It is a false assumption that labours are the cause to repel the investment. Labours, investors themselves and the government policy. have roles in r creating threat to investors venturing new business in Nepal. Lack of infrastructural development like roadways, electricity and drinking water has also affected investment.” </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">However, Rimal claims that industrial strikes are in a decreasing trend. He said, “After 2008, the number of industrial strikes has been decreasing. Trade unions have contributed to only six per cent of the total work stoppages last year as around 28 per cent cases of such work stoppages were due to bandhas called by employers and the rest was contributed by political parties and other organisations.” </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Still, leading corporate houses like Chaudhary Group, Golchha Organisation, Dugar Group, among others say that due to unfavourable environment for the manufacturing sector, they have identified service sector as safer areas for investment. Service sector, except from tourism and hospitality, sees very few cases of labour strikes and union problems. These corporate houses have been minimising their foothold on manufacturing sector and moved onto the service sector like hospitality, education, banking and finance, healthcare among others. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp; <br />
	</span></p>
<p class="Pa14" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Over Politicisation of Workers </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Naturally, the private sector companies look to make profits. When the workers are involved in union activities, more than working for the company, it adversely affects the productivity. So, a voice for ‘No Work No Pay’ was raised by the entrepreneurs but it has not been implemented till date as trade unions have strongly opposed this proposal. </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Agrawal said that as per the international norms, the identity of a labour is associated with the industry. “On the contrary, the identity of the worker in Nepal is associated with the trade union to which they belong,” he clarified. </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Due to frequent strikes and even physical assault upon the employers and managers has led to closure of factories and companies. Foreign investors have shut down their industrial units and reduced their presence in the country. Agrawal said that Colgate-Palmolive is one such example. “Nepal is losing many investors because of labour problems. Recently, Surya Garment was also shut down due to labour problems,”. he said. However, Dahal says, “If the demands of employees are fulfilled they would not choose violent way to fulfil their demands. If one side does not provide basic rights of employees as stated in the Labour Law, then the other side would definitely not follow law and order also. This consequently results into imbalance between the employers and the employees.” </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">In many cases, once an issue is resolved at a point of time and place, even more severe ones are raised at the next point of time and place. Numerous industries have closed down and, looking at the recent examples of KFC and Pizza Hut, it cannot be ruled out that similar situation won’t arise in other companies too. </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Unruly unions are protected by the political parties who don’t tire talking about importance of bringing foreign investments. Different unions that belong to different political parties come up with different demands, mostly as dictated by the respective political party. Thus, there is conflict of interest and opinions among the unions themselves. They are primarily guided by party philosophy rather than working for creating a win-win situation for both employers and employees. Agrawal said, “The major problem of the trade unions in Nepal currently is that they are focused on following political ideologies of associated political parties rather than fulfilling the interests of workers.” </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">According to Agni Prasad Thapaliya, Judge at the Labour Court, one union does not allow formation of second union in the company. “In most cases, employees are not allowed to work without taking membership of a trade union and paying a levy to the union and inter-union rivalry has also become problematic. The same person is found involved in numerous unions,” he said. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa14" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Strange Demands </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">In a series of recent events, workers have come up with weird and strange demands. Labour unions at Hotel Greenwich Village, a three star hotel in Lalitpur, recently came up with a demand that their members be felicitated with a gold medal weighing one kilogram. Labour unions affiliated to the Maoists (the party that is leading the present coalition government) and CPN-UML party are pressing the hotel management submitting a 22 point demand paper.. According to the demand paper, employees who have been working for more than 20 years in the hotel should be presented gold medals each weighing more than a kg. Prabin Acharya, Deputy Managing Director at the hotel said, “It is natural to demands an increase in remuneration and compensation but a demand like this was unheard of earlier.” The hotel has resumed its operation.</span> <br />
	</span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Similarly, workers at Thai Airways Nepal office have presented an ultimatum with various absurd demands like paying their income taxes by the airline. Such activities have become a threat to the need of the day – increase investment that will have forward linkages to employment and overall national economic growth. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa14" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Legalities of Strikes </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Although Nepal too has a legal procedure to a strike, there are very few cases of complying with these procedures before a strike is held. Thapaliya said that most of the strikes are organised without following the legal procedure. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">However, the trade union leaders deny this charge. Rimal says that the legal procedure of strikes is not violated. “Labour laws are not violated in recent years. However, if employers and employees both are found defying the law, they should be brought under the book.” </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Shalikram Jamakattel, President of ANTUF says, “Strikes which are not in accordance with the law make workers’ case weak. Therefore, they go for the strikes according to the law unless there is a compulsion.’ </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">According to Thapaliya, the due process requires prior information about the strike. If the management does not settle the issues, then it is taken to the labour office, where both parties – the workers and the management - sit for dialogues. “If the dialogues do not resolve the issue, the workers should give a 30 days ultimatum. If the management does not resolve the issue even by the end of such 30 days, the workers can go for strike,” he adds. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa14" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Collective Bargaining </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Collective bargaining in Nepal is commonly focused on demanding additional facilities, mostly wages and other fringe benefits that often includes strange demands like that in the cases of Thai Airways and Greenwich Hotel. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">It is quite natural to adopt unique bargaining standpoints by the workers according to different types of companies. However, at times, workers are alleged to have come up with insatiable demands that can be hardly fulfilled by the employers. Thapaliya said that workers are often overambitious and their demands revolve around the political ideologies to which the union is affiliated, rather than relating to the overall benefits for workers. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">However, Rimal explains this differently. “I think the approach that we follow for collective bargaining is correct. We conduct collective bargaining at the central level for minimum standards like wage determination and finalise it there. Collective bargaining for maximum standards is done at the enterprise level and we think such standards should be different in different enterprises. Multinational companies have high paying capacity so we demand more from them whereas we demand less from companies that have less income and profits.” Jamakattel complains that collective bargaining is not conducted as promised in the policies. “Labours in industrial sector do collective bargaining every two years but it has not been managed systematically. Unless new labour law is made, these problems cannot be managed.” </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Agrawal on the other hand complains that there has not been effective collective bargaining as it is affected by the overruling political ideologies of trade unions they are affiliated to. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa14" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Employment Security </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Trade union leaders also complain that many employers do not provide appointment letters. Dahal says, “The law guarantees a system of providing appointment letter to employees as soon as they join a company. But there are many employees who have not received their appointment letters. Thapaliya too has the same comment to make. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Labour law also states that an employee who has completed 240 working days should automatically become a permanent employee. However, there is a system of provisional period as well. If the employer finds the performance of an employee unsatisfactory, the employer has the right to terminate the service of such employee at any time during the probation period. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">A minimum wage is fixed at Rs 6,200 per month. But many employees arereceiving less than this, complains Dahal. Therefore, he claims, more than fifty per cent of the labour strikes have been aimed to implement such provisions of the labour laws. Labour law also requires that the salary should be revised every two years. Also, this provision is neglected by employers, adds Dahal. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Out of nearly half a million youths that enter the Nepali employment market every year, around 305,000 are going abroad for jobs. According to the Central Bureau of Statistics, there are around 11.7 million people in the workforce and only 1.8 million of them are in the formal sector jobs within the country while about 3.5 million are employed abroad. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp; <br />
	</span></p>
<p class="Pa14" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Act Amendment </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Both employers’ organisations and trade unions have been demanding amendment in the Labour Act. Both believe that to maintain cordial industrial relations, the Act urgently needs amendments.. Still, the leaders of these trade unions claim that half of the existing disputes could be resolved with the existing laws if executed properly. However, Rimal) is hopeful that the proposed amendment to the Act will address the issues of daily-wage workers and those working in the informal sector. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">And it has been around 10 years since the government begun planning to amend the labour laws. Both employer’s organisations and trade unions want the law amended. However, their respective demands are different and some of them even conflicting. Employers are demanding the inclusion of provisions like ‘No Work No Pay’ and ‘Hire and Fire’ while trade unions are demanding setting minimum wage also for informal sector. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">But there are other issues as well to be incorporated in the labour law. Thapaliya says, one such provision needed is for a tripartite commission to resolve issues that could not be addressed through collective bargaining. He suggested that the informal sector too should have rules and regulations that address issues of manual labours like minimum wages, contract system, working hours and provision of social security. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa14" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Merger of Unions </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Another labour sector issue being intensely discussed these days is the merger of trade unions. During a recent function organised by GEFONT, Sharan KC, Regional Coordinator for South Asia at Trade Union Solidarity Centre of Finland (SASK) said that Nepali trade unions should merge with each other so that they become stronger and influential. He also shared examples of merger of unions in the international arena. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Employers too are positive about this proposal. Agrawal believes, “The presence of more than two trade unions within an enterprise has been creating a very difficult working atmosphere. It divides the workers into different ideologies.” He added, “There should be only one trade union for one enterprise.” </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">FNCCI is planning to form an Industrial Relations Forum involving all the presidents of major Trade Unions, industrialists and President of FNCCI. He informed, “It will be a platform to discuss the emerging issues of labour and industrial relationships. The forum will work towards safeguarding the rights of both employers and employees.” </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp; <br />
	</span></p>
<p class="Pa14" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">State’s Role </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;<span style="line-height: 115%; color: rgb(34, 30, 31);">Both the employers and employees are found unanimous on the state’s role for resolving the problems in industrial relations. As the government has a major responsibility to protect the investments in the country, it becomes the state’s responsibility to protect investors, when needed, from unlawful activities carried out by trade unions as well. Agrawal cites an example of Maruti Suzuki in India where the state came forward to provide such protection. During the recent labour strike there, the management team was beaten up by the labourers, and the Indian police deployed 500 rapid action forces. “This shows the level of concern the government has shown towards the investors. This action showed that Indian government will not tolerate repetition of such activities.. If Indian government can do it, the Nepali government too can do it,” he says. He said, “Sense of insecurity is the major problem that the investors are facing now due to the inability of the government to take actions when trade unions behave illegally.”</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;</span></span></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span class="A37"><span style="line-height: 115%; font-family: ">Upper Karnali Project</span></span></span></strong></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A37"><span style="line-height: 115%; font-family: ">&nbsp;<img alt="upper karnali" border="1" height="85" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/upperkarnali.jpg" vspace="10" width="144" /></span></span></span></p>
<p class="Pa7" style="text-align:justify">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Energy Limited, GMR Infrastructure Limited (GIL) and Italian-Thai Development Project Company had signed a Memorandum of Understanding (MoU) with the Government of Nepal, for development of 900 MW Upper Karnali Hydro electric Project. The project was set to develop under a Build, Own, Operate and Transfer (BOOT) basis. The plant was targeted to be commissioned by the end of 2016. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">The attack on Indian infrastructure and energy major GMR’s power project in western Nepal by Maoists delayed the 900 MW hydropower project to meet its 2016 completion date. The nearly $469 million project’s environmental impact assessment was on the verge of completion when the attack occurred. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Upper Karnali Hydropower Project’s camp site in Dailekh district was burnt down. The act of arson and vandalism destroyed all the three pre-fabricated buildings in Dailekh, including the GMR site office with its computers and documents. The fear of further attacks and the pulling out of all personnel was said to have caused the delay to go up further, causing an escalation in costs as well. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Soon after the attack, the second in two months, GMR’s director G Subba Rao and Harvinder Manocha, GMR Energy’s associate vice-president as well as country director for Nepal, held talks with Nepal’s erstwhile Energy Minister Gokarna Bista and all lawmakers from the three districts spanned by the project - Dailekh, Accham and Surkhet. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Besides Dailekh, Accham and Surkhet, GMR’s projects in Nepal, including the 600 MW Upper Marsyangdi, have been regularly threatened by the Maoists with their top leaders demanding that their licenses be scrapped. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">The Independent Power Producers’ Association of Nepal warned the government in a press statement that such attacks would demolish investors’ confidence in Nepal. Facing an 18-20 hour daily power cut during the dry winter and summer seasons, Nepal has been banking on the Upper Karnali project to ease the power crisis within the next five years. GMR Group is a Bangalore headquartered global infrastructure major with interests in Airports, Energy, Highways and Urban infrastructure.</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;</span></span></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span class="A37"><span style="line-height: 115%; font-family: ">Surya Nepal Textile</span></span></span></strong></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A37"><span style="line-height: 115%; font-family: ">&nbsp;<img alt="surya nepal" border="1" height="91" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/suryanepal.jpg" vspace="10" width="160" /></span></span></span></p>
<p class="Pa7" style="text-align:justify">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Established in 2004 with an investment of approximately Rs 700 million, Surya Nepal Private Limited’s garment manufacturing unit - Surya Textile Industry - had been providing jobs to 608 workers directly, while the number of workers indirectly related to textile industry was more than 1,000. </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Remunerations demanded by workers for the eight days strike that took place in mid-April 2011 and the management’s refusal to provide any remuneration, under the “no work no pay” provision, in the long run turned out to be the main reason for the permanent closure of Surya Textile. Workers didn’t agree with the “no work no pay” pact arguing that they were present inside the industry’s premises during the strike but could not work, because the industry itself was closed. This way, arguments and counter arguments continued and it deepened the conflict between management and labourers. On June 14, the situation worsened when factory workers, under backing from major trade unions, locked up 42 officials of the management without food and water supply for more than 24 hours. Finally, police had to rescue the captivated officials forcefully, because the major trade unions wanted their demand to be fulfilled immediately, or else they were not ready to release the officials. During the rescue clash, 8 labourers and 12 policemen were injured. After the officials were rescued, the management announced an indefinite closure of the industry effective from June 15 itself. </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;<span style="line-height: 115%; color: rgb(34, 30, 31);">Since June 15 to August 17, the industry remained closed during which labourers and even the trade unions demonstrated to re-open the industry but the management continuously refused to re-open citing unfriendly industrial climate and security problems. Finally, an agreement was reached among representatives of Morang Industry Organisation, Trade Unions and Surya Nepal to shut down the industry permanently paying Rs 29,800 as lay-off benefits to each worker and also according to agreement, the laid-off workers will be given priority as per the workers’ efficiency and capacity if the company comes up with new venture or resume its factory again. The security problems, militant trade unionism and their irrational demands, according to the management, forced the company to permanently close the textile industry. Irrespective of many other cases where monthly wage is the main cause of rift between management and labourers, Surya Textile was an exception. Sanjiv Keshava, Surya Nepal’s Managing Director, claimed themselves as good paymaster and explained that they paid almost double the amount stated in the minimum wage.</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;</span></span></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span class="A37"><span style="line-height: 115%; font-family: ">KFC and Pizza Hut</span></span></span></strong></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A37"><span style="line-height: 115%; font-family: ">&nbsp;<img alt="kfc and pizza hut" border="1" height="82" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/KFC.jpg" vspace="10" width="144" /></span></span></span></p>
<p class="Pa7" style="text-align:justify">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Outlets of international fast food chains KFC, Pizza Hut and Cream Bell resumed operation on September 17, 2012 after a three point agreement between the workers and the management. KFC, the biggest fast food chain in Nepal, had remained closed for over a month. On August 14, 2012 Devyani International, a subsidiary of Varun Beverages which operates outlets of KFC and Pizza Hut in Nepal had written a letter to authorities with announcement of immediate closure of all the four KFC and Pizza Hut restaurants running in the capital. “In order to disrupt our operations, some staff have physically attacked and threatened to kill the senior managers,” the letter read. </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">The settlement of dispute took nearly a month’s time because the management was seeking action against those law breakers who threatened to kill the managers. Moreover, it was demanding a commitment from the workers on not repeating such violent behaviour again. The management of the company decided to reopen the outlets after taking action against 22 staff who manhandled a senior manager of the company. Yogendra Kumal, Joint Coordinator of All Nepal Trade Union Federation (Revolutionary); Tika Subedi, Vice President of ANHWU-R; Nawaraj Bhatta, President of ANHRWU-R´s Devyani International Nepal unit and Vishnu Reddy, Country Manager of Devyani International, signed the pact. As per the agreement, the trade union will make all the staff obey rules and regulations of the company and will not object if the management takes action on those violating the company´s rules. Likewise, the management agreed to respect the trade union rights. On August 29, the workers registered ANHRWU (All Nepal Hotel and Restaurant Workers Union-Revolutionary). </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;<span style="line-height: 115%; color: rgb(34, 30, 31);">The fast food chain had been talk of the town since there was a dispute over the formation of a trade union. According to the sources, the management and its employees started crossing swords with each other in August after cadres of the Mohan Baidya led CPN-Maoist goaded the staff into forming the party’s trade union. The five outlets used to record average daily turnover of Rs 800,000. According to the senior managerial staff at KFC Durbarmarg, the company suffered a loss of around Rs 30 million including loss of perishable goods.</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp; <br />
	</span></span></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span class="A38"><span style="line-height: 115%; font-family: ">‘Activities of Trade Unions and Employers are Guided by Traditional Mentality’</span></span></span></strong></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span class="A38"><span style="line-height: 115%; font-family: ">&nbsp;<img alt="agni parajuli" border="1" height="292" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/agni.jpg" vspace="10" width="253" /></span></span></span></strong></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A0">AGNI PRASAD THAPALIYA<br />
	Judge <br />
	<span style="line-height: 115%; font-family: ">Labour Court</span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A0"><span style="line-height: 115%; font-family: ">&nbsp;</span><b style="mso-bidi-font-weight:normal"><span style="line-height: 115%; font-family: "> <br />
	</span></b></span></span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">How do you view the current labour situation as a judge of Labour Court? </span></b></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Labour court gives its verdict on a legal basis on the disputes whatsoever comes to the court. The labour statutes have envisioned secured employment, secured employees and guarantee of social security. Looking at these, it seems that our law is labour oriented to some extent because it has made provision of secured work for workers. But in practice, workers are forced to work for a company for a long time without an appointment letter. In many cases, they don’t even have attendance files and they are not even given identity cards. To file a case in the court, one must be able to produce evidences. There must be some evidences like employment letter, identity card, payslip or attendance registers. In some case, none of these are existent. There are cases where people are put to work like bonded labours. Companies must formally employ its workers with proper documentation that clearly mentions post, type of work, job description and remuneration, according to the legal provision. There are cases where employers have not followed these rules. Based on available documents and evidences, we have made verdicts in the favour of employees. In some cases, we have not been able to reinstate the workers. Similarly, to employ foreigners in Nepal, having a work permit from the Department of Labour is a must when the company has to hire foreigners. But a research I have conducted shows that around 20 per cent employees are working without permit in the bordering areas. Similarly, around 48 per cent employees are put to work sans contract papers. There is also disparity on salary of males and females. There are also cases of sexual harassments at work. In the absence of provision to address sexual harassment in our labour law, decision made by the management of a company has been endorsed also by the court and in some cases; international law is also put into practice. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;<b style="mso-bidi-font-weight:normal"> <br />
	</b></span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">What is the annual number of cases that are filed in the labour court? </span></b></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Most of the cases reinstated in labour court are about unlawful dismissal of employees. In many cases, the misconduct is not established while in some cases there are shortcomings in the job done by the workers. There are situations when the workers have to be reinstated if misconduct is not proved or employees are not allowed an opportunity of clarification. There were 103 verdicts made last year through the labour court and 84 cases were appealed against the actions of proprietors or against decisions of Labour Offices. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;">&nbsp;<b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">It seems that labour unions are guided by political ideologies rather than for the benefits of workers. How do you view this?</span></b></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">&nbsp;Politics has also made inroads into civil service and police while it was common in the private sector. But, this is sad. It is said that a manager accuses member of another trade union with the help of one union. Such practices do not benefit the private sector. Activities of trade unions and employers show that they are guided by a traditional mentality though the overall national political and economic situation has changed with time. Employers have not got rid of their bossy nature. Although the law mentions a proper procedure to hire employees, the regulation is not properly followed. But employers or proprietors have not followed the legal procedures, so, there is the problem. Similarly, workers too are overambitious. Due to political reason, and over ambition of workers, without understanding the financial condition of the industries and even the economy, workers always want to be benefitted and enjoy attractive facilities. World history shows extreme cases of exploitation of labour and industrialists too suffered a lot but we don’t have such a situation. Our situation is definitely better. Our law addresses almost every issue of the formal sector. Both the parties have their own standpoint, so, the private sector and investment is in dire straits. This has increased the chances of capital flight. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;">&nbsp;<b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">What is the process of collective bargaining? How much have Nepali trade unions complied with the legal provision? </span></b></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Collective bargaining does not come under jurisdiction of the court. Agreements made based on collective bargaining are implemented equivalent to law. Though agreements made are implemented, in most of the cases the major problem is, agreements cannot be made. To resolve such issues, a dispute resolution body needs to be formed. As we are under the tripartite model recognised by the ILO, the personal disputes are resolved by the court while collective disputes are not solved through negotiation between employees and proprietor in the presence of Labour Office. After that, a mediator may be appointed through the consent of both parties who can settle dispute through mediation. In case the mediator fails to settle the issue, employees can file ultimatum to go on a strike. On the other hand, employers can lockup his/her business in case s/he has been unsatisfied by the complaint of employees. So, our labour law does not address effective mechanism for resolving collective issue. It is a lacuna in our law. In the absence of an authentic body to settle collective issues, the private sector is not moving ahead as it should have. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">What are the legalities of industrial strikes? Do you see those legalities followed by unions as well as companies? </span></b></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">The process of strike has not been followed at all. A negligible number of strikes are organised following the legal procedure. Most of them are organised all of a sudden. The process involves prior information about the strike. If the management does not settle the issues, then the issue is taken to the labour office where they can sit for dialogues. Even if the dialogues do not resolve the issue, a mediator can be appointed by the consent of both parties. In case, the mediator fails to settle issues or there is no understanding on appointing a mediator, labourers can go for strike but again a 30 days ultimatum should be given. When the management body does not listen to the demand within the ultimatum, strikes can then be organised. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">It is said that judiciary has been making pro-labour decisions. What is your take on it? </span></b></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Labour issues are not criminal cases. An Indian pioneer on labour law, Gulzarilal Nanda said that if the labour cases are treated on the basis of whoever produces more evidences, you are not trying to give justice to the labourers. Likewise, if a convict gets the benefit of doubt and the judge maintains silence or acts like an umpire to see which party will produce more evidences, then the justice is denied. So, a labour court judge must find out the facts and evidences. The employer always looks to employ workers at minimum facilities and make higher profit. So, the labour law procedure is quite different in nature. In the labour court, a judge must be active enough to guarantee justice. Investors feel that they must have absolute power over employees to protect their investments. In cases against employers that do not fulfil the legal procedure, justice is given in favour of labourers rather than of the employers. In numerous cases it is found that workers are alleged of wrongdoings when actually they have not committed mistakes. Even if they have committed misconduct; they are not given a chance for clarification. In such cases, decisions made by managers are reverted by the court. Therefore, when employees win the case, the industrialists say that verdicts are being labour oriented but it is not true. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp; <br />
	</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">A voice for amendment of labour law is being raised. Do you think the amendment is really needed? </span></b></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Compared to the law of other countries, one thing that needs to be incorporated into the labour law is – making a provision of a tripartite committee or commission to sort out issues that are not resolved through the collective bargaining procedure. The law must mention a certain mechanism to resolve the collective disputes. In least developed countries like Nepal, there is presence of a strong informal sector. A huge number of employed people in these sectors are in the form of manual labours like agricultural workers and household workers. The workers are still working like bonded labours. Therefore the informal sector too should have certain rules and regulations. So, there should be a regulation that addresses their minimum wages, contract system, working hours and provision of social security. As we have moved into a democratic system and become the part of the network of the UN, we have to timely and properly address these issues and control inhuman activities too. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">It is alleged that feeling of insecurity prevails in the labour court. To what extent is it true? </span></b></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;<span style="line-height: 115%; color: rgb(34, 30, 31);">In my tenure of three years, I have not felt any kind of insecurity as of now. Apart from minor arguments from labourers, there is no interference and threat seen till this day. But as the overall judiciary is said to be insecure at the national level being the part of the overall broad framework of the judiciary, labour court is also insecure from that perspective. As an individual entity, there are no such issues in the labour court.</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;</span></span></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span class="A38"><span style="line-height: 115%; font-family: ">‘Trade Unions Contributed only Six Per cent of the Total Strikes’</span></span></span></strong></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span class="A38"><span style="line-height: 115%; font-family: ">&nbsp;<img alt="bishnu" border="1" height="398" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/bishnu.jpg" vspace="10" width="346" /></span></span></span></strong></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A0">BISHNU RIMAL <br />
	President <br />
	<span style="line-height: 115%; font-family: ">GEFONT</span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A0"><b style="mso-bidi-font-weight:normal"><span style="line-height: 115%; font-family: ">&nbsp;</span></b></span></span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">How many members are there in your union and how do you manage them? </span></b></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">There are more than 353,000 individual members in our union and 29 affiliates altogether. The affiliates recruit members on their own under our co-ordination and connect them with us but we do not subscribe direct membership. We have committees at the local and district levels. And at the entrepreneur level, they choose one male and female candidate each as our representatives. The committee of the registered union becomes our member in a national level. The affiliates are action oriented while the role of GEFONT is that of coordination. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">Why are industrial strikes so recurrent in Nepal? </span></b></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Strikes were frequent between 2006 and 2008 but after 2008, the frequency of industrial strikes has gone down. If you follow the website www.nepalbanda.com, you will find that trade unions have contributed only six percent of the total bandhas in the last year while around 28 percent bandhas were called by employers and the rest was contributed by parties and other organizations. If you are confusing political strikes with trade unions’ strikes, it is a mistake. If counted, there are hardly three companies where unions called strikes namely Surya Nepal, Pizza Hut and Unilever up to now. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">Do you think the trade unions in Nepal are following the right approach in collective bargaining? </span></b></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Since we do not call it collective bargaining across the board, I think the approach that we follow for collective bargaining is proper. We conduct bargaining at the central level committee for minimum standards like wage determination and finalize it there. Collective bargaining is for maximum standards and we do it according to the type of company in question. Multinational companies have high paying capacity so we demand more whereas we demand less from the less earning companies. Before getting into bargaining process, it is essential to find whether the company is in profit or not. There was a huge bargaining at local level when the Khimti Project was firing 89 workers. According to the law, it had to pay two per cent of the total earnings to the workers and the labors’ demand approach was correct. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">Due to the violent strikes and vandalism, private sector employers in Nepal fear to hire Nepali workers. How do you view this? </span></b></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Violent strikes are rare as far as I know. The strike against Surya Nepal is the only example that I can give for vandalism in the private sector. Apart from that, strikes are usually seen at the government service and public sector. Recently, there was a strike at Unilever in Hetauda for a week and the problem was solved immediately after the negotiations. If we go through case-by-case, we may find some cases that nurtured vandalism but in general, employees are not feared to hire Nepali workers. Moreover, I have heard that employees in Nepal are longing to hire Nepali workers but they are not finding any mainly because of the scarcity of the workers in Nepal. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;">&nbsp;<b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">What are the problems that the workers are facing in Nepali industries? </span></b></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Firstly, at the policy level, the main problem that we are facing is the ineffectiveness of the rule of law. Even the industrialists are not providing minimum wages to the workers while the minimum wage is Rs 6,200 only. Unless there is a labor inspection system, we cannot find out whether the rule of law has been followed or not. Our law says that after 240 days of working, a worker is permanent at the company but there are many outsourced labors working for years and the jobs are mostly informal. Secondly, the problem of meager pay has been on the rise. High productivity of the workers can be seen only if they are paid adequately. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Besides, there is no social security in the companies. In any developed country, workers get pension after 20 years of service in a company but this social protection is rare in Nepali companies. More than Rs 200 million has been collected since the government has put one per cent tax on the companies for the social security of the workers. Accident insurance and medical insurance should be implemented but there are no schemes yet. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">The employers here fear that if the workers are made permanent, there will be less productivity. They believe that the workers are more productive when they work in fear. If there were no problems in permanent and temporary jobs, there wouldn’t be strikes in most of the industries. Workers are often agitated because there is low salary, no job guarantee and no social protection. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">Experts are saying that over unionization of labors has affected industries badly. What are your views on it? </span></b></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Conflict results from the sour relationship between management and workers, not from unionization. It is true that there are more unions in in service sector companies while some companies that provide informal job opportunities do not have unions at all. Unions are not the problems in companies because they solve most problems of the employers. A union solves the problems of each and every worker in the company and in most organizations, union leaders maintain labor relations with the management. The number of the unions is not a problem for an employee or the employer as long as authenticity of the union or the members of the bargaining team selected by the workers themselves is maintained. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">Intra-party/intra-union problems and power struggle are common among Nepali trade unions. You as the President of GEFONT may have realized that as well. What do you think could be the solution? </span></b></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Historically, there has always been a relation between Nepali political parties and trade unions. But it should be noted that Nepali trade unions are formed according to the law. Whether there is one or more than 20 unions in an organization, the employees should acknowledge that there should be a national election for an authentic union. For example, if there are four unions in an organization, the bargaining panel will be formed according to the votes in the election regardless of who the ruler of the union is. It’s only then that the multiplicity of the unions can be managed easily. Problems occur from the employers’ side too because their behavior changes according to the relationship with the union. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">As the trade unions in Nepal are affiliated to one or the other political party, they seem busy in politics than in promoting workers’ interests. How can this be resolved? </span></b></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Unions alone are not affiliated to political parties, employers too are affiliated and involved with the parties. In a multi-party system, affiliation to political parties is common and ideologically, it is correct too. </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">From the perspective of the laborers, we are purely representing the laborers inside the companies. We are not indulging in any politics, however, our people are affiliated with different political parties. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">Labor disputes and shutdown of the industries are perceived as a threat to the investors venturing into new businesses in Nepal. How is your union going about it? </span></b></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Had you gone through the document called ‘Doing Business’, you would find that the labor disputes are in the sixth number among other problems. Companies making high investments in Sunsari- Biratnagar corridor are demanding more labors. The report by World Bank has also put labor problems in seventh among others whereas the number one problem is government’s legal hassles and number two is the problem of taxation. No investor has withdrawn his investment because of the unions or the workers. Recently, we organized the third Labor and Employment Conference in Kathmandu where we jointly made a 15-points declaration regarding the welfare of the workers. We We shared that we do not have anything against the employers; rather, we had a common view that we lacked a proper government bureaucracy. Unions are often dragged between the ineffective government and the political parties which is not right. Investors say labour law is not good in Nepal but they have never blamed workers or the unions for being unfriendly towards investments. <br />
	</span></span></p>
<p>
	<br />
	<br />
	<br />
	<br />
	<br />
	<br />
	<br />
	According to the Central Bureau of Statistics, the country has about 11.7 million workforce and only 1.8 million are in the formal sector and around 3.5 million are in foreign jobs. Rest of them are either unemployed or in informal sector. What do you think should be done to attract more investments that help in reducing labor',
			'published' => true,
			'created' => '2012-10-30',
			'modified' => '2012-12-06',
			'keywords' => '',
			'description' => 'On the eve of celebrating Nepal Investment year 2012/13, over unionisation of labour has continued alarming foreign investors and discouraging local investors to venture into new industries. Multiple unions affiliated to more than one political party exist within a company. Such politicisations of labour unions have resulted in inter union and employee-employers rifts that significantly reduce productivity along with losses of working hours.',
			'sortorder' => '613',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 10 => array(
		'Article' => array(
			'id' => '704',
			'article_category_id' => '40',
			'title' => 'Remittance  : Reducing Poverty',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
<!--[if gte mso 9]><xml>
 <w:WordDocument>
  <w:View>Normal</w:View>
  <w:Zoom>0</w:Zoom>
  <w:TrackMoves/>
  <w:TrackFormatting/>
  <w:PunctuationKerning/>
  <w:ValidateAgainstSchemas/>
  <w:SaveIfXMLInvalid>false</w:SaveIfXMLInvalid>
  <w:IgnoreMixedContent>false</w:IgnoreMixedContent>
  <w:AlwaysShowPlaceholderText>false</w:AlwaysShowPlaceholderText>
  <w:DoNotPromoteQF/>
  <w:LidThemeOther>EN-US</w:LidThemeOther>
  <w:LidThemeAsian>X-NONE</w:LidThemeAsian>
  <w:LidThemeComplexScript>X-NONE</w:LidThemeComplexScript>
  <w:Compatibility>
   <w:BreakWrappedTables/>
   <w:SnapToGridInCell/>
   <w:WrapTextWithPunct/>
   <w:UseAsianBreakRules/>
   <w:DontGrowAutofit/>
   <w:SplitPgBreakAndParaMark/>
   <w:DontVertAlignCellWithSp/>
   <w:DontBreakConstrainedForcedTables/>
   <w:DontVertAlignInTxbx/>
   <w:Word11KerningPairs/>
   <w:CachedColBalance/>
  </w:Compatibility>
  <w:BrowserLevel>MicrosoftInternetExplorer4</w:BrowserLevel>
  <m:mathPr>
   <m:mathFont m:val="Cambria Math"/>
   <m:brkBin m:val="before"/>
   <m:brkBinSub m:val="--"/>
   <m:smallFrac m:val="off"/>
   <m:dispDef/>
   <m:lMargin m:val="0"/>
   <m:rMargin m:val="0"/>
   <m:defJc m:val="centerGroup"/>
   <m:wrapIndent m:val="1440"/>
   <m:intLim m:val="subSup"/>
   <m:naryLim m:val="undOvr"/>
  </m:mathPr></w:WordDocument>
</xml><![endif]--></p>
<p>
<!--[if gte mso 9]><xml>
 <w:LatentStyles DefLockedState="false" DefUnhideWhenUsed="true"
  DefSemiHidden="true" DefQFormat="false" DefPriority="99"
  LatentStyleCount="267">
  <w:LsdException Locked="false" Priority="0" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Normal"/>
  <w:LsdException Locked="false" Priority="9" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="heading 1"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 2"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 3"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 4"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 5"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 6"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 7"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 8"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 9"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 1"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 2"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 3"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 4"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 5"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 6"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 7"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 8"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 9"/>
  <w:LsdException Locked="false" Priority="35" QFormat="true" Name="caption"/>
  <w:LsdException Locked="false" Priority="10" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Title"/>
  <w:LsdException Locked="false" Priority="1" Name="Default Paragraph Font"/>
  <w:LsdException Locked="false" Priority="11" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Subtitle"/>
  <w:LsdException Locked="false" Priority="22" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Strong"/>
  <w:LsdException Locked="false" Priority="20" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Emphasis"/>
  <w:LsdException Locked="false" Priority="59" SemiHidden="false"
   UnhideWhenUsed="false" Name="Table Grid"/>
  <w:LsdException Locked="false" UnhideWhenUsed="false" Name="Placeholder Text"/>
  <w:LsdException Locked="false" Priority="1" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="No Spacing"/>
  <w:LsdException Locked="false" Priority="60" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Shading"/>
  <w:LsdException Locked="false" Priority="61" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light List"/>
  <w:LsdException Locked="false" Priority="62" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Grid"/>
  <w:LsdException Locked="false" Priority="63" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 1"/>
  <w:LsdException Locked="false" Priority="64" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 2"/>
  <w:LsdException Locked="false" Priority="65" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 1"/>
  <w:LsdException Locked="false" Priority="66" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 2"/>
  <w:LsdException Locked="false" Priority="67" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 1"/>
  <w:LsdException Locked="false" Priority="68" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 2"/>
  <w:LsdException Locked="false" Priority="69" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 3"/>
  <w:LsdException Locked="false" Priority="70" SemiHidden="false"
   UnhideWhenUsed="false" Name="Dark List"/>
  <w:LsdException Locked="false" Priority="71" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Shading"/>
  <w:LsdException Locked="false" Priority="72" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful List"/>
  <w:LsdException Locked="false" Priority="73" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Grid"/>
  <w:LsdException Locked="false" Priority="60" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Shading Accent 1"/>
  <w:LsdException Locked="false" Priority="61" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light List Accent 1"/>
  <w:LsdException Locked="false" Priority="62" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Grid Accent 1"/>
  <w:LsdException Locked="false" Priority="63" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 1 Accent 1"/>
  <w:LsdException Locked="false" Priority="64" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 2 Accent 1"/>
  <w:LsdException Locked="false" Priority="65" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 1 Accent 1"/>
  <w:LsdException Locked="false" UnhideWhenUsed="false" Name="Revision"/>
  <w:LsdException Locked="false" Priority="34" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="List Paragraph"/>
  <w:LsdException Locked="false" Priority="29" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Quote"/>
  <w:LsdException Locked="false" Priority="30" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Intense Quote"/>
  <w:LsdException Locked="false" Priority="66" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 2 Accent 1"/>
  <w:LsdException Locked="false" Priority="67" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 1 Accent 1"/>
  <w:LsdException Locked="false" Priority="68" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 2 Accent 1"/>
  <w:LsdException Locked="false" Priority="69" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 3 Accent 1"/>
  <w:LsdException Locked="false" Priority="70" SemiHidden="false"
   UnhideWhenUsed="false" Name="Dark List Accent 1"/>
  <w:LsdException Locked="false" Priority="71" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Shading Accent 1"/>
  <w:LsdException Locked="false" Priority="72" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful List Accent 1"/>
  <w:LsdException Locked="false" Priority="73" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Grid Accent 1"/>
  <w:LsdException Locked="false" Priority="60" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Shading Accent 2"/>
  <w:LsdException Locked="false" Priority="61" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light List Accent 2"/>
  <w:LsdException Locked="false" Priority="62" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Grid Accent 2"/>
  <w:LsdException Locked="false" Priority="63" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 1 Accent 2"/>
  <w:LsdException Locked="false" Priority="64" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 2 Accent 2"/>
  <w:LsdException Locked="false" Priority="65" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 1 Accent 2"/>
  <w:LsdException Locked="false" Priority="66" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 2 Accent 2"/>
  <w:LsdException Locked="false" Priority="67" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 1 Accent 2"/>
  <w:LsdException Locked="false" Priority="68" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 2 Accent 2"/>
  <w:LsdException Locked="false" Priority="69" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 3 Accent 2"/>
  <w:LsdException Locked="false" Priority="70" SemiHidden="false"
   UnhideWhenUsed="false" Name="Dark List Accent 2"/>
  <w:LsdException Locked="false" Priority="71" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Shading Accent 2"/>
  <w:LsdException Locked="false" Priority="72" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful List Accent 2"/>
  <w:LsdException Locked="false" Priority="73" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Grid Accent 2"/>
  <w:LsdException Locked="false" Priority="60" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Shading Accent 3"/>
  <w:LsdException Locked="false" Priority="61" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light List Accent 3"/>
  <w:LsdException Locked="false" Priority="62" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Grid Accent 3"/>
  <w:LsdException Locked="false" Priority="63" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 1 Accent 3"/>
  <w:LsdException Locked="false" Priority="64" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 2 Accent 3"/>
  <w:LsdException Locked="false" Priority="65" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 1 Accent 3"/>
  <w:LsdException Locked="false" Priority="66" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 2 Accent 3"/>
  <w:LsdException Locked="false" Priority="67" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 1 Accent 3"/>
  <w:LsdException Locked="false" Priority="68" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 2 Accent 3"/>
  <w:LsdException Locked="false" Priority="69" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 3 Accent 3"/>
  <w:LsdException Locked="false" Priority="70" SemiHidden="false"
   UnhideWhenUsed="false" Name="Dark List Accent 3"/>
  <w:LsdException Locked="false" Priority="71" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Shading Accent 3"/>
  <w:LsdException Locked="false" Priority="72" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful List Accent 3"/>
  <w:LsdException Locked="false" Priority="73" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Grid Accent 3"/>
  <w:LsdException Locked="false" Priority="60" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Shading Accent 4"/>
  <w:LsdException Locked="false" Priority="61" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light List Accent 4"/>
  <w:LsdException Locked="false" Priority="62" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Grid Accent 4"/>
  <w:LsdException Locked="false" Priority="63" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 1 Accent 4"/>
  <w:LsdException Locked="false" Priority="64" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 2 Accent 4"/>
  <w:LsdException Locked="false" Priority="65" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 1 Accent 4"/>
  <w:LsdException Locked="false" Priority="66" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 2 Accent 4"/>
  <w:LsdException Locked="false" Priority="67" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 1 Accent 4"/>
  <w:LsdException Locked="false" Priority="68" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 2 Accent 4"/>
  <w:LsdException Locked="false" Priority="69" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 3 Accent 4"/>
  <w:LsdException Locked="false" Priority="70" SemiHidden="false"
   UnhideWhenUsed="false" Name="Dark List Accent 4"/>
  <w:LsdException Locked="false" Priority="71" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Shading Accent 4"/>
  <w:LsdException Locked="false" Priority="72" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful List Accent 4"/>
  <w:LsdException Locked="false" Priority="73" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Grid Accent 4"/>
  <w:LsdException Locked="false" Priority="60" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Shading Accent 5"/>
  <w:LsdException Locked="false" Priority="61" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light List Accent 5"/>
  <w:LsdException Locked="false" Priority="62" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Grid Accent 5"/>
  <w:LsdException Locked="false" Priority="63" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 1 Accent 5"/>
  <w:LsdException Locked="false" Priority="64" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 2 Accent 5"/>
  <w:LsdException Locked="false" Priority="65" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 1 Accent 5"/>
  <w:LsdException Locked="false" Priority="66" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 2 Accent 5"/>
  <w:LsdException Locked="false" Priority="67" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 1 Accent 5"/>
  <w:LsdException Locked="false" Priority="68" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 2 Accent 5"/>
  <w:LsdException Locked="false" Priority="69" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 3 Accent 5"/>
  <w:LsdException Locked="false" Priority="70" SemiHidden="false"
   UnhideWhenUsed="false" Name="Dark List Accent 5"/>
  <w:LsdException Locked="false" Priority="71" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Shading Accent 5"/>
  <w:LsdException Locked="false" Priority="72" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful List Accent 5"/>
  <w:LsdException Locked="false" Priority="73" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Grid Accent 5"/>
  <w:LsdException Locked="false" Priority="60" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Shading Accent 6"/>
  <w:LsdException Locked="false" Priority="61" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light List Accent 6"/>
  <w:LsdException Locked="false" Priority="62" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Grid Accent 6"/>
  <w:LsdException Locked="false" Priority="63" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 1 Accent 6"/>
  <w:LsdException Locked="false" Priority="64" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 2 Accent 6"/>
  <w:LsdException Locked="false" Priority="65" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 1 Accent 6"/>
  <w:LsdException Locked="false" Priority="66" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 2 Accent 6"/>
  <w:LsdException Locked="false" Priority="67" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 1 Accent 6"/>
  <w:LsdException Locked="false" Priority="68" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 2 Accent 6"/>
  <w:LsdException Locked="false" Priority="69" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 3 Accent 6"/>
  <w:LsdException Locked="false" Priority="70" SemiHidden="false"
   UnhideWhenUsed="false" Name="Dark List Accent 6"/>
  <w:LsdException Locked="false" Priority="71" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Shading Accent 6"/>
  <w:LsdException Locked="false" Priority="72" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful List Accent 6"/>
  <w:LsdException Locked="false" Priority="73" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Grid Accent 6"/>
  <w:LsdException Locked="false" Priority="19" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Subtle Emphasis"/>
  <w:LsdException Locked="false" Priority="21" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Intense Emphasis"/>
  <w:LsdException Locked="false" Priority="31" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Subtle Reference"/>
  <w:LsdException Locked="false" Priority="32" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Intense Reference"/>
  <w:LsdException Locked="false" Priority="33" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Book Title"/>
  <w:LsdException Locked="false" Priority="37" Name="Bibliography"/>
  <w:LsdException Locked="false" Priority="39" QFormat="true" Name="TOC Heading"/>
 </w:LatentStyles>
</xml><![endif]--><!--[if gte mso 10]>
<style>
 /* Style Definitions */
 table.MsoNormalTable
	{mso-style-name:"Table Normal";
	mso-tstyle-rowband-size:0;
	mso-tstyle-colband-size:0;
	mso-style-noshow:yes;
	mso-style-priority:99;
	mso-style-qformat:yes;
	mso-style-parent:"";
	mso-padding-alt:0in 5.4pt 0in 5.4pt;
	mso-para-margin-top:0in;
	mso-para-margin-right:0in;
	mso-para-margin-bottom:10.0pt;
	mso-para-margin-left:0in;
	line-height:115%;
	mso-pagination:widow-orphan;
	font-size:11.0pt;
	font-family:"Calibri","sans-serif";
	mso-ascii-font-family:Calibri;
	mso-ascii-theme-font:minor-latin;
	mso-hansi-font-family:Calibri;
	mso-hansi-theme-font:minor-latin;
	mso-bidi-font-family:"Times New Roman";
	mso-bidi-theme-font:minor-bidi;}
</style>
<![endif]--></p>
<p class="MsoNormal">
	<span style="font-size:16px;"><span style="line-height: 115%;"><img alt="remit" border="1" height="284" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/remittance.jpg" vspace="10" width="449" /><br />
	<br />
	<br />
	Income received as the Nepali workers’ remittances working abroad has become an automatic instrument for poverty reduction in Nepal. Remittance has been recognised as a key to solve various economic ills afflicting the country. Moreover, it has raised some obvious questions. For instance, long the national economy can solely depend on the source of remittance to sustain itself? Is it possible to use the remitted money to improve social livelihood of the Nepali people or, can it be used in more productive sector? Can our policymakers think beyond the box of remittance economy?</span></span></p>
<p class="MsoNormal">
	<span style="font-size:16px;"><span style="line-height: 115%;">&nbsp;</span></span></p>
<p class="MsoNormal">
	<span style="font-size:10.0pt;line-height:115%">55 New Business Age | September 2012</span></p>
<p class="MsoNormal">
	<span style="font-size:10.0pt;line-height:115%">&nbsp;<br />
	<br />
	<img alt="coverstory" border="1" height="339" hspace="5" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/coverstory_1.jpg" vspace="5" width="300" /><br />
	</span></p>
<p class="MsoNormal">
	<span class="A8"><span myriad="" style="font-size:24.0pt;line-height:
115%;font-family:">COVER STORY</span></span></p>
<p class="Pa9" style="text-align:justify">
	<span class="A13"><span style="font-size:
59.0pt;color:windowtext">T</span></span><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">he total households receiving remittances in Nepal stood at 55.8 per cent in the year 2010-11 as revealed by the findings of Nepal Living Standards Survey (NLSS)- III released by the Central Bureau of Statistics (CBS). This is a sharp rise from the year 2003-04 when only 31.9 per cent households in Nepal received remittances. Another remarkable statistic in the report was the 18 per cent decline in absolute poverty in the six years between 2003-04 and 2009- 10. According to the report, only 13 per cent Nepalis now remain below the absolute poverty line (the benchmark being 2,200-calorie intake per day per person). Nepal ranks sixth among the countries in terms of Remittances-to- GDP ratio as stated in the World Bank Report-2011. It rose from Rs 47.5 billion in 2001-02 to Rs 231.73 billion in 2009- 10. Remittances-to-GDP ratio almost doubled from 10.3 per cent in 2001-02 to 19.6 per cent in 2009-10. Economists estimate that this figure will rise to 20 per cent in 2012-2014. <br />
	</span></p>
<p class="Pa10" style="text-align:justify">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">It is estimated that approximately 2.2 million Nepalis are working as migrant workers in various countries. Nearly 90 per cent of migrant workers have found employment in Qatar, Malaysia, Saudi Arabia, the UAE, and Kuwait. Among them, 10 per cent of migrant labors are female. According to Bal Bahadur Tamang, the President of Foreign Employment Association of Nepal, the growing construction business in the Gulf countries has created a demand for large number of Nepali workers. “Qatar is hosting a showpiece World Cup Football tournament in 2022 and therefore, the amount of construction work happening there has increased the demand of Nepali workers substantially,” informed Tamang. <br />
	<br />
	Increasing remittance flow has emerged as a favored poverty alleviation strategy in developing countries, particularly in Nepal. Policymakers believe that the financial contribution from migrant workers has provided impetus to development activities. They also opine that the scope of such revenue should be further enhanced. Nara Bahadur Thapa, Chief Manager of Nepal Rastra Bank at Biratnagar said, “The robust relationship between the growth in remittance and the reduction in poverty has evolved on account of a significant growth in the number of rural poor people seeking jobs in the Gulf countries.” </span></p>
<p class="Pa10" style="text-align:justify">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">“Annually, Nepal is receiving Rs 200 billion as remittance,” shared Dr Ganesh Gurung, a Remittance Economist. Based on the data of the Department of Foreign Employment, 1,500 people leave the country for foreign employment every day on an average as of August 2011. Quite naturally, the country has also been receiving proportional amount of remittances from these migrant workers employed abroad. From mid-July to mid-August 2011, the number of Nepalis going abroad for jobs was 45,165. This heavy reliance on foreign employment has shifted the Nepali economy from an agriculture-based economy towards a remittance-based one. </span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">The NLSS, 2010-11 reported that the common Nepalis’ access to basic facilities has improved over the years. Despite political upheavals and unrest, the average household income of Nepalis has increased by more than four-fold to Rs 202,374 over the span of 15 years due to increased receipt of remittances. Thapa shared that the remittance thus received is widely spent on daily consumption, followed by loan repayment and household property instead of capital formation. A Nepal Rastra Bank (NRB) report says that 78.9 per cent of the remittance is used on daily consumption, whereas 7.1 per cent of the remittance is used to repay loans followed by 4.5 per cent on household property, 3.5 per cent on education and only a minimal 2.4 per cent is used for capital formation. According to Dr Gurung, the increased remittance per household has not only increased consumption pattern but changed the social structure too. The nominal per capita consumption expenditure in aggregate increased from Rs 15,848 in 2003-04 to Rs 34,829 in 2010, at an annual average growth rate of 14 per cent. The survey also identified urban hills (9 per cent) and Kathmandu (11 per cent) having the least poor population while the highest population identified as poor live in the mountains (42 per cent) and rural hills in the Mid and Far-West regions (37 per cent).</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">According to Tamang, a significant chunk of the money received via remittance is being spent on imports and real estate instead of it being invested in productive sectors. The main challenge does not lie in receiving remittance but in channelizing it into productive use. Therefore, remittance should be included in the national development agenda to monitor its use. Though the government has given permission to manpower agencies to open foreign currency account in Nepali commercial banks, the government’s responsibility does not end here. Apart from monitoring and facilitating the use of this income, the government should encourage migrants to hold their income in financial assets within the country rather than abroad.</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">“Income received from remittance source has become an automatic instrument for poverty reduction in Nepal as both the government and the private sector have failed to create adequate number of jobs,” said Thapa. If we compare the domestic savings-to- GDP ratio, which is currently around 10 per cent, and national savings-to- GDP ratio standing at 36.7 per cent, the difference is largely due to remittance. Against the national savings-to-GDP ratio at 36.7 per cent, the total fixed investment-to-GDP ratio is 19.6 per cent, reflecting the failure of Nepali society to make productive use of remittance driven national savings. As of mid-June 2012, foreign exchange stood at Rs 427 billion, sufficient <span style="mso-spacerun:yes">&nbsp;</span>nough to <span style="mso-spacerun:yes">&nbsp;</span>cover merchandise and services import of around 10 months. This reflects two things. First, remittance is an important source of foreign exchange earnings, underpinning macroeconomic stability of Nepal. <br />
	</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">Second, the magnitude of foreign exchange indicates that both the government and the private sector have failed to make productive use of foreign exchange accumulated from remittance. Gurung opines that there is no question of utilising remittance for income generating activities for families living below the poverty line. In their case, remittance will take care of consumption. However, the families managing to save out of remittance can be encouraged to invest in income generating activities that could be an issue of micro management of remittance. Similarly, families engaged in agricultural activities and receiving remittance in excess of their consumption requirements should be encouraged to invest in high yielding crops and animal husbandry. This will help boost the agricultural production and consequently, their incomes. <br />
	</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">On the other hand, families residing in urban and semi-urban areas should be encouraged to invest in small services such as tailoring, taxi driving and undertaking petty businesses. For this to happen, the government can help establish multipurpose urban cooperatives. Lila Prasad Sitaula, Executive Director at Foreign Exchange Management Department of Nepal Rastra Bank, said, “The government, together with the NRB has introduced few important policies to utilize remittance productively. One of those is the issuance of remittance bond targeting migrant workers. Along with it, the NRB is formulating a policy to encourage banks and financial institutions for opening up branches in the rural areas, thus, bringing money in the banking system and channelize it in the productive sector. Furthermore, some provisions have been made to allow remittance companies to manage their forex balance in a more profitable manner, added Sitaula.</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">The government also started issuing foreign employment bond for mobilizing funds and making productive use of remittance since 2009-10 but so far, it has failed to gain popularity among the Nepali migrant workers abroad. According to Chandra Dhakal, Chairman of Nepal Remitters’ Association, remittance is the major factor in improving Nepal’s position in Human Development Index and improving poverty level. Remittance has played a major role in improving livelihood of millions of Nepalis. It has helped people have better access to health, education and sanitation. Dhakal added that the time has come to think about the productive investment of remittance for economic development of the country because capital has been a major constraint. <br style="mso-special-character:line-break" />
	<br style="mso-special-character:line-break" />
	</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">&nbsp;The Monetary Policy of 2012-13 has encouraged and facilitated those companies wishing to establish remittance business in various regions and countries. “We have realized the need for further expanding money transfer agencies to the countries where the supply of remitting service is few or not in existence,” shared Sitaula. Additionally, necessary bylaws have been introduced governing money transfer business activities. The government should prepare proper plans and policies in order to encourage the migrant workers to use formal channels instead of using illegal channels like ‘hundi’. Besides, the government should support the recruitment agencies in receiving recruitment charges, visa charges etc through proper banking channels which should automatically reduce the use of illegal banking channels.</span><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:"><br />
	<br />
	International Money Express (IME) was the first Nepali financial institution starting its services to control the flow of remittance through banking channel twelve years ago. And since the last few years, commercial banks through their representatives and agents have also been involving in money remitting business. As per a recent report of central bank, the total remittance for the first 11 month of FY 2011-12 stood at Rs 320.38 billion showing a growth of 39.6 per cent compared to a growth of 10.1 per cent during the corresponding period of the previous year. Dhakal said, “Though we don’t have any data related to remittance coming through remittance companies, we can estimate that more than 70 per cent of it is channeled through remittance companies.” According to him, remittance companies are doing their best in increasing their network and enhancing their service to bring more remittances through formal channels. The central bank and the government should cooperate and facilitate remittance companies in this noble endeavor, he said.</span> <span myriad="" style="font-size:10.0pt;mso-bidi-font-family:"><br />
	<br />
	“Commercial banks are coming into this business and making it more competitive, however, there is a huge misunderstanding in the scope of work for remittance companies and commercial,” said Dhakal. The present policies have been formulated on the assumption that remittance companies will bring the foreign currency and sell it to commercial banks so that both will be benefited. It is an irony that remittance companies are compelled to sell foreign currency to commercial banks, with whom they are competing at source. Since there is huge disparity in facilities available to remittance companies and commercial banks in terms of foreign currency, the central bank needs to review its policy to ensure sustainability of remittance companies, which are playing an instrumental role in Nepal’s inward remittance. On the other hand, the comfortable reserve position in the country leads to sufficient liquidity in the banking system that is being channelized into productive sectors. Moreover, the increase of foreign exchange reserves allows moving towards gradual liberalization of foreign exchange market.</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">“Preserving the value of foreign exchange is the main concern of the NRB,” said Sitaula. According to him, the central bank has been managing its foreign currency assets keeping it in major international currencies and different asset portfolios in accordance with the principle of portfolio diversification and minimizing currency risk. “A chunk of reserves is invested in highly liquid securities especially sovereign bonds and rest is placed with foreign central banks, BIS and different highly rated foreign commercial banks based on the ratings of international rating agencies such as Standard &amp; Poor’s and Moody’s,” shared Sitaula. While safety and liquidity constitute the main objectives of reserve management in Nepal, return optimization becomes an embedded strategy within this framework, he added.</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">Remittance increases foreign currency availability in the domestic market and raises national savings. Availability of foreign currency, in turn, facilitates financing of essential import and can avert possible balance of payments (BoP) crisis. Despite the rising trade deficit, Nepal witnessed a record current account as well as BoP surplus in the last year because of substantial flow of remittances. Had remittance flows stagnated last year, Nepal would have witnessed deficit in the current account and lesser BoP surplus, said Sitaula. Remittances alone can finance about 90 percent of merchandise trade deficit of the country.</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">These facts reveal a crucial role remittances play in attaining macroeconomic stability in the country. Though increasing remittance has its own advantages, it is also true that over dependency on it in the end will eventually lead to economic failure if the flow of remittance is disrupted. “Of course, nothing would be better than bringing development projects with sufficient funding to utilize the labor force in Nepal itself. For this, the long-term focus ought to be the development of entrepreneurial capabilities of the Nepalis so that remittances could be turned into productive investment that brings higher growth and employment generation,” said Gurung.</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">However, having said that, remittance has been the only hope in recent times to rescue the faltering economy from the low-level equilibrium trap when the implementation of capital expenditure programme is likely to go on a wild goose chase. Remittance has been imperative for survival, poverty reduction, and eliminating impoverished condition of life in the country. At the same time, the government has to resolve these problems, as remittance is one of the growing and most crucial sectors of the economy.</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">&nbsp;</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">&nbsp;</span></p>
<p class="Pa1">
	<span class="A8"><span style="font-size:24.0pt;color:windowtext">COVER STORY</span></span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">&nbsp;</span></p>
<p class="MsoNormal">
	<span class="A49"><span myriad="" style="font-size:23.0pt;line-height:
115%;font-family:">‘Remittances can have Long-term Impact if Channeled into Productive Investment’<br />
	<br />
	<br />
	<img alt="ganesh gurung" border="1" height="313" hspace="5" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/ganesh-gurung.jpg" vspace="5" width="300" /><br />
	</span></span></p>
<p class="Pa1">
	<span style="font-size:16px;"><span class="A5"><span style="color: windowtext;">DR GANESH GURUNG </span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:16px;"><span class="A5"><span color:="" style="line-height: 115%; font-family: ">&nbsp;Remittance Economist</span></span></span></p>
<p class="MsoNormal">
	<strong><span style="font-size:16px;"><strong>&nbsp;</strong><br />
	&nbsp;</span></strong></p>
<p class="Pa23" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">How do you view the contribution of remittance to the reduction of poverty in Nepal?</span></strong></p>
<p class="Pa10" style="text-align:justify">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">This, in fact, is an interesting aspect. The post conflict political situation has not witnessed major economic growth and hence unemployment and underemployment is an ever growing phenomenon. The political unrest decelerated the pace of industrial expansion and halted plenty of small and medium enterprises all over the country creating unemployment throughout the country. In that situation, a huge number of migrant workers amplified the number because of which, foreign employment became an emerging business in Nepal’s context. </span></p>
<p class="Pa10" style="text-align:justify">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">In my opinion, remittance has played a vital role in poverty reduction. Various reports and planning documents published in recent times have attributed the dramatic fall in absolute poverty to the inflow of remittances in Nepal. The percentage of all households receiving remittances in Nepal during the year 2010/11 was 55.8 per cent. This is a sharp rise from the year 2003/04 when it stood at 31.9 per cent. There has been an 18 per cent decline in absolute poverty in the six years between 2003/04 and 2009/10. Therefore, according to me, foreign employment is a major economic phenomenon in Nepal and its relation to the economic growth of the country is integral. </span></p>
<p class="MsoNormal">
	 </p>
<p class="Pa23" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">What is the trend of use of remittance in Nepal in general households? What is the ratio of its use in productive and unproductive sectors? How do you analyze such trends? </span></strong></p>
<p class="Pa10" style="text-align:justify;text-indent:14.0pt">
	<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">I believe that there are also some long-term opportunities brought about by foreign employment. Children of the foreign employment workers are getting quality education paid for by the remittances from their parents. The nation can benefit in the long term out of this trend as skilled and educated manpower is produced for the economy.<br />
	<br />
	The remittance sent by the migrant workers can be used to further generate wealth in the country. Besides spending on consumption, it has to be invested in productive sectors, which would bring about some positive change on the major macroeconomic variables of the country. Remittances can produce long term impact only if it is channeled into productive investment. Going by the current trends of consumption in Nepal, if the remittances are soaked up by consumption only and are not turned into investments, the short term boost provided by it in the economy will not be sustainable. Productivity will decline and the economic choices get tougher if the situation is not addressed in time and is stalled being shortly content with the remittance-based income. More remittance money is spent on consumption than in any other aspects. Only 2.4 per cent of remittance money is spent for capital formation in our country.</span> <span myriad="" style="font-size:10.0pt;mso-bidi-font-family:"><br />
	<br />
	Due to increase in revenues from remittances, the currency of a country becomes stronger compared to that of other nations resulting in exports becoming more expensive for other countries to buy. This can make the manufacturing sector less competitive. Thus, with the increase in the purchasing capacity of households receiving remittance, there is high demand of consumption and imported goods. There has been an appreciation of real exchange rate due to rise in the price of non-tradable with respect to tradable. Furthermore, there has been an erosion of manufacturing sector entailing to their reduced competitiveness. </span></p>
<p class="MsoNormal">
	 </p>
<p class="MsoNormal">
	 </p>
<p class="MsoNormal">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">How do you compare the remittance figures between today and five years ago?</span></strong></p>
<p class="Pa10" style="text-align:justify;text-indent:14.0pt">
	<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">Despite the huge contribution of remittance to GDP, Nepal’s economic growth rate has never exceeded 4 per cent except in 2005 although the indication is that remittance will go up in the years to come. A remittance share of 20 per cent of the total GDP should have created enough employment opportunities, but the unemployment rate still stands at 42 per cent. Furthermore, there appears to be an inversely proportional relationship between employment abroad and industrial growth. For instance, industrial production growth rate was only 1.8 per cent in 2011 whereas from 2002 to 2005, the growth rate was 8.7 per cent when remittance inflow was far less. In this ratio, the remittance pattern is in the increasing trend if we compare the figures of 2010/11 and 2004/05. However, the challenge is to channelize the remittance in productive sector. </span></p>
<p class="MsoNormal">
	 </p>
<p class="MsoNormal">
	<strong>&nbsp;</strong></p>
<p class="Pa23" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">What is the contribution of remittance in GDP? </span></strong></p>
<p class="Pa23" style="margin-top:5.0pt;text-align:justify">
	 </p>
<p class="Pa10" style="text-align:justify">
	&nbsp;<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">It is estimated that the number of Nepali migrant workers is officially 1.4 million and the number of undocumented migrant workers is estimated to be the same. Annually, Nepal is receiving Rs 200 billion as remittance and its contribution to GDP is about 20 per cent. According to World Bank report - 2011, Nepal ranks sixth among countries in whose GDP remittance holds a very high share. It rose from Rs 47.5 billion in 2001/02 to Rs 231.73 billion in 2009/10. Remittance-to-GDP ratio almost doubled from 10.3 per cent in 2001/02 to 19.6 per cent in 2009/10. Therefore, we can say that there has been a positive impact of remittance in GDP. </span></p>
<p class="MsoNormal">
	 </p>
<p class="Pa23" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">How successful has the state become to utilize the remittance income in the development activities? </span></strong></p>
<p class="Pa10" style="text-align:justify">
	<strong>&nbsp;</strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">It is rather disappointing that the state has not been able to utilize the remittance to the optimal level. Very less has been done in this aspect. With a huge number of migrant workers working across the globe, remittances are emerging as a new way for alleviating poverty in the developing and least developed countries. </span></p>
<p class="Pa10" style="text-align:justify">
	&nbsp;<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">Due to unhealthy investment environment in the home country, remittance money has not been used productively which has made Nepal a consumption oriented economy rather than an investment oriented one. This has slowed the pace of development activities in the country. Presently, 78.9 per cent of remittance money is used for daily consumption while only 2.4 per cent is being used in the productive sector. So, the government should create an investment friendly environment in order to use the remittance money in the productive sector. </span></p>
<p class="Pa10" style="text-align:justify">
	&nbsp;<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">In my opinion, the migrant workers should be trained and well informed about what they can do with the money they earn at destination countries. The recruiting agencies should take them in confidence that even after they return to their country, they could have a secure future. Different plans and policies have to be made to create investment friendly environment for these workers. In addition, proper investment environment in the home country acts as a backup in case of emergencies oversees and even during financial crisis. Similarly, the government should introduce measures to encourage savings among migrant workers and their remittance recipient families. </span></p>
<p class="MsoNormal">
	 </p>
<p class="Pa23" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">What is your vision to utilize the expertise of the private sector as well as the state to utilize the earning from remittance? </span></strong></p>
<p class="Pa10" style="text-align:justify;text-indent:14.0pt">
	<strong>&nbsp;</strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">Private sector has a great role to play here. They are the ones who should be making attractive and feasible business ventures that are appropriate for migrants. Migrant workers do not know about the viable projects where their money can be invested. Therefore, in collaboration with these migrant workers, the private sector should establish business ventures that are not only viable but also fulfill the need of the country. Thus, both will have a win-win situation.<br />
	<br />
	People recruited for foreign must be provided several types of training that can enhance their productivity to get better jobs. Proper trainings should be provided to these workers to gain required skills in the destination country. Another major area where private companies are key players is the remittance receiving procedures. There are dozens of private money transfer companies that are providing the service and transferring money through legal and formal channels. The spread of such private services to even the rural areas of the country suggests increasing demand for their services and profitability potential. </span></p>
<p class="MsoNormal">
	&nbsp; <br />
	 </p>
<p class="Pa23" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">What is the situation of Labor Desk and Welfare Fund in the present situation? Is there enough transparency? <br />
	<br />
	</span></strong></p>
<p class="Pa10" style="text-align:justify;text-indent:14.0pt">
	<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">The Labor Desk has acted more as an extended bureaucracy on the part of the government. The Welfare Fund has collected Rs one billion as of September 2011. However, no significant work has been accomplished to properly utilize this amount. There is less transparency regarding the fund collected thus far. In my opinion, the fund should be utilized to provide trainings, skill-enhancing workshops, and information required for foreign employment. This way, the migrant workers will be well equipped with required skills and well informed about the destination country. This will automatically minimize the risk of the labors being cheated or discriminated at the host nation. </span></p>
<p class="MsoNormal">
	<strong>&nbsp;</strong></p>
<p class="MsoNormal">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">What is the contribution of remittance in Balance of Payments?</span>&nbsp; <br />
	</strong></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">Nepal was compelled to borrow $42.5 million from the International Monetary Fund under its rapid credit facility to address BoP deficit one-and-a-half years ago. However, the acceleration in the growth of remittance along with the improvement in the service account has helped maintain a comfortable balance of payments (BoP) situation. After remaining in deficit for two years, the country’s BoP turned surplus in the second last month of the last fiscal year and has continued to grow since. In the same period last year, the BoP had recorded a deficit of Rs 5.72 billion.</span></p>
<p class="MsoNormal">
	<strong>&nbsp;</strong></p>
<p class="MsoNormal">
	<strong><strong>&nbsp;</strong></strong></p>
<p class="Pa23" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">An initiative of the government-foreign employment bond has said to have failed miserably. How can such initiatives be made successful?</span></strong></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">In my opinion, it is necessary to create a mechanism that provides incentives to the stakeholders so that they are keen to sell on the one hand and on the other, interest rate and other facilities given are not attractive for the migrant workers. Thus, the government should make the bond an attractive package and provide them some more incentive so that it is comparatively profitable for them to buy.</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">Foreign employment bond is one of the key instruments that the government has adopted to raise internal loans. However, lack of awareness and complicated procedures are responsible for the low subscription. The first foreign employment bond, issued in fiscal year 2009-10 had seen subscription worth Rs 4.6 million of the total issue of Rs one billion at 9.5 per cent interest. Likewise, last year too, bonds worth only Rs four million of the total issue worth Rs five billion were sold.</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">The repetitive failure of the bond to attract enough investment from the migrant worker community has been attributed to the absence of proper marketing channels. The failure of the last two batches had got NRB to look into diverse markets allowing even Non Resident Nepalis (NRN) and returnee migrant workers to purchase the bond instead of only focusing on migrant workers in the Gulf countries and Malaysia. The layman is missing out on booking good returns by investing in bonds due to lack of awareness about investing in government securities.</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">&nbsp;</span></p>
<p class="Pa1">
	<span class="A8"><span style="font-size:24.0pt;color:windowtext">COVER STORY</span></span></p>
<p class="Pa1">
	<span class="A8"><span style="font-size:24.0pt;color:windowtext"><span style="mso-spacerun:yes">&nbsp;<br />
	<img alt="bala bahadur tamang" border="1" height="293" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/BAL-BAHADUR-TAMANG.jpg" vspace="10" width="300" /></span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:18px;"><span class="A5"><span color:="" style="line-height: 115%; font-family: ">BAL BAHADUR TAMANG <br />
	President <br />
	Foreign Employment Association</span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:18px;"><span class="A5"><span style="line-height: 115%; font-family: ">&nbsp;</span></span></span></p>
<p class="MsoNormal">
	<span class="A5"><span myriad="" style="font-size:10.0pt;line-height:
115%;font-family:">&nbsp;</span></span></p>
<p class="MsoNormal">
	<strong><span class="A5"><span myriad="" style="font-size:10.0pt;line-height:
115%;font-family:">&nbsp;</span></span></strong></p>
<p class="Pa23" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">Which are the countries currently demanding Nepali labors on a big scale? What kind of wages do these migrant workers earn abroad? </span></strong></p>
<p class="MsoNormal">
	<strong>&nbsp;</strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">Most of the world’s estimated 150 million migrants are people searching for improved economic opportunities abroad. Nepal has not been able to escape this phenomenon either. Economic migration to the Middle East from countries in South Asia and other parts of the world was spurred-on by the oil boom in the early 1970s. The reasons behind the migration to the Gulf countries are almost same in Nepal as other parts of the world. Foreign labor migration has developed in such a way over the decades that it has shifted Nepal’s agricultural-based economy towards a remittance based one.</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">Nepalis labors are demanded mostly in countries like Malaysia, Dubai, Saudi Arabia and Qatar. Most of the Nepali labors ranging from unskilled, semi-skilled and skilled are equally opting to receive foreign employment to these countries. The minimal wage rate for unskilled labor is 800, semi-skilled is 1,000 and for skilled labor is 1,200 Saudi Riyal. Apart from it, some European countries are also demanding skilled Nepali labors. However, the Middle East nations stand above in this aspect.</span></p>
<p class="MsoNormal">
	<strong>&nbsp;</strong></p>
<p class="Pa23" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">Why is it that the Nepali manpower agencies have not been able to send skilled manpower to the developed countries? How can this problem be resolved? </span></strong></p>
<p class="MsoNormal">
	<strong>&nbsp;</strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">There is a demand of skilled workers in the international labor market. However, there is a vast difference while comparing the educational and technical standards of Nepali labors with those of the other countries. It is believed that Nepali workers are accepted in East and South Asia as well as the Gulf countries only because they come cheap and do whatever job is given to them. They lack required technical skills which makes it difficult for them to get visas for recruitment in the developed nations.</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">I strongly believe that the government should improve the curriculum in schools so that it can provide more practice-based knowledge. Apart from it, the government should also conduct consultation meetings with the experts, occupational groups, trade unions and foreign employment enterprises to make rules and regulations for the promotion and management of foreign employment occupation.</span></p>
<p class="MsoNormal">
	 </p>
<p class="MsoNormal">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">How do you view the conduct of manpower agencies operating in Nepal? What are the measures that your association is initiating to give this industry more credibility?&nbsp;&nbsp; </span></strong><br />
	<br />
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">The main objective of the association is to monitor the manpower agencies providing foreign employment services, for their efficacy and transparency. We are working to make foreign employment business safe, well managed and decent as well as protect the rights and interests of the foreign bound workers and foreign employment entrepreneurs. There are many incidences of fake employment contracts, visas and forged documents etc. The result is that many Nepalis become stranded in foreign countries or are deported from these destinations where they go for work.</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">A large number of unlicensed agencies exist in the manpower market in Nepal today. Estimates suggest that more than 200 unlicensed agencies are clandestinely involved in this business and bypass all official channels. For example, there are some manpower agencies charging more than Rs 2-3 lakhs per person for a position of manual labor in the Gulf countries or Malaysia. However, the actual cost should be much less. The association is closely monitoring the manpower agencies to make them follow the code and conduct of FEA. <br />
	</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">A high-level advisory committee with the participation of the Ministries of Labor and Finance, the National Planning Commission and foreign employment organizations should jointly work, in order to expand foreign employment opportunities and increment the reliability of agents. The association is preparing a draft of proposal concerning the trainings that is to be provided to the workers seeking foreign employment opportunities in the days ahead.</span></p>
<p class="MsoNormal">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">How can ‘Hundi’ transaction be controlled? Why have manpower agencies not been able to encourage the migrant workers to use formal channels for remittance flow?</span></strong></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">Remittance is one of the important sources of income. The contribution of remittance on Gross National Product is 23.6 per cent. In some cases, it seems that the process of remittance is lengthy and costly. The government should prepare proper plans and policies in order to encourage the migrant workers to use formal channels for remittance purpose. It should provide orientation classes and distribute booklets mentioning the disadvantages of using illegal banking channels like hundi, for instance. The government should also support the recruitment agencies in receiving recruitment charges, visa charges etc through proper banking channels and thereby automatically reduce the use of illegal banking channels. Currently, about 25 per cent of remittance flow is being carried out through hundi. The only way we can control hundi transactions is through easy banking access and close monitoring.</span></p>
<p class="MsoNormal">
	 </p>
<p class="MsoNormal">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">What is your suggestion to direct the inflow of remittance exclusively from banking channels?</span></strong></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">We have to make the migrant workers understand that huge amounts can be invested in micro, technological and small and medium enterprises. This not only generates employment opportunities, but also stimulates demand for goods and services leading to increment in household income and acquisition of real estate. We can do this by providing trainings to migrant workers before they leave for their destination countries. We have to make them realize that their money would be invested in securing their future and they would have a stake in government projects. It will definitely encourage them to use the formal channels of remittance flow. Apart from it, the easy mechanism for remittance flow through banking channel has to be set up accordingly. Only then, the migrant workers would be encouraged to use the banking channel to send their money to Nepal.</span><br />
	<br />
	 </p>
<p class="MsoNormal">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">How do you think the families back in Nepal are utilizing the money received from migrant workers?</span> <br />
	</strong></p>
<p class="Pa10" style="text-align:justify">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">Instead of the money going to productive sectors, a significant chunk of the remittance is being spent on imports and real estate. Households that owned houses have decreased while those renting houses have increased. The houses of migrant workers have been modernized replacing thatched roof with steel roofs. Access to power has substantially increased too so are the households with safe drinking water, toilets and LPG for cooking. Consumption expenditure on food, housing, and education has increased resulting in a rise in the living standard. However, less money has been invested for capital formation at the macroeconomic level. </span></p>
<p class="MsoNormal">
	 </p>
<p class="MsoNormal">
	<strong>&nbsp;<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">It is said that the Foreign Employment Bond issued by the government has failed due to the uncooperative behaviors of manpower agencies. What is your take on it? What is your suggestion to best utilize the remittances sent by the migrant workers?</span><br />
	</strong></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">It is very unfair to say that manpower agencies have shown uncooperative behavior regarding the Foreign Employment Bond. Actually, there has not been enough publicity of the bond to the migrant workers. Besides, the migrant workers do not have much purchasing power as they have many financial obligations that need to be fulfilled with limited income.</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">As of now, remittance is being used in unproductive areas like building houses and other unnecessary products. It would be much better if remittance could be used in productive sector like education, hydro power etc.</span></p>
<p class="MsoNormal">
	<strong>&nbsp;</strong></p>
<p class="Pa23" style="margin-top:5.0pt;text-align:justify">
	<strong>&nbsp;<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">The welfare fund has collected around Rs one billion as of September 2011 but it has not been utilized or any productive work. What are the necessary steps that can be taken to properly utilize this amount?</span></strong></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">According to the Foreign Employment Act 2064 BS, the Foreign Employment Promotion Board is expected to use the amount collected under the Welfare Fund, in conducting foreign employment awareness programs in 72 districts. I, being a member of the said board, raise these issues to the government to address the problems faced by the migrant workers.</span></p>
<p class="Pa10" style="text-align:justify">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">In my opinion, the board has to provide loans with minimum interest to those working abroad. If their families who are in Nepal get loans, there is a good chance that they will invest such amount in the p</span></p>',
			'published' => true,
			'created' => '2012-10-10',
			'modified' => '2012-10-31',
			'keywords' => '',
			'description' => 'Income received as the Nepali workers’ remittances working abroad has become an automatic instrument for poverty reduction in Nepal. Remittance has been recognized as a key to solve various economic ills afflicting the country. Moreover, it has raised some obvious questions.',
			'sortorder' => '600',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 11 => array(
		'Article' => array(
			'id' => '660',
			'article_category_id' => '40',
			'title' => 'Drug Drive : The Rising Business Pharmaceutical Companies In Nepal',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	<strong>By Sushila Budhathoki <br />
	</strong></p>
<p>
	<strong><br />
	</strong></p>
<p>
	<strong><br />
	</strong></p>
<p>
	<br />
	<span style="font-size:14px;"><strong>Drug Drive : The Rising Business Of Pharmaceutical Companies In Nepal</strong></span></p>
<p>
	 </p>
<p>
	<br />
	<br />
	<img alt="coverstory July 2012" border="1" height="226" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/drugs.jpg" vspace="5" width="400" /><br />
	<br />
	Nepal’s pharmaceutical expense is at par with other South Asian countries, thanks to the increase in the number of pharmaceutical companies and their production. In 2008, the total per capita pharmaceutical expenses was US$ 6.96 while the total amount of pharmaceutical expenses stood at Rs 13.09 billion in Nepal. Mahesh Gorkhali, President of Association of Pharmaceutical Producers Nepal (APPON) says Nepali companies are growing at around 15-20 percent annually. The growth has resulted in around 42 per cent command of the market by Nepali products with strong presence and distribution network of marketers in the rural and remote areas. <br />
	<br />
	<br />
	A ‘Market Study Report on Pharmaceutical Products in Nepal’ conducted in 2011’ depicts the shining business of Nepali pharmaceutical industries. According to the report, Nepal experienced significant growth in medicine production in Asia when the growth rate was 11 per cent globally in the year 2009. Nepal obtained annual growth rate of pharmaceutical products at 19.52 per cent even ahead of India who saw 13 percent growth during the same period. According to the report, the total turnover of Nepali companies was approximately Rs 6.8 billion where the company registering lowest sales turnover was Rs 20 million and the highest at about Rs 600 million. The World Health Organization’s report ‘The World Medicines Situations 2004’ listed Nepal among 84 countries that produced pharmaceutical finished products from imported ingredients whereas India was categorized among 17 countries that had innovative capacity. <br />
	<br />
	<br />
	Pradeep Jung Pandey, President of Lomus Pharmaceutical Pvt Ltd says that Nepali companies are capable of producing some of the segments out of big variants of medicinal products. He adds, “We have the potential of increasing the market share at a fast pace.” Most of the Nepali allopathic medicines are of oral dosage forms of tablets, capsules, liquid, syrup, powder for oral suspension while topical preparation like cream, ointment and lotion are also produced. If vaccines, contraceptives, ARV (Anti Retroviral), large volume drugs and few others are excluded, Nepali companies tend to acquire big market share, say experts. Radha Raman Prasad, Director General and Chief Drug Administrator at Department of Drug Administration (DDA) states that medicines can be imported like other goods from the global market. “When the market is dictated by the Nepali industries, the foreign companies that cannot compete will automatically exit,” he says. <br />
	<br />
	<strong><br />
	Demand, Supply and Investment <br />
	</strong><br />
	<br />
	<img alt="" border="1" height="228" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/drugs1.jpg" vspace="5" width="300" /><br />
	<br />
	Demand of Allopathic medicines is high in Nepal. There are altogether 45 Nepali companies operating in the market with 4,677 brands and thousands of products. According to the market study 2011, public expense on pharmaceuticals was Rs 2.96 billion in the year 2008. Similarly, total private expense on pharmaceutical products was Rs 10.06 billion. <br />
	<br />
	<br />
	The size of Nepali medicine market is estimated at Rs 18 billion and the Nepali companies command 42 per cent market share. Manufacturing of oral antimicrobials like penicillin, β-lactam, Non penicillin, antifungals, anthelminthic and antiviral (Simplex) is common while some are engaged in producing non-steroid pain killers, nutritional supplements, enzymes, haematinics, oral steroids, cardiovascular (heart and blood pressure), diabetes, psychiatry (mental disorder) etc. <br />
	<br />
	<br />
	Many Nepali and foreign companies are importing and supplying pharmaceutical products. Their role is significant for fulfilling the demand of various kinds of medicines in Nepal. According to DDA, 257 foreign pharmaceutical companies acquired licenses to sell their allopathic medicines in the year 2067/68. Similarly, 11,769 medicines are registered with DDA including 7,092 foreign and 4,677 Nepali products. There are altogether 1,544 wholesalers and 8,110 retailers throughout the country. <br />
	<br />
	<br />
	The estimated investment in the pharmaceutical industry of Nepal is around Rs 735 million to Rs 1.47 billion. Mahesh Gorkhali, President of Association of Pharmaceutical Producers Nepal (APPON), explores the need of high investment for the establishment of a pharmaceutical Company. He says, “For a good company mainly producing tablets, capsules and liquids, around Rs 25-30 million is required as an investment depending upon the choice of machinery equipments, building, location etc. Establishing an industry in city areas is usually costlier than in the terai or hilly regions.” Nepali industries are not API (Actual Pharmaceutical Ingredients) manufacturers; they import raw materials from other countries. The cost of the raw materials is also increasing investment in the pharmaceutical industries. <br />
	<br />
	<br />
	<strong>Emerging Pharmaceuticals <br />
	</strong><br />
	The number of Nepali allopathic companies has reached 58, according to the DDA. Altogether, 11 new allopathic companies have been registered in the FY 2068/69 whereas only two allopathic companies were registered in the previous year. A number of pharmaceutical companies have been established in different districts like Dang, Bharatpur, Sunsari, Jhapa, Bhaktapur, Kathmandu, Nawalparasi, Birgunj, Lalitpur, Bara and Parsa with investment of billions of rupees (see table). According to the DDA, pharmaceutical companies registered in the FY 2068/69 have proposed a total investment of 1.83 billion Rupees including investment from both herbal and allopathic companies. <br />
	<br />
	<br />
	<strong>Job Destination <br />
	</strong><br />
	<img alt="" border="1" height="220" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/drugs3.jpg" vspace="5" width="300" /><br />
	<br />
	<br />
	Pharmaceutical business has employed thousands of people in pharmaceutical production, distribution and marketing. There are 4,200 medical representatives, 2,474 pharmacists and more than 13,000 professionals employed with various pharmaceutical companies. Regular human resource like managers, accountants, computer operators, receptionist, cleaners, drivers, kitchencrew, HR and admin officers also find work with these organisations. Pharmaceutical companies also provide internship to hundreds of students every year who are mostly recruited in the very companies at a later stage. Sanju Acharya, Administrative Assistant at Nepal Pharmacy Council, opines that there is a huge demand of pharmacy graduates in the pharmaceutical sector. Pharmacy professionals are of two categories; those who have graduated in Pharmacy and above up to PhD level and the ones who complete three year Diploma in Pharmacy under the Council for Technical Education and Vocational Training-CTEVT program. Pharmacy students are highly in demand at Pharmacy colleges as teachers and laboratories and hospitals as researchers or lab assistants. By law, a hospital must own a pharmacy operating 24 hours, which also provides opportunity to these students. Graduates from the Institute of Medicine (IOM) and Kathmandu University are mostly found applying for foreign colleges in search of greener pastures. Having seen the better job opportunities, many colleges have started to include pharmacy as a subject in their curriculum. There are around 16 pharmacy colleges affiliated to Tribhuvan University, Pokhara University and Purbanchal University. Together, they produce pharmacy graduates for the industry with an annual intake of around 600- 650 graduates yearly. Kathmandu University runs B Pharm, M Pharm, Pharm D and PhD programs while CTEVT runs three year Diploma in Pharmacy program at 24 different institutions, with an annual intake of 960 persons. The undergraduates are mostly utilized in community pharmacies. <br />
	<br />
	<br />
	<strong>High Competition <br />
	</strong><br />
	<br />
	The market share of Nepali companies in the urban set up is approximately 20 per cent and the rest 80 per cent in the rural markets. The reason behind this is credited to high competition among Nepali pharmaceutical companies and limited customers or prescribers, in spite of progressive marketing and promotion of the medicines. It clearly depicts that if the share of Nepali products increases in the city areas, their total share in the pharmaceutical market will experience a significant growth ultimately. However, new industry registrations too signal to follow the same trend which industrialists fear would lead to further competition. Government authorities state that the import of large volumes of drugs from other countries is due to the scarcity of varieties of medicines in the market. On the other hand, Industrialists accuse the government of importing many similar products from India which they say is also one of the reasons behind severe competition. Most of the medicines are ‘me too’ products which has compelled high competition between Nepali companies as well as the imported ones. Most pharmaceutical products are related to a particular disease or a group of diseases (therapeutic segment), and are not spread in diverse therapeutic segments. Apart from that, products like Albendazole, Amoxicillin, Azithromycin, Ciprofloxacin, Fluconazole, Paracetamol, Ibuprofen, Hyoscine, Metronidazole, Ofloxacin, etc are manufactured by around 20 to 30 companies. Similarly, around a dozen of companies produce the cardiovascular and diabetes medicines. “There should have been competition on varieties and quality of the medicines but some Nepali companies are desperately competing because of the similar products,” says freelance market researcher Rajan Raut. Similar products from foreign countries find their stand in the market even tougher as some of the Nepali products have even substituted imported products. <br />
	<br />
	<br />
	<img alt="coverstory" border="1" height="771" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/drugs12.jpg" vspace="5" width="400" /><br />
	<br />
	<br />
	<strong>Monitoring and Inspection <br />
	</strong><br />
	<br />
	The DDA – that has 31 staffs which include 13 drug inspectors of different levels – has been facing a hard time in operating effectively. Such a limited manpower is considered a very low number to maintain the growing number of pharmaceutical industries, wholesalers and retailers. With little human resource to speak of, DDA runs different programs like marketing authorization, inspection, import control, licensing, market control, medicine advertisement and promotion, quality control and clinical trial. Quality inspection of medicines including laboratory reagents, surgical items, bandage, sutures, catheters etc are also some areas the DDA has been found lacking at. National Medicine Laboratory is the only public sector laboratory which monitors quality of the medicines through samples collected by the DDA. However, it doesn’t publicize the results publicly. Lack of good distribution practice and storage practice seems a common problem in many places. This is the reason why consumers often complain about consuming outdated medicines or shortage of essential medicines, blood, oxygen etc. Lack of proper monitoring system of pharmaceutical product is feared to grow ineffectiveness. No medicine company is found reporting its medicinal errors. As per the law, up to Rs 300,000 is to be paid by the manufacturer as compensation if medicine causes harm to the consumer. Baburam Bhattarai, President of Nepal Chemist and Druggist Association urges the need of regulating unregistered medical stores because according to him, they contribute towards creating health hazards. He says, “The government monitoring system has not been so effective. Besides, the current political situation is also fostering such business.” There is no specified division or section in DDA for WHO-GMP inspection either. Although the DDA has insisted that it has not found a single case of counterfeit drug, doctors from different districts bordering India fear its presence in the Nepali market. High prices of medicines have always been a controversial issue. DDA has fixed the actual price for up to 10 medicinal products including saline, painkillers and oral dehydrates. Shyam Adhikari, Drug Inspector at the DDA says they are looking at a mechanism to ascertain the prices of Nepal made medicines as well as the imported ones in the coming days. Recently a ‘Price Monitoring Committee’ has been formed with the participation of members from the DDA, pharmaceutical industry and consumers’ representatives. However, the companies insist that they keep the profit margin scientifically with the approval of the Government of Nepal. Pandey points that the Nepali medicines are priced either at par or a little cheaper than those of their Indian counterparts. Citing the example of a paracitamol tablet, he says, “A single unit of citamol tablet costs Rs 2 in Pakistan and India while it costs only one rupee in Nepal.” Pharmaceutical companies do not produce drugs in a large volume neither do they run with full capacity. Nepali pharmaceutical companies are using 20 to 90 per cent of their respective capacities for production and operate about 8 hours daily which is said to be the major reason behind the high production cost of the medicines. <br />
	<br />
	<br />
	<strong>Investment in Research &amp; Development <br />
	</strong><br />
	<br />
	There are only two or three companies that have been producing biological products. Most of the demand of injectables and biological drugs is fulfilled through imports. Essential medicines which require high technology are donated to Nepal by different international aid agencies from abroad. They also provide vaccines for expanded programs of immunization and medicines for the treatment of tuberculosis, leprosy, HIV/AIDS and sexually transmitted infections (STI), malaria, kala-azar and filariasis etc, for free. Nepali companies are producing around 33 per cent of essential medicines mainly producing therapeutic drugs. Industrialists are apprehensive about invest in research &amp; development (R&amp;D) because of the current political instability and law and order situation, say analysts. Most of the Nepali companies have limitations in terms of technical capability and innovation. On the other hand, foreign companies including multinational ventures have access to latest technologies and are engaged in import of medicines. However, there is no technical collaboration between the multinational ventures and Nepali companies. Industrialists too agree that Nepali pharmaceutical companies should conduct varieties of research and fulfil the demand of high tech medicines in Nepal. They accuse the government for not supporting them adequately as R&amp;D requires high investment, manpower and technology. <br />
	<br />
	<br />
	<strong>The Way Forward <br />
	</strong><br />
	<img alt="" border="1" height="200" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/drugs4.jpg" vspace="5" width="300" /><br />
	<br />
	Many Nepali companies are manufacturing high quality products of international standards and fostering the growth of the Nepali medicine market. Zinc tablet, which is useful for treating ringworm disease in children and popular among international companies, is a product of Deurali Janata Pharmaceutical (DJP). Radha Raman Prasad, Director at DDA, seems satisfied with the quality of Nepali pharmaceutical products. He says, “Few samples have been found lacking quality in the market due to some reasons but I think the overall quality of Nepali medicines is at par with international standards.” Experts involved in the business of medicinal products suggest drug producers to work collectively towards exporting Nepali medicines. Prasad admits that export is not just limited to the quality of the drug. He says that every country has some clauses and Nepal can fulfil those clauses. Some of the Nepali companies are even trying to export drugs to Singapore and Malaysia. “We are very rich in resources for pharmaceutical products, all we need is skilled manpower and the technology. Provided these aspects, we have huge potential for export,” he adds. The much awaited National Drug Policy has been drafted by the DDA. According to Prasad, efforts have been made during the preparation of the draft to address the issues of pharmaceutical industries. He says, “The draft focuses on new areas of thrust, in comparison to the previous policy which focused on export. It has a provision of contract manufacturing for technology input, providing incentive for R&amp;D activities, manufacturing, clinical research and attracting foreign countries for R&amp;D.” From a human resource perspective, students who have studied bio pharmacy abroad have started returning to Nepal. This development promises to enable companies to operate various researches. In August 2011, DDA permitted contract manufacturing of pharmaceutical products to the manufacturing contractors owning WHO-GMP certificate and licenses of the products. The Department of Commerce and Supplies and District Administration Offices are conducting inspections on a regular basis to find out sales of expired drugs and also making their findings public. GMP and GLP (Good Laboratory Practice) standards are meant to pave the way for assuring efficacy and quality of the drugs in the international market and are expected to ease the export of the products. Currently, there are 26 companies that are manufacturing pharmaceutical products by maintaining GMP standards. The rest are also in the process of obtaining GMP as the DDA has urged all non-GMP certified companies to come under GMP certification by the end of the year. <br />
	<br />
	<br />
	<img alt="" border="1" height="457" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/drugs_11.jpg" vspace="5" width="401" /><br />
	<br />
	<strong>COVER STORY <br />
	</strong><br />
	<br />
	<strong>‘The Growth of Nepali Pharmaceutical Industries is Quite Appreciable’ <br />
	</strong><br />
	<img alt="" border="1" height="330" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/BABURAM-BHATTARAI.jpg" vspace="5" width="300" /><br />
	<br />
	<strong>BABURAM BHATTARAI <br />
	President <br />
	Nepal Chemist and Druggist Association <br />
	(NCDA) <br />
	<br />
	</strong><br />
	<br />
	<strong>How do you see the growth of Nepali pharmaceutical industries in recent times? <br />
	</strong><br />
	<br />
	The growth of Nepali pharmaceutical industries in recent time is quite appreciable. Around 42 per cent home demand is fulfilled by them so it can be considered satisfactory. I think the Nepali medicines are doing good business because the products are qualitative and the demand is increasing on a regular basis. I see a golden future for Nepali pharmaceutical products. <br />
	<br />
	As far as my knowledge is concerned, the level of consumption for most of the products made in Nepal is satisfactory and so is their supply system. However, most of the companies are producing the same types of medicine which has created unhealthy competition. <br />
	<br />
	<br />
	<strong>How is the production and export-import business of pharmaceutical products in Nepal? <br />
	</strong><br />
	<br />
	The history of allopathic medicine in Nepal is less than 100 years old. Medicine was used with the start of the modern medical system and during that time, pharmacy products were imported from different countries while such services were limited to only the big cities. The situation has changed now and we have many pharmaceutical companies established in our own country. Imported as well as home grown products are available even in the remote areas of the country today. However, it has not been smooth yet and the mishandling and misuse of drugs is a great threat. <br />
	<br />
	<strong><br />
	Counterfeit drugs is said to be one of the biggest challenges faced by the pharmaceutical industry. What is NCDA doing towards it? <br />
	</strong><br />
	<br />
	I agree with this statement to some extent. Basically, there are two reasons behind the availability of counterfeit drugs. The first one is that we share a open border with India and the second is that there are so many unregistered medical stores all over the country. The government monitoring system has not been effective enough. I don’t think that the NCDA member firms are involved in the supply of such medicines. The government should regulate these unregistered medical stores and bring them under the purview of the legal system. NCDA, on its part, is planning to release the list of registered medical stores and products available at these stores, on its website. It is always ready to support government initiatives to control the availability of counterfeit drugs. <br />
	<br />
	<br />
	<strong>Consumers often complain that the medicine prices vary from pharmacy to pharmacy. It is also said that the margin of profit is kept very high in pharmaceutical products. What do you have to say about such practices? <br />
	</strong><br />
	<br />
	I cannot agree with your statements. NCDA was established with the mission to supply qualitative, effective and safe drugs at affordable prices and we are always conscious regarding the uniformity of medicine prices. However, there may be some misuses from unregistered stores despite all our efforts and commitments. NCDA is committed to endorse the sale of medicines at their justified prices. However, if there are any complaints on account of price manipulation, please do inform to any of our NCDA branches so that we can regulate such pharmacies. <br />
	<br />
	<br />
	As for the margin of profit being high in pharmaceutical products, this is nothing but plain rumor. We are keeping the profit margin scientifically with the approval of the Nepal Government. <br />
	<br />
	<br />
	<strong>A great amount of medicines are sold on a daily basis without the doctors’ prescriptions. How risky is this for public health? <br />
	</strong><br />
	<br />
	This is a serious question that you have brought up. We all are quite aware about the health service standards in our country .We have a very limited numbers of doctors and that too, they are available only in the urban areas. Therefore, scores of villagers do not have access to services provided by doctors. This explains the situation of no prescriptions where there are no doctors. You have to acknowledge the fact that the patients have to get medicines anyway. Nowadays, the paramedics (HA, CMA &amp; ANM) are dispensing medicines in the remote areas. The government is not bothered about this problem and many serious health hazards occur due to the state’s apathy towards health services. <br />
	<br />
	<br />
	<strong>The shortage of general medicines in rural areas often inconveniences many families in Nepal. What’s your take on this? <br />
	</strong><br />
	<br />
	Although our business is a service business, there is a profit motive as well. The few pharmacy assistants and professionals that we have in the country confine themselves to the densely populated areas because they want to do good business. However, there are so many remote areas where there is no storage of general medicines but the problem is that the pharmacy dispensers are not available in such areas. I have also repeatedly drawn the attention of the concerned authorities to run orientation training targeting these areas so that the problem of dispensing medicines can be solved to a large extent. <br />
	<br />
	<br />
	<strong>How wealthy are we in terms of human resources especially in the production, marketing and distribution of pharmaceutical products? <br />
	</strong><br />
	<br />
	As far as the availability of human resources is concerned, let me assure you that many pharmacists and pharmacy assistants are produced every year. The number of pharmacy colleges is also increasing. Most of the pharmacists are employed in industries and academics whereas the pharmacy assistants are engaged in dispensaries. But the tragedy is they are not available in the remote areas. <br />
	<br />
	<br />
	<strong>The Nepali pharmaceutical industries asked the government to stop importing Indian drugs sometime ago. Can it be considered reasonable in a liberal market economy? <br />
	</strong><br />
	<br />
	Nepal is a small country in comparison to our neighbors and the market of any product is limited. It is not bad to promote indigenously produced medicines until our economy is competitive enough to export. Billions of rupees have been invested in the pharmaceutical industries. I think it’s the duty of the government to support these companies by whatever means possible. <br />
	<br />
	<br />
	<strong>What is the possibility for exports of Nepali drugs abroad? What are the challenges in this regard? <br />
	</strong><br />
	<br />
	I don’t see any possibility of Nepali medicines for export in the current context. Even though all the companies of Nepal follow the WHO GMP standard, different countries may have different technical standards. The private sector effort to export medicines may not be an effective one. The government initiation is the primary requisite and a must to realize export efforts. <br />
	<br />
	<br />
	<strong>COVER STORY <br />
	<br />
	<br />
	‘The Overall Quality of Nepali Medicines is at Par with International Standards’ <br />
	</strong><br />
	<br />
	<img alt="" border="1" height="330" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/RADHA-RAMAN-PRASAD.jpg" vspace="5" width="300" /><br />
	<br />
	<strong>RADHA RAMAN PRASAD <br />
	Director General <br />
	&amp; Chief Drug Administrator <br />
	Department of Drug Administration <br />
	</strong><br />
	<br />
	<br />
	<strong>How do you see the growth of Nepali pharmaceutical industry in recent times? <br />
	</strong><br />
	<br />
	New industries are entering into the market but most of them are producing ‘me too’ drugs. The competition is heightening among such kind of drugs. The trend of new industry registration shows that producers are willing to produce similar kind of products that already exist in the market. Such a trend is more common than producing vital drugs and competing with imported products which may help reduce imports and market share of imported drugs. Although new industries have taken industry establishment reference letter for producing large volume drugs, further progress is not seen in the actual establishment of industries. It is very important to produce large volume drugs with quality but little progress has been made towards it. Even though producers are promising to do it, it has not happened till date. <br />
	<br />
	<strong><br />
	New industries are being established every year. Do you see potential in them to make the country self sufficient in drugs and reduce imports? <br />
	</strong><br />
	<br />
	It is not that they do not have the capacity to produce to the extent of self sufficiency but it is limited to specific drugs. The environment for producing numerous drugs to the extent of self sufficiency has already been created but not for all medicines. Nepali companies have a market share of 43 per cent. If vaccines, contraceptives, ARV (Anti Retroviral), large volume drugs and few others are excluded, Nepali companies will have a bigger market share. Some companies have an almost equal market position as Indian companies. Ethical promotions and marketing strategies have helped them create a niche in those sectors. Nepali drug industries have their presence in almost every part of the country. <br />
	<br />
	<br />
	<strong>Around 60 per cent of the drugs market is covered by the foreign companies. How can the share of Nepali industries be increased? <br />
	</strong><br />
	<br />
	The consumers of medicines are mostly the prescriber groups. So, the confidence of the doctors and prescribers needs to be won with ethical marketing and by offering qualitative drugs. This will help to increase the market share. However, only over-the-counter sales and promotion through pharmacies cannot deliver good results compared to ethical promotions. <br />
	<br />
	<br />
	<strong>Although imported drugs are said to be expensive than locally produced ones, why aren’t Nepali medicines preferred by the prescribers? How can Nepali products be promoted? <br />
	</strong><br />
	<br />
	It is necessary to look minutely into actual pricing. Some local drugs may be cheaper but it is difficult to say that products from established brands are actually cheaper. Such products are priced similar to the imported drugs. Quality assurance is the most important factor for promoting Nepali industries. Numerous producers and their associations as well as the DDA have moved towards quality assurance through various measures like complying with the WHO GMP standards. All the stakeholders are moving ahead keeping in mind quality as their central motive. It is a matter of satisfaction that Nepali industries are committed to quality assurance and they too are producing international standard drugs. Even though few samples have been found lacking quality in the market due to some reasons, I think the overall quality of Nepali medicines is at par with international standards. Many industries are now shifting to new locations, upgrading their technologies and carrying out renovation of their production units. Once quality is promised to the consumers, the market share will definitely increase. <br />
	<br />
	<br />
	<strong>It is often said that substandard medicines are being imported and expired medicines sold in pharmacies. What is your take on this situation? <br />
	</strong><br />
	<br />
	At times, it’s not only the drugs imported from India but also the Nepali drugs that are found to be below standard. However, we cannot generalise the situation and say that all products lack quality. There have been cases like discovering some particles on tablets and solidified dry syrup but these are exceptions. We have not found the entire batch of a particular medicine failing in case of one or two samples that are found defective. If the temperature is not adjusted as per the requirement during storage, some medicines change colour naturally over time. A pharmaceutical company produces drugs which is transferred to distributors, then to retailers and finally to the consumers. If the quality is not assured in the supply chain, some complications may arise despite the producer maintaining optimum quality. The producers are slowly getting conscious about it and the DDA too is committed to move towards this direction. <br />
	<br />
	<br />
	Regarding the sales of expired drugs, it is very important to maintain a good pharmacy and dispensing practice. The pharmacy workers must properly look at the prescriptions and scrutinise the medicines before selling them and also give proper information to the buyers. When this system is not practiced, there is a chance of expired drugs getting sold. Substandard and expired drugs must be filtered at the time of sales. At present, there are inspections carried out by the Department of Commerce &amp; Supplies and District Administration Offices to detect sales of expired drugs. Such activities have definitely brought a lot of awareness among consumers and also controlled such incidences. <br />
	<br />
	<br />
	<strong>Counterfeit drugs is also said to be one of the biggest challenges faced by the industry. What is DDA doing towards it? <br />
	</strong><br />
	<br />
	We have not found counterfeit drugs as of now. It’s true that we have found some medicines that are not registered here but they are not counterfeit in the true sense of the term. Such unregistered drugs are confined to around four-five types which have high difference in their prices such as Ciprofloxacin, Omeprazole and some aphrodisiac drugs. We have been carrying out awareness campaigns asking customers to mandatorily take bill on the purchase of drugs which will prevent buying of unauthorised drugs. A conscious citizen must as for bill on purchase of medicines and also seek information about the medicines. <br />
	<br />
	<br />
	<strong>What is the level of competition of Nepali pharmaceutical companies among themselves as well as with the foreign companies? <br />
	</strong><br />
	<br />
	The competition has always been there but it should now focus on quality while competing with ‘me too’ drugs in the market. Earlier, cardiac medicines were not produced within Nepal but now we have them. We also did not have the doctors’ confidence about higher antibiotics but now they prefer Nepali products. These are definitely very good signs. We have been monitoring and conducting inspection of Nepali industries, overseeing their quality and standard etc so we encourage using Nepali drugs with confidence. This confidence has also led Nepali industries beginning to tap the foreign market in recent times. <br />
	<br />
	<br />
	<strong>Raw materials as well as finished drugs are being imported at present. Which one is beneficial for our market situation? <br />
	</strong><br />
	<br />
	The Nepali industries are compelled to import raw materials to produce drugs here because we are not API (Actual Pharmaceutical Ingredients) manufacturers. Therefore, it is necessary to import raw materials. In the current global context too, there is no base to deny import of any products. When the market is dictated by the Nepali industries, the foreign companies that cannot compete will automatically exit. <br />
	<br />
	<br />
	If Nepali companies can produce drugs here, the human resource can be rightly utilised. The availability of human resource is cheaper in Nepal than anywhere else. Qualified human resource is being produced within the country and at the same time, semiqualified human resource is equally available. We have a condition to import quality raw materials at competitive prices. It also creates employment not only in the production line but also in the marketing of products. The industries also pay taxes to the state so from that perspective, local industries must be promoted. <br />
	<br />
	<br />
	<strong>It is said that there is huge potential for export of medicines to India along with other markets. How much have we cashed in on this potential? <br />
	</strong><br />
	<br />
	That potential has not been adequately explored as of now. A few industries that have reached a certain level of success in the local market have started looking towards those markets. All the drug producers must collectively move towards this direction to explore the potential. <br />
	<br />
	<br />
	<strong>COVER STORY <br />
	<br />
	</strong><br />
	<strong>‘We have Gained Trust from the Consumers because of our Quality Products’ <br />
	<br />
	<br />
	<img alt="" border="1" height="214" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/MAHESH-GORKHALI.jpg" vspace="5" width="300" /><br />
	<br />
	MAHESH GORKHALI <br />
	President <br />
	Association of Pharmaceutical <br />
	Producers of Nepal (APPON) <br />
	</strong><br />
	<br />
	<br />
	<strong>How do you see the growth of Nepali pharmaceutical industry in recent times? What is the kind of investment required to establish a pharmaceutical industry at present? <br />
	</strong><br />
	<br />
	As per an estimate, we are growing at around 15 to 20 per cent annually. The cost of establishing a pharmaceutical industry in the country generally depends on the number of segments that the investors target to operate with. Pharmaceutical industries cover different segments like – tablets, capsules, liquids, injectables etc. If an industry tries to cover all these segments, high investment is required. At the same time, low investment can enable an industry to operate with a single segment. As per our calculation, anywhere from Rs 25 to 300 million investment is required for a company producing tablets, capsules and liquids depending upon the choice of the machinery equipments, building, location etc. Establishing an industry in city areas is usually costlier when compared to the terai or hilly region. <br />
	<br />
	<br />
	<strong>How is the production and export-import business of pharmaceutical products doing in Nepal? <br />
	</strong><br />
	<br />
	There are altogether 45 Nepali companies operating in our market. Investors generally produce materials which they can sell even if they have a high production. There is a wide variant of medicines available in the market and we are capable of producing some of these, for example, Paracitamol tablets which are popular as citamol in Nepali households. To meet the remaining demand, we import a good amount of medicines from India, Bangladesh and some other countries. The export potential of Nepali medicines has not been tapped as yet. Nepali pharmaceutical companies occupy around 40-45 per cent market share while the rest is of foreign companies. Our companies can increase their market share only if we could expand our businesses massively. If we do not want to be contended only in the national market, we must grow and focus on exports. <br />
	<br />
	<br />
	<strong>How favorable is the government’s policy regarding the pharmaceutical industry? <br />
	</strong><br />
	<br />
	We don’t find a clear-cut policy of government for the development of Nepali pharmaceutical industries. As such, the pharmaceutical market is rapidly growing internationally and we are obliged to introduce and produce newer medicines or molecules to survive in the market. Since we lack manpower in developing newer molecules, we try to import them as soon as they are developed. Department of Drug Administration (DDA) under the Ministry of Health regulates our companies but it usually hesitates to provide a license whenever we apply to import a new molecule. It says that the molecule is not mentioned in Pharmacopeia - a book where every medicine is featured. Actually, medicines are featured in Pharmacopeia sometime later after the invention. It’s the responsibility of the government to either perish or nourish the pharmaceutical sector as the citizens of this country have the right to have proper medications. By permitting to import newer molecules, providing incentives or soft loans and declaring tax holidays for some years will definitely create good environment for the pharmaceutical sector. The government must also act as a responsible body by addressing problems such as the shortage of powerhouse, in consultation with the stake holders. I think that the Ministry of Health has so many responsibilities and hence, they may not be able to look after the manufacturing industries properly. Nonetheless, I believe they will formulate some good policies in the near future to encourage new investors when they realize our potential as a growing industry. <br />
	<br />
	<br />
	<strong>What are the challenges of the Nepali pharmaceutical industry in meeting the demand of pharmaceutical products in the market? <br />
	</strong><br />
	<br />
	Around 250 companies are involved in importing medicines from other countries so the biggest challenge we have is the faith of the consumers on Nepali products. The pharmaceutical market normally grows with the increase in the prescriptions or the number of the prescribers. We have gained that kind of trust from our consumers because of the quality products we deliver. All the leading doctors and medical experts prescribe Nepal made products which means the main challenge is already taken care of. Another challenge is to introduce newer molecules. <br />
	<br />
	<br />
	We need some lab testing which are often tedious, time consuming and expensive. We need to maintain refresh standard for which we don’t have the facilities but that can be procured. Furthermore, we have to develop our human resources including the marketing professionals so we are conducting different trainings and workshops to improve their capabilities. <br />
	<br />
	<br />
	<strong>What is the benefit of importing pharmaceutical products from India? What kind of competition have domestic factories been facing with hundreds of Indian products and companies in the domestic market? <br />
	</strong><br />
	<br />
	While moving from illness to wellness in the case of human health especially, pharmaceutical products have proved to be one of the essential elements in curing diseases. However, we don’t produce all kinds of medicines. For instance, we don’t produce saline water which is considered as an urgent medication for many diseases. We import it mainly from India as medicines such as this are beneficial to human health. <br />
	<br />
	<br />
	Competition between companies is natural in every business and pharmaceutical industries are no exception. Competition with importing companies is ethical in our business. However, there seems to be a fierce competition between the Nepali companies because of similar medicinal products and limited customers. Everybody wants to promote his own brand and the more number of companies, the more number of brands are there. <br />
	<br />
	<br />
	<strong>Although imported drugs are expensive than locally produced ones, why aren’t Nepali medicines prescribed much? <br />
	</strong><br />
	<br />
	This is untrue as majority of the doctors are prescribing our medicines. This is the reason why we are having 40- 45 per cent market share despite having competition from so many foreign companies. There has been a good promotion of our medicines and the doctors prioritize them whenever they prescribe the medicines to the patients. <br />
	<br />
	<br />
	<strong>How wealthy are we in terms of human resources especially in the production, marketing and distribution of pharmaceutical products? <br />
	</strong><br />
	<br />
	Initially, we had a real problem with human resource be it the marketing or production areas. It was very hard to train young graduates especially those without a science background. Thus the promotion of the products used to be a difficult task in the past. <br />
	<br />
	<br />
	In production also, there were not enough graduates who could earlier meet our criteria. However, there are 17 - 18 colleges now with pharmacy as a major subject. They are producing a good number of bachelors every year that can be utilized in pharmaceutical industries. We don’t have scarcity of such manpower now. <br />
	<br />
	<br />
	However, we don’t have quality manpower who could import newer molecules from foreign countries. Good companies have been providing trainings for their employees and sending them to different countries like Japan, Bangladesh and India for their capacity enhancement. They are improving and we hope that we will produce the required manpower for this sector as well. <br />
	<br />
	<br />
	<strong>It is said that the margin of profit is kept very high in pharmaceutical products. What do you have to say about that? <br />
	</strong><br />
	<br />
	Even though it seems so, it is not true. Actually, certain products have really high margins mainly because of the high expenses involved in their production. To produce a single medicine, we import different raw materials including chemicals and packaging materials. Besides, producing quality medicine is a very lengthy and time consuming process. There are other costs involved too which make medicines more expensive, for example, the marketing aspect. Whatever is the margin, the fact is that the product must be sold because without the sale of a product, there can be no profit. <br />
	<br />
	<br />
	<strong>It is said that there is a huge potential for export of medicines to India along with other markets. How much have we cashed in on this potential? <br />
	</strong><br />
	<br />
	Let me give you an example when my company used to export medicines in India a few years ago. We had applied to the Indian authorities for exporting medicines to which they agreed and we started to send our medicines. However, despite having all the certification and documents of our products, they would put our stock in their quarantine office once it reached Raxaul in India. They would say that approval can be provided only after some lab testing but by the time they did so, it would be already six months late. Another three months would be spent for lab testing so it’s only after nine months that we would be able to get the approval to supply our medicines in the Indian market. The same process would apply for each consignment. After all this, the Indian retailers would not agree to keep medicines having less than six months of validity. It continued for two years and we had a business of Rs 50-60 million only. After two years, we could not undergo the criteria once they applied a new system for Nepali companies. It became costlier and that is when we stopped exporting our products. However, we are again targeting India for the expansion of our products and hopefully, we will be successful in our endeavour. <br />
	<br />
	<br />
	<strong>Raw materials as well as finished products are being imported at present. Is it beneficial for our market? <br />
	</strong><br />
	<br />
	Yes, it is. We cannot produce medicines without raw materials and finished products since we don’t have the big plants to produce chemical and other essential materials. We don’t need to produce raw materials ourselves because of the limited market we have. Unless we expand our market, we can continue to import these items. <br />
	<br />
	<br />
	<strong>COVER STORY <br />
	</strong><br />
	<br />
	<strong>‘Maintaining GMP and GLP Standards will give Credibility to our Products Internationally’ <br />
	<br />
	<br />
	<img alt="" border="1" height="204" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/MOHAN-PRASAD-AMATYA.jpg" vspace="5" width="300" /><br />
	<br />
	MOHAN PRASAD AMATYA <br />
	Chief <br />
	National Medicine Laboratory <br />
	<br />
	<br />
	</strong><br />
	<strong>What is the major function of the National Medicine Laboratory? <br />
	</strong><br />
	<br />
	Our main objective is to ensure that safe and effective medicines are available in the Nepali drug market. Though it is the Department of Drug Administration (DDA) that awards license to pharmaceutical factories, it is our responsibility to test and evaluate the standard of their laboratories and drugs and refer them for the registration. Factories should obtain market license for each of their products. We develop Reference Standard and make it available to the pharmaceutical companies and laboratories. We also inspect retail and wholesale pharmacies to check the quality of drugs. The price monitoring of the marketed drugs is within our scope of work and we deploy drug inspectors for this task. They visit the market on a regular basis, purchase drugs from the pharmacies and bring it to us. We inspect quality, composition, packaging and every other detail of these drugs. If such drugs are found below the standard, we report it to the DDA which recalls these products from the market. Similarly, we visit laboratories and inspect products of foreign countries before importing them to Nepal. <br />
	<br />
	<br />
	<strong>Pharmaceutical companies also have their own laboratories. How good are they? <br />
	</strong><br />
	<br />
	A pharmaceutical company must set up its own laboratory. We visit their laboratories and conduct a thorough inspection. Aspects like hygiene of the lab and precautions taken for the safety of its manpower, availability of equipments and trained manpower, location of the lab and its space, structure of the building, availability of water and other resources are taken into account while giving approval to the laboratories for production. We visit them regularly even after the approval Therefore, we must say that existing labs have been maintaining the required standard. Of course, there is a lot of scope for improvement and it’s a continuous process. All in all, they are good. <br />
	<br />
	<br />
	<strong>Out of 49 pharmaceutical factories operating in Nepal, only 26 have been producing pharmaceutical products under the World Health Organisation’s (WHO) Good Manufacturing Practice (GMP). Why is this number so low? <br />
	</strong><br />
	<br />
	It’s been about 8 years that Nepal became a member of the WTO. However, our pharmaceutical companies were established long before we got associated with the WTO. At that time, our aim was to encourage people to invest in the pharmaceutical sector so that the country can gradually substitute imported medicines. The procedure to obtain operating licenses was not that strict. Now that the country has entered an agreement with the WHO to maintain its GMP standard, we could not ask them to upgrade their laboratories and manufacturing units overnight. It requires huge capital for a company to be at par with the international GMP standard. The DDA has been asking the existing factories to upgrade themselves time and again by allowing a certain time-frame to them. In fact, the DDA has directed all existing pharmaceutical companies to upgrade themselves by the end of this year. Because of this provision, many companies have applied for GMP and few of them have already received the certification. However, there are still some companies that have not applied for this process. I believe the DDA will take adequate measures against such factories in the future. <br />
	<br />
	<br />
	<strong>Have all the pharmaceutical companies been maintaining Good Laboratory Practices (GLP)? <br />
	</strong><br />
	<br />
	It is very essential to maintain GLP to establish a pharmaceutical industry. Companies that do not maintain GLP are not allowed to begin production. Before any pharmaceutical product is produced, we check whether the laboratory has used standard raw material and put the lab in the suitable location and purchased good quality machines or not. When the product is made, we analyse its composition, packaging, punching, amount of active drug in the medicine and its storage. These aspects fall under GLP and we make sure that factories are up to the mark on each of these aspects before granting it permission to operate. To make our existing factories concerned about GLP, we conduct trainings on this aspect regularly. <br />
	<br />
	<br />
	<strong>What special benefits will we have by producing pharmaceutical products in line with the WHO’s GMP and GLP guidelines? <br />
	</strong><br />
	<br />
	Maintaining GMP and GLP standards will give credibility to our drugs in the international market. It will eventually pave way for the export of our products. Though there are only 26 pharmaceutical manufacturing companies that have been producing products maintaining GMP standard, about five companies are in the process to get the certification. We will be visiting their manufacturing plants and the laboratories to refer for the certification. <br />
	<br />
	<br />
	<strong>So, we do have an opportunity to export our products. <br />
	</strong><br />
	<br />
	Export is not just limited to quality of the drug. Every country has a specific policy about importing drugs from another country. If our country can fulfil those clauses, we won’t have problem in exporting our products. Even India that has been exporting its products to almost all corners of the world, is willing to import drugs from us. But it has set some clauses regarding drugs import. If we can fulfil these clauses, India can be a potential market for our medicines. Therefore, export is more related to the policy of a specific country. Some of our companies are trying to export drugs to Singapore and Malaysia as well. We are very rich in resources for pharmaceutical products. All we need is skilled manpower and the technology. Provided these aspects, we have huge potential for export. <br />
	<br />
	<br />
	<strong>What sort of drugs are we strong in and where do we still need to do research? <br />
	</strong><br />
	<br />
	The domestic production has been able to fulfil 60 per cent of the current demand. For the remaining 40 per cent, we have to be dependent on imports. We are strong in therapeutic drugs but we still have to be dependent on imports for injectable drugs and biological products. It takes a huge capital and expert manpower to produce such drugs. The labs need to be sterilised and made aseptic to produce these medicines. Even the building has to be designed in a specialised way for such drugs. There are only two or three companies that have been producing biological products. Most of the demand for injectable and biological drugs is fulfilled through imports. <br />
	<br />
	<br />
	<strong>What is the status of human resource in the pharmaceutical sector? <br />
	</strong><br />
	<br />
	In the last few years, pharmaceutical sector has been witnessing a growth in the quantity of trained manpower. The existing four universities of our country have been producing manpower for this sector. Kathmandu University (KU) has been operating classes of pharmacy at the Bachelor, Masters and the Doctorate levels. Tribhuvan University (TU) also runs a bachelor level programme while Purbanchal Univeristy (PU) has given affiliation to about 19 colleges to operate pharmacy classes. Similarly, Pokhara University also has a Bachelor of Pharmacy programme. So, around 500 students graduate in this sector annually. <br />
	<br />
	<br />
	<strong>Where do these graduates get job placement? <br />
	</strong><br />
	<br />
	A large number of students with Bachelor degree in pharmacy open their own pharmacies while some others work in pharmaceutical factories, laboratories and hospitals. A few of them pursue a teaching career but most graduates from the Institute of Medicine (IOM) and Kathmandu University go abroad in search of greener pastures. The flow of application for establishing pharmaceutical factories was high a few years back but the present political situation has been a hindrance in establishing new factories. Therefore, the graduates find the overseas market better for greater exposure. If the country could emerge from the present political turmoil, they too can find employment opportunities in their own country. <br />
	<br />
	<br />
	 </p>',
			'published' => true,
			'created' => '2012-08-15',
			'modified' => '2012-10-10',
			'keywords' => '',
			'description' => 'Nepal’s pharmaceutical expense is at par with other South Asian countries, thanks to the increase in the number of pharmaceutical companies and their production. In 2008, the total per capita pharmaceutical expenses was US$ 6.96 while the total amount of pharmaceutical expenses stood at Rs 13.09 billion in Nepal',
			'sortorder' => '558',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 12 => array(
		'Article' => array(
			'id' => '650',
			'article_category_id' => '40',
			'title' => 'Open Skies Of Nepal',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	<strong>By Pinaki Roy <br />
	<br />
	</strong><br />
	<img alt="coverstory july" border="1" height="217" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/coverstory(1).jpg" vspace="5" width="400" /><br />
	<br />
	<br />
	The flow of international passengers in the first quarter of 2012 has been impressive enough to raise optimism among the concerned stakeholders. The statistics between January and March 2012 is an indication that international air service and passenger movement to and from Nepal is set to register a significant increase this year compared to 2011. A total of 717,182 international passengers (see table) availed air services via Tribhuvan International Airport (TIA) – the only international airport of Nepal – in the first three months of 2012, says Raj Bahadur Maharjan, Director at TIA’s Flight Approval Department. <br />
	<br />
	<br />
	There has been an increase of 84,459 passengers when compared to the first quarter of 2011, thereby registering a growth of 13.35 per cent over the same period of the previous year. Monetarily speaking, the total annual international flight service business in Nepal is worth an estiamted Rs 80 billion. <br />
	<br />
	<br />
	Ratish Chandra Lal Suman, General Manager at TIA, says, “The number of passengers has increased in the first quarter of this year also because of new airlines coming into operation and providing added air services.” He attributes the increment both to the increase in inbound tourists and the outbound migrant workers to different countries. Even though GMG Airlines towards the end of 2011 and Kingfisher Airlines in February 2012 ceased to operate in Nepal, their absence was promptly compensated by Indigo (October 2011) and RAK Airways (February 2012). <br />
	<br />
	<br />
	The number of flights that served these passengers was 5,693 (up by 9.69 per cent from 5,190 flights during the same period last year). While 2,846 flights made outbound journeys, the number of flights that landed at the TIA stood at 2,847. A total of 368,934 passengers flew out of Nepal while another 348,248 landed in the country from January to March this year, a growth of 11.48 per cent and 15.40 per cent respectively when compared to the same period of 2011. In the first quarter of the previous year, 330,954 passengers took outbound flights while another 301,769 passengers entered Nepal via inbound flights making a total of 632,723 passengers who availed international air services from January to March 2011. <br />
	<br />
	<br />
	This growth is certainly encouraging coming at a time when the International Air Transport Association (IATA) left this year’s global airline profit forecast unchanged at $3 billion, or 0.5 per cent of industry revenues. At a summit of airline chiefs being held this year in Beijing, this stable outlook masks a widening gap between regions with “only North and South America set to improve and the rest of the world seeing reduced profitability.” <br />
	<br />
	<br />
	<strong>The Year Gone By <br />
	</strong><br />
	<br />
	International air passengers flying via the Nepali sky crossed 2.7 million for the first time in 2011. These passengers travelled via Nepal with 28 international airlines operating in Nepal last year, according to Maharjan. He said that additional airlines such as IndiGo, added frequency of flights and passenger occupancy increased the number of air passengers using the Nepali route. The year 2011 saw 2.7 million international passengers flying out and landing in the country on board 22,791 flights. A total of 28 airlines flew 2,700,027 passengers (see table) for the year, says Maharjan. This was an increase of 10.81 per cent in comparison to 2010 when 2,436,558 passengers availed international air services in Nepal. <br />
	<br />
	<br />
	While 1,407,512 passengers flew out of the country, the passengers entering the country numbered 1,292,515. A total of 11,393 flights departed while 11,398 flights entered Nepal during the period making a total of 22,791 flights for the year. The only new airline that started operations in 2011 was Indigo. Qatar Airways carried the most number of passengers – 277,796 on 2,374 flights while Jet Airways was second with 272,560 passengers on 2,191 flights. Nepal Airlines Corporation was third with 202,041 passengers on 1,619 flights. <br />
	<br />
	<strong><br />
	Migrant Worker: The Main Market </strong><br />
	<br />
	<br />
	With more Nepalis departing for jobs abroad and increase in tourist movement, international airlines operating in Nepal have witnessed this rise in passenger movement in recent times. The airline companies claim that they are equally focusing on all the segments, which include business travellers, tourist, VFR (visiting-friends and relatives) and workers. However, it’s no secret that migrant workers comprise around 80 percent of the total passengers availing international air services in Nepal. Most of the international airlines flying to and from Nepal are more focused on manpower markets rather than the tourism markets. Of the total international flights, the airliners carry only 20 per cent tourists, observe industry analysts. <br />
	<br />
	<br />
	<strong>Contribution to Tourism </strong><br />
	<br />
	<br />
	International carriers from India accounted for the largest share of inbound tourism in Nepal in the previous year. According to TIA, Indian carriers flew around 48 per cent of all tourists visiting Nepal in 2011 – dubbed as Nepal Tourism Year (NTY). Indian travellers alone grew by 39 percent to 145,338 in 2011, a 26.67 percent share in total tourist arrivals to Nepal. As per TIA statistics, five Indian airlines—Spice Jet, Jet Airways, Air India, Jet Lite and Kingfisher—figured among the top 10 carriers bringing tourists to Nepal. The total tourist arrivals via air numbered 544,985 in 2011 that entered Nepal on board 28 international airlines. <br />
	<br />
	<br />
	Indian budget airline Spice Jet – that started flying to Nepal in October 2010 – was the largest carrier of tourists into Nepal in 2011, accounting for 15.28 percent of the arrivals. Jet Airways and Air India were the second and third largest tourist carriers respectively accounting for 12 percent and 8 percent tourist arrivals. Two legacy carriers—Thai Airways and Qatar Airways—fell in the inbound tourism rankings in 2011. While Thai’s market share shrunk to 8 percent from 11 percent in the previous year, the share of Qatar Airways slipped to 7 percent. Etihad Airways and Gulf Air, two more carriers from the Middle East, lost their slots in the top 10 list in 2011. <br />
	<br />
	<br />
	The healthy growth of Indian tourists to Nepal attracted yet another Indian private airliner Indigo Airlines that started New Delhi-Kathmandu flights in October last year making it the sixth Indian private airliner flying between Nepal and India. Currently, Air India, Jet Airways, Jet Lite, Spice Jet and Indigo fly around 130 flights a week between Kathmandu and various Indian destinations while Kingfisher Airlines has stopped flying to Nepal for the last few months. Needless to say, the increase in the number of Indian airliners flying to Kathmandu has encouraged the aviation sector in Nepal immensely and boosted the country’s tourism prospects. A total of 207,961 tourists entered Nepal via air in the first four months of 2012, a growth of 23.1 per cent over the same period last year. A total of 168,958 tourists had entered Nepal from January to April in 2011. <br />
	<br />
	<br />
	<strong>Direct Flights <br />
	</strong><br />
	<br />
	Broadly, any business or industry can be categorised either as monopoly or market-oriented. Due to the inherent nature of international air transport industry, every country enjoys certain exclusive rights, which indirectly helps them monopolise some air routes. This right, if exercised, could be of tremendous benefit to a country like Nepal. “Direct flights between Nepal and other countries can play a key role in bringing increased number of tourists into our country,” an industry insider opines. <br />
	<br />
	<br />
	For instance, none of the 27 airlines flying into Nepal have the right to operate direct long distance flights between Nepal and lucrative destinations like Europe, Japan and Australia. They can operate only connecting flights whereas Nepal gets the sole privilege of operating direct international flights from the country. As foreign travellers have no choice of direct air connectivity, air travel costs become higher while coming to Nepal. Mihin Lanka, a Sri Lanka-based airline has expressed its interest to operate direct flights between Colombo and Kathmandu. This was conveyed to Prime Minister Baburam Bhattarai by Lankan President Mahinda Rajapaksa on the sidelines of the recently concluded environmental summit in Rio de Janeiro, Brazil. Air Service Agreement (ASA) between Nepal and Sri Lanka allows Sri Lanka-based airlines to operate up to 14 flights a week in the Colombo-Kathmandu-Colombo sector. <br />
	<br />
	<br />
	<strong>State of the National Carrier </strong><br />
	<br />
	<br />
	The status of the national carrier – Nepal Airlines Corporation (NAC) – in terms of international flight operations is disappointing to say the least. Around 95 percent of the international aviation market in Nepal is in the hands of foreign air operators. “Our market share is worth less than Rs 4 billion out of the international flight service business of Rs 80 billion annually,” says NAC Spokesperson Saroj Kasaju. The market share of NAC shrank to an all-time low in 2011 in terms of tourist carriage. The national flag carrier held the 10th position with a mere 3.05 percent while it had a market share of 4.87 percent in 2010. The eroding market share of NAC, according to travel trade entrepreneurs, is due to its inability to expand its fleet while the fact remains that the prerequisite for business expansion in airline industry is acquisition of aircraft, especially for operation in the lucrative international sector. In 2001, NAC was a leading carrier accounting for 28 percent of inbound tourists. <br />
	<br />
	<br />
	With more international airlines entering the Nepali skies and NAC’s track record of flight delays, travel agencies say the national flag carrier has become the last choice among visitors. Currently, NAC operates its international flights with two ageing Boeing 757s, either one of which is usually offline due to technical glitches and periodic C-checks. The carrier now flies to only five international sectors – Dubai, Doha, Bangkok, Kuala Lumpur and Hong Kong – down from 21 destinations in 12 countries with four Boeings till 1993. The airline now plans to start flights to Damam in Saudi Arabia. It also plans to start flying to Kuala Lumpur seven-days-aweek besides launching direct flights to Doha, Qatar. <br />
	<br />
	<br />
	The corporation currently spends Rs 1.39 billion on repairs alone for the two planes – Boeing 757-9N ACA Karnali and ACB Gandaki – which it has in its ‘fleet’ right now, says Kasaju. “Out of the estimated income of Rs 4.52 billion from international flights in the current fiscal year, 23 per cent of the total amount has gone into the repairs of the two Boeings,” he adds. The cost of repairs has gone up considerably in the last five years due to the fast ageing of the two Boeings. This expense is several times more than what the private carriers spend on repairs and maintenance which is six to 10 per cent of their earnings from flights. <br />
	<br />
	<br />
	A strong and competitive national flag carrier can serve as a key vehicle of the country’s economic and tourism development. Kasaju says, “NAC has become a factory without machines due to lack of aircraft but hasn’t gone in loss yet.” He cautions though that the corporation can land in major financial trouble if aircraft is still not added to its fleet. <br />
	<br />
	<br />
	However, all is not lost as Kasaju reiterates that the corporation is still making profit thanks mainly to its ground handling business. The corporation provides such service to 23 foreign airlines that fly to Nepal. From a domestic perspective, the corporation is expected to get five units of 19-seater aircraft and three units of 56-seater aircraft from China on grants and concessional loan. The airline management is scared of an imminent demise of the company as its current basis of survival – ground handling business – is in jeopardy due to a move by the Civil Aviation Authority of Nepal (CAAN) to possibly involve the private sector and allow competition. <br />
	<br />
	<strong><br />
	Ground Handling Services at TIA </strong><br />
	<br />
	<br />
	CAAN is currently holding discussions with other government agencies and stakeholders to allow the private sector to operate ground handling services at the TIA. It informed that it may soon allow private firms to operate ground handling services during the night time. Currently, NAC that provides ground handling services to almost all international airlines currently earns Rs 2 billion a year of which 10 percent is paid to CAAN as royalty. CAAN says that many international airlines and customers have complained about NAC’s ground support service. The complaints are mainly two: thefts and tampering with passengers’ luggage and higher ground handling charges of NAC in comparison with other international airports in the region. It is hopeful that the introduction of a private firm will enhance quality and manage congestion at TIA. “The Civil Aviation Authority Act 1996 and National Civil Aviation Policy 2063 state that the ground handling service should be competitive. Besides, the agreement with the corporation also does not restrict CAAN from appointing a private firm to manage ground handling services,” says Suman. He adds, “Due to NAC’s monopoly, the ground handling charges in our country are the most expensive in this region.” <br />
	<br />
	<br />
	The addition of one more ground handling service provider is expected to bring in competition and end the monopoly thereby resulting in quality service at lower service charge, adds Suman. TIA currently has the capacity to serve 8.2 million passengers a year and can serve up to 1,350 international passengers on an hourly basis. “We have not been able to serve to our total potential due to organisational inefficiencies. The number of flights out of TIA is less than half the capacity that we can accommodate,” Suman says. Meanwhile, NAC officials deny the charges and claim that the incidents of baggage theft and breakdown are minimized to internationally acceptable level. They also allege that some of these complaints are actually due to the fault of CAAN and other government agencies involved in the business such as the immigration department. According to them, some problems are due to lack of adequate infrastructure such as insufficient apron space for parking the craft which are forced to wait in the taxiway for long periods. Besides, inadequate number of boarding gates cause delays in boarding and confuse passengers on the correct conveyer belts to deliver the luggage are frequently out of order while the luggage weighing machines are not repaired on time. Insufficient number of toilets and chairs in the passenger waiting area add to passenger woes further. <br />
	<br />
	<br />
	The NAC management says that it’s not only the ground handling services that are expensive in Kathmandu. It gives examples of the fuel price and the charges that CAAN levies on account of aircraft landing, parking and navigation. The charges for CUTE used for passenger check-in too are high in Nepal than elsewhere, argue NAC executives. They point that the ground handling services in many other countries such as Thailand, UAE, Qatar, Malaysia and Hong Kong are provided by their national flag carriers either on their own or through subsidiaries. In Thailand, even the flight catering service is provided by the party that is recommended by Thai Airways, they say. <br />
	<br />
	<strong><br />
	Trans-Himalaya 2 Airspace <br />
	</strong><br />
	<br />
	Considering the increased air traffic at the TIA, CAAN is planning to operate the international airport 24 hours a day. This is expected to help in managing the increasing air traffic. Besides, it is also seeking an alternative location nearby Kathmandu for shifting the domestic airport from TIA to address the congestion. Likewise, it is also going to extend the domestic terminal building and make a separate car parking area for arriving passengers. <br />
	<br />
	<br />
	Nepal plans to ask India for the development of Trans-Himalaya 2 airspace (Hong Kong-Kunming- Guwahati-Kathmandu) connecting Southeast Asia, the Middle East and Europe in view of the increasing air traffic demand in Nepal. The route is one of the most lucrative routes for Nepal and if opened, it will be the shortest way from China and the Far East to the Middle East and Europe. The air distance from Kathmandu to Hong Kong will also be reduced. Implementation of this airspace will allow international airlines to fly over Nepali airspace, which means savings in fuel and distance for carriers flying this route and revenue for Nepal. “The airspace was discussed during Prime Minister Baburam Bhattarai’s visit to Delhi,” says Suresh Acharya, Joint Secretary at the Ministry of Culture, Tourism and Civil Aviation (MoTCA). According to him, India is positive about opening the proposed route. He adds that separate discussions need to be held with the Chinese government with regard to permission from the Chinese side for the opening of Trans-Himalaya 2 airspace. The opening of this proposed air route will have hundreds of international airlines use Nepali airspace and help the country to develop as a hub. CAAN officials add that the proposed route would be the shortest and could establish Nepal as an international transit point and result in enhanced air revenue for the country. The second international airport that the government has planned to construct in Nijgadh of Bara would be the greatest beneficiary in the event this air route comes into operation. Similarly, for aircraft entering Nepal’s air space, CAAN proposes Biratnagar (in the eastern region), Bhairahawa (in the western region) and Nepalgunj (in the mid-western region) as the three crossborder airspaces. Currently, Nepal has three incoming air routes—Simara, Kakkarbhitta from Paro in Bhutan and the Nonim air route from China. The Kathmandu-Mahendranagar-Delhi (L626) is the outgoing air route for international flights. Nepal is seeking new airspaces to ease traffic congestion, enhance information transmission, traffic regulations, emergency recovery of aircraft during accidents and automatic message switching system in its aviation sector. <br />
	<br />
	<br />
	The proposed route is more direct, safer, economical and efficient for flights between Europe, the Middle East and East Asia. These routes will reduce the congestion of westbound traffic flows across the Bay of Bengal. Experts claim that access to this international air space would give Nepal a huge opportunity to develop as a hub like India, the Maldives, Pakistan and Sri Lanka in South Asia. Maximum coverage of Nepal’s air space on long distance international flights via this proposed route could bring great benefits to the country if brought into operation <br />
	<br />
	<strong><br />
	The Way Forward </strong><br />
	<br />
	<br />
	As per the estimates of the International Civil Aviation Organisation (ICAO), an investment of US$ 100 in the air transport industry produces benefits worth US$ 325 for the economy, and 100 additional jobs in the air transport sector results in 610 new jobs across the wider economy. It further suggests that the air transport component of civil aviation accounts for more than 4.5 percent of the global GDP. As for the numbers, three carriers – AirAsia X, Malaysia Airlines and BB Airways – start operations in 2012. AirAsia X has already started operations while Malaysia Airlines and BB Airways are planning to operate international flights from September this year. It’s courtesy the competition among airlines on Kathmandu-Kuala Lumpur route as these three carriers unveiled plans to operate on the sector. The growing movement of Nepali migrant workers to and from Malaysia is one of the reasons luring airlines to fly on this sector. Statistics released by the Department of Foreign Employment shows that an average of 350 Nepali workers left for the Malaysian capital on a daily basis in the last fiscal year. While Malaysia Airlines is the national carrier of Malaysia, AirAsia X is a Malaysia-based budget carrier. ASA between Nepal and Malaysia allows Malaysian carriers to operate up to 21 flights a week. On the other hand, BB Airways is an upcoming local carrier promoted by TBI Group of Non Resident Nepalis (NRNs) in Japan which has already unveiled plans to operate scheduled flights on seven international routes including Kuala Lumpur. <br />
	<br />
	<br />
	There is an unlimited potentiality of the development of tourism and civil aviation sectors in the country. A well-equipped fullfledged international airport – where long-haul flights from Europe and America could directly land and take off – is needed for the development of the aviation and tourism sectors. In this context, a proposed fullfledged airport at Nijgadh can be an international hub for air transit and contribute substantially to the overall economy of Nepal. Nepal Investment Board (NIB) has already taken the initiative on projects related to the upgradation of TIA, and construction of a new airport in Nijgadh. It is estimated that the TIA upgrade will cost Rs 52.80 billion while the construction of the new airport in Nijgadh will cost Rs 45 billion. <br />
	<br />
	<br />
	<br />
	<br />
	<br />
	<strong>‘Gulf Air Provides Excellent Connectivity to a Large Number of Nepali Workers’ <br />
	<br />
	<br />
	<br />
	<img alt="" src="http://www.abhiyan.com.np/images/uploaded/renji-kurian-th_1343383001.jpg" /><br />
	<br />
	RENJI KURIAN THOMAS </strong> <strong><br />
	Country Manager <br />
	Gulf Air <br />
	<br />
	</strong> <br />
	<br />
	<strong>Can you share the rate of increase in passengers flying to and from Nepal over the years? <br />
	</strong> <br />
	There has been a steady growth of passengers over the years. As one of the major international airlines operating in Kathmandu, we have seen nearly a 20 per cent increase in the number of passengers in the first quarter of the year 2012. The latest report of Tribhuvan International Airport (TIA) also has our airlines figuring among the top four international airlines that have seen the strongest growth in passengers’ movement. Having started our operation in July 1998, we are now operating 12 flights between Bahrain and Kathmandu weekly. <br />
	<br />
	<br />
	<strong>How do you assess the quality of air service infrastructure in Nepal? <br />
	</strong> <br />
	The quality of air service is very good as the airport takes care of landings and take-offs for as many as 27 international airlines. However, there is always a scope for improvement with the increase in tourism traffic in Nepal. The airport has been working to improve its facilities further as such. <br />
	<br />
	<br />
	<strong>How has been the demand on the number of flights over the years? How are you managing the supply to meet the demand? <br />
	</strong> <br />
	The demand on this route is increasing steadily. By increasing our frequencies as well as operating large aircrafts periodically, we manage to accommodate more passengers. Gulf Air provides excellent connectivity to a large number of Nepali workers in the gulf region, particularly Saudi Arabia. We operate larger aircrafts as per the situation, especially when the demand is high. <br />
	<br />
	<br />
	<strong>What are your unique selling propositions? How aggressively are you marketing them? <br />
	</strong> <br />
	We have got the biggest network in the gulf region and several USPs to our credit. One of them is our schedule with excellent connectivity, for example, our split schedule of flights between Bahrain and Kathmandu offers very good travel options as it allows travelers to choose their own flight timings. In addition, Gulf Air’s seamless connectivity to Europe and the Far East via the Bahrain hub is an ideal choice for European customers travelling to Nepal or the Far East. Moreover, we are currently operating one of the youngest fleet with an average age of 5.2 years. This A320 fleet which operates between Bahrain and Kathmandu, offers ergonomically designed seats for travelers with maximum comfort, full flatbed seats on Falcon Gold class and the latest in-flight entertainment. <br />
	<br />
	Internationally, we are the first airline in the world to offer ‘Sky Hub’ that offers hi-speed broadband internet, mobile phone connectivity, live TV telecast, popular entertainment programs, sports channels and an array of movies, music and games. In addition to that, Gulf Air’s unique Sky Nanny and Sky Chef Services have received positive feedback from the customers. These services have helped us win the best ‘family friendly airline’ from US-based publications and the ‘best cabin crew’ award ranking from an IATA survey. <br />
	<br />
	<br />
	<strong>Airlines flying to Nepal are said to have very few business class seats. Is it true that airlines do not see prospects for business class market here? <br />
	</strong> <br />
	The aircrafts that we fly to Kathmandu are the same as the ones that fly on our other routes. We use a combination of narrow and wide body aircraft for flights to Kathmandu, depending on the traffic. We agree that the potentiality of business class market is not high in Nepal when compared to other regions. However, we offer 16 Falcon Gold Business class seats on our A320 fleet which has a configuration of 136 seats in total. The gold business class has full flat seats and several modern features for those who prefer stylish and luxurious travel. <br />
	<br />
	<br />
	<strong> What are your expansion plans? <br />
	</strong> <br />
	We do continuously look at the number of the passengers and market demands and decide accordingly. As said earlier, we have increased our frequencies and are also periodically operating larger aircraft to meet the seasonal and expanding market. <br />
	<br />
	<br />
	<strong>Most of the flights made to Nepal are targeting migrant workers. How sustainable is this policy? <br />
	</strong> <br />
	As mentioned in the TIA report, increased labor traffic accounts for around 80 percent of seat demand in all international airlines. All international carriers connecting to Nepal saw a robust increase due to this reason. We cater both to migrant workers and tourists. However, the majority of our traffic to Kathmandu is the migrant workforce working in the gulf countries. We foresee this trend to continue for some time to come. <br />
	<br />
	<br />
	<strong>What are your operational difficulties and facilities in Nepal? <br />
	</strong> <br />
	There are no operational difficulties except the weather of course. As you know, we are sometimes forced to divert our flights to nearby Indian airports due to unfavorable weather conditions such as dense, fog etc especially during winter. However, with our split schedule flights, we have better timings for landing in Kathmandu. <br />
	<br />
	<br />
	<strong>How are you managing your ground handling staff and crew members? <br />
	</strong> <br />
	We have Nepali speaking cabin crew in our team, who are deployed on the Kathmandu route most of the time so that our Nepali customers could feel at home. Almost all our staffs at the airport and city office are Nepalis. <br />
	<br />
	<br />
	<strong>How do you see the prospects of Nepal’s tourism sector? How is your airline contributing to it? <br />
	</strong> <br />
	Tourism is one of the main industries in Nepal. The Nepal Tourism Year 2011 was quite successful. Through International air passenger movement, Nepal grew 13.35 percent in the first three months of 2012 with high migrant workers and tourist traffic. Kathmandu is one of the major tourist destinations with thousands of foreigners visiting the country for a variety of reasons. <br />
	<br />
	The tourism sector is bound to expand as more and more people opt for unique and affordable destinations such as Nepal. We are able to connect more passengers than others to travel to Kathmandu via our Bahrain hub. The tourism campaigns or promotions by Nepali tourism authorities in the gulf countries can further help an increment in the tourist traffic to Nepal. I am proud to say that Gulf Air too has a role to play in the tourism development of Nepal as we cater to a large number of European tourists who find it convenient to fly with us. <br />
	<br />
	<br />
	<br />
	<strong>‘An International Airport at Nijgadh can help Establish Nepal as a Transit Hub’ <br />
	<br />
	<br />
	<br />
	<img alt="" src="http://www.abhiyan.com.np/images/uploaded/tri-ratna-manan_1343383130.jpg" /><br />
	<br />
	TRI RATNA MANANDHAR </strong> <strong><br />
	Director General <br />
	Civil Aviation Authority of Nepal (CAAN) <br />
	</strong> <br />
	<br />
	<strong><br />
	What is the current scenario of International flights operating in Nepal? </strong><br />
	<br />
	Earlier, we had altogether 28 operators conducting international flights. Among them, three operators namely GMG Airlines, Kingfisher Airlines and Bahrain Air postponed their flights. Simultaneously, three other operators namely BB Airways – a Nepali airliner – along with two airliners from Malaysia, Air Asia X and Malaysian national carrier Malaysia Airlines were included. Air Asia X is operating from July 3 while BB Airlines is to commence from September this year. That is to say, some airlines are withdrawing their flights while some others are commencing their operations soon. However, the numbers of operators are back to 28 as it was before. There are 33 other airlines waiting in the wings with their air service agreements (ASAs). <br />
	<br />
	<br />
	<strong>The infrastructure bottleneck is often the constraint to provide international standards services to the airlines flying to Kathmandu. What exactly is the situation? <br />
	</strong> <br />
	We must accept this fact. We are not being able to develop the infrastructure as per the growth of air traffic movements. That is why we are very often facing air traffic congestion at TIA. To address such problems, we are conducting various measures. First of all, a TIA Capacity Enhancement Project is going on with support from an ADB loan of US$ 70 million. CAAN itself is investing another US$ 30 million in the project. This US$ 100 million project will address the extension, expansion, and development of TIA which includes the civil infrastructures such as runway and taxiway extension, construction of additional parking bay etc. The development of equipment is another component that is also in our priority. These components are ATC automation and communication and navigation equipment. These tasks are part of the capacity enhancement project. We are also planning to separate domestic operators and shift them somewhere close to Kathmandu. Dhulikhel seems to be a possible location and a detailed feasibility study is being conducted for that purpose. We are looking at this alternative so that we can use the present TIA only for International operation. <br />
	<br />
	<br />
	<strong>How is CAAN addressing air traffic issues like landing and take-off, flow of flights and routes etc? <br />
	</strong> <br />
	We have some problems in the international air route and we are inviting Indian authorities to Nepal to hold discussions on this very soon. <br />
	<br />
	<br />
	<strong>How improved has the passenger handling capacity of TIA become in the recent years? <br />
	</strong> <br />
	We are continuously trying to improve our services. But I can’t say that the improvements are significant because of the limited facilities. Even the space is the same as we have been using before. Upon the completion of the ADB project, we would be able to enhance the passenger handling capacity and provide other facilities accordingly. <br />
	<br />
	<br />
	<strong>What happened to the plan of making TIA operational for 24-hours-a-day? <br />
	</strong> <br />
	We are continuously exercising to operate that way. But there are certain things to be considered like manpower planning, reliability of the radar etc which are essential in making TIA operate for 24-hours-a-day. Besides CAAN, the immigration authorities and the security establishments also need to be prepared for it. <br />
	<br />
	<br />
	<strong>What is the overall air service infrastructure situation of Nepal? <br />
	</strong> <br />
	In terms of airports and airport facilities, we (the Ministry of Culture, Tourism and Civil Aviation and CAAN) are aggressively involved in improving and increasing airport infrastructure. The project for constructing Gautam Buddha Regional International Airport at Bhairahawa is in the pipeline. The revised estimated cost for the project is US$ 77 million. Another project for a regional international airport in Pokhara is also proceeding for which China Exim bank has shown an interest to invest in. <br />
	<br />
	<br />
	<strong>How many of our airports are capable of handling international flights in terms of runways and other infrastructures in Nepal? <br />
	</strong> <br />
	Airports in Bhairahawa, Nepalgunj and Pokhara are capable for conducting cross border flights with India. They can operate in Indian cities like Lucknow, Varanasi, Delhi and Patna. As for fullfledged international operations, we only have TIA to look up to. <br />
	<br />
	<br />
	<strong>Experts say that lack of direct international flights from major tourist destinations have resulted in great loss for our tourism sector. What is CAAN doing about it? <br />
	</strong> <br />
	The entire aviation sector understands the value of direct international flights. The scenario of constructing Nijgadh International Airport has emerged due to this need. It’s been so many years that we are talking about constructing it but there is no achievement on this front so far. If the nation really wants to promote the tourism sector on a massive scale, a full-fledged international airport is a must as the present international airport (TIA) is not a full-fledged one. It has many constraints because of the terrain, runways and lack of other infrastructures. That is why it is not possible to operate long haul flights from the US and Europe. Landing a big aircraft is another impossibility given the present circumstances. If the tourists from countries in Europe and the US could travel directly to Nepal, it would have been convenient to us as well as the tourists. For instance, it takes a minimum of two stops and one has to spend more than 24 hours to travel from Europe to Kathmandu. All the pleasure and excitement is gone because the tourists feel exhausted and tired due to long flights. The travellers have to spend more hours in transit than on board the flights. <br />
	<br />
	We are unaware of the exact tourism potentiality of Nepal. The President of International Civil Aviation Organization (ICAO) visited Nepal recently. He was shocked to hear that we were able to bring only about 700,000 tourists against our target to bring in one million tourists during Nepal Tourism Year 2011. <br />
	<br />
	We will not be able to develop our tourism sector as desired if we depend entirely on TIA only. By constructing a full-fledged international airport at Nijgadh will not only enable us to operate long haul international flights but also help establish Nepal as a transit hub like Hong Kong and Bangkok. <br />
	<strong><br />
	<br />
	What do you have to say about the fifth freedom rights of international airliners operating in Nepal? </strong> <strong><br />
	</strong> <br />
	We assure such rights in the Air Service Agreement (ASA) with international operators. The recent controversy with Air Arabia on the fifth freedom rights is meaningless. As per the provision of an ASA between Nepal and UAE, it is their right to seek so. If the international operators do not get their fifth freedom rights, they cannot run their businesses. We can’t even imagine building the Nijgadh Airport leaving aside such rights. Fifth freedom rights will help develop Nepal establish itself as a transit hub. But these controversies are hardly true for some other international airlines. More than 90 per cent international airlines are enjoying fifth freedom rights, for instance, Druk air is operating a flight between Kathmandu and Bhutan via Delhi. <br />
	<br />
	<br />
	<strong>‘Dragonair is Bringing a lot of People into Nepal’ <br />
	<br />
	<br />
	<br />
	<img alt="" src="http://www.abhiyan.com.np/images/uploaded/thomas-bellamy_1343383224.jpg" /><br />
	<br />
	THOMAS BELLAMY </strong> <strong><br />
	Manager - Nepal <br />
	Hong Kong Dragon Airlines Ltd <br />
	</strong> <br />
	<br />
	<strong><br />
	Can you share the rate of increase in passengers flying to and from Nepal over the years? <br />
	<br />
	</strong> Dragon air started its operation in Nepal in 1989. The service was halted in 2001 and re-launched in 2007. We have gradually increased our frequency and now have daily flights. We have increased the aircraft size with the increase in passenger numbers. We are taking more passengers to China, Japan, Australia and the US. These are the big destinations for us. Dragonair is also bringing a lot of people into the country especially during the peak tourist season from September to April. <br />
	<br />
	<br />
	<strong>How do you assess the quality of air service infrastructure in Nepal? <br />
	</strong> <br />
	There have been some good changes at the TIA recently – for example, the new check-in desks and screens that have been installed at the international terminal. We hope for more improvements to be made in the future. It is very important to have a very strong main airport here in Kathmandu to act as a hub for inbound Nepali tourism. <br />
	<br />
	<br />
	<strong>What is the demand on the number of flights over the years? How is Dragon Air managing the supply to meet the demand? <br />
	</strong> <br />
	We have the capacity to meet the growing demands. There is enough demand to utilise the capacity and thus, we increased the frequency to a daily flight in September 2011. We are quite optimistic about Nepal and will continue to monitor such situations. From the tourism perspective, a lot depends on the stability of things here in Nepal. If Nepal can get good coverage in other countries, the travel agents and airlines will be more willing to promote Nepal and the number of passengers will increase as well. <br />
	<br />
	<br />
	<strong>How cooperative have the Nepali government institutions been in helping meet the market demands? <br />
	</strong> <br />
	I think the intentions are good. There are obviously a few constraints in Nepal, but many of these will fall off in a more stable environment. For now, we just need to continue working together to improve wherever we can and to focus on the positives. The Airlines Operating Committee which comprises airport representatives from most of the major carriers in Nepal continues to work with the relevant authorities to look for improvements wherever possible. <br />
	<br />
	<br />
	<strong>What are your unique selling points? How aggressively are you marketing them? <br />
	</strong> <br />
	One of the unique selling points of Dragonair is having Hong Kong as its hub. We have fantastic connections, and together with our sister airline Cathay Pacific, we are capable of connecting passengers to over 160 destinations worldwide. In Hong Kong, the minimum connecting time with Cathay Pacific has been reduced to 50 minutes which gives passengers more choice and convenience. There are many destinations from Hong Kong within a relatively short distance – half of the world’s population within five hours. On the long-haul side of things, we connect to New York four-times-daily. We look at the possible frequency rather than relying solely on our capacity. We want to give passengers more choice, which means provide more departure time wherever sustainable. <br />
	<br />
	Dragonair’s world-class service and quality products have long been recognised – we’ve won the Best Airline – China category for six consecutive years in the respected Skytrax passenger survey and we were also voted the “World’s Best Regional Airline” in 2010 and 2011. Dragonair’s major strength is China. We fly to 19 destinations in mainland China and operate about 400 flights a week. Adding to it, our sound safety record, well-trained and professional staff, and good on-time performance are the positive sides to focus on. <br />
	<br />
	<br />
	<strong>Airlines flying to Nepal are said to have very few business class seats. Is it true that airlines do not see prospects for business class market here? <br />
	</strong> <br />
	Asia has shown its ongoing potential and resilience in the face of the current global economic downturn. Until now, Nepal has widely been regarded as a leisure travel destination. We are optimistic that, with stability, business and industry here can grow and along with it, the demand for business travel will rise. We actually have a decent number of business class seats on our Airbus A330 aircraft, but it would of course be nice if passengers originating from Kathmandu could fill more of those seats. <br />
	<br />
	<br />
	<strong>What are your operational difficulties and privileges received in Nepal? <br />
	</strong> <br />
	The weather is always a challenge for airline operations and it is no exception here in Nepal. We have worked with the authorities and our own engineering teams to overcome the constraints we face here, so as to ensure timely operation as much as possible. This is particularly important in the context of the airport operating hours (the airport closes after midnight). The ever increasing number of tourists would definitely benefit from further improvements at the airport, and we will continue to support positive initiatives from the authorities in that direction. <br />
	<br />
	<br />
	<strong>It is said that operating in Nepal is very cheap despite having poor infrastructure. What are its advantages? <br />
	</strong> <br />
	While operational cost is one of the many factors, we look at running our business anywhere. We see Nepal more for its market potential i.e. its attractiveness as a destination and travel demand to other countries like US, Australia, Japan, Korea and of course Hong Kong and China. <br />
	<br />
	<br />
	<strong>What are your expansion plans? <br />
	</strong> <br />
	We continue to look forward to opportunities in Nepal and act accordingly in terms of available possibilities. We will increase frequency if we continue to see good growth in passenger numbers at sustainable yields. Basically, we will react to the situation, and we’re optimistic that the outlook for Nepal is bright. <br />
	<br />
	On a larger scale, Dragonair is adding six aircraft: four Airbus A320s and two Airbus A330s to the fleet this year - expanding the size of the Dragonair fleet from 32 to 38. Two additional A320s and one A330 have already entered the fleet this May. In terms of Dragonair’s network this year, we launched flights to Jeju on 01 May (three flights per week), to Chiang Mai on 01 July (four flights per week) and to Kolkata, India in winter 2012 (four flights per week). Flights were also resumed to Taichung on 14 May (twice daily), to Guilin on 01 May (daily), and Xian on 01 Apr (daily). <br />
	<br />
	<br />
	<strong>‘Thai Airways was the First Airline to Operate Jet Service to Nepal’ <br />
	<br />
	<br />
	<br />
	<img alt="" src="http://www.abhiyan.com.np/images/uploaded/chantouch-srini_1343383315.jpg" /><br />
	<br />
	CHANTOUCH SRINILTA </strong> <strong><br />
	General Manager <br />
	Nepal &amp; Bhutan <br />
	Thai Airways International Public <br />
	Company Limited <br />
	</strong> <br />
	<br />
	<br />
	<strong>You are going to complete 44 years of operation in Nepal. How has been the journey so far? <br />
	</strong> <br />
	The history of Thai Airways International in Nepal dates back to 1968 when the inhabitants of Kathmandu had their first glimpse of THAI’s 72-seater French built Caravelle SE210 aircraft which touched the unfamiliar runway of Tribhuvan International Airport (TIA). We are going to complete 44 years of our operation in Nepal this year. <br />
	<br />
	THAI was the first-ever airline to operate jet service from Kathmandu and the airline that opened up the forbidden Himalayan Kingdom as a new tourist destination to the world. It was a spectacular and memorable event in the Nepali Aviation history. <br />
	<br />
	THAI also introduced the first computerized reservation system in Kathmandu in February 1985 and provided this facility to its leading travel agents since 1990. Royal Orchid Lounge at the TIA used to be the only lounge operated by THAI in the 1990s. However, after Nepal Government adopted liberal sky policy, many other international airlines joined the race. Our monopoly market share has been diluted a little bit but we are enjoying the competition. It has given us the opportunity to prove ourselves as the first choice carrier in terms of our fleet size and service standards. <br />
	<br />
	<br />
	<strong>What is the demand status on the number of flights over the years? How are you managing the supply to meet the demand? <br />
	</strong> <br />
	Being a pioneer and well renowned carrier, THAI always had the strategy to adjust the number of flights as per market demand. In the beginning, we operated once a week flight between Bangkok and Kathmandu and soon after that, one more flight was added to cope with the high demand of passengers. THAI started daily flights with A300-600 aircraft since the end of October 1997. In the context of growing demand of air seats to/from Nepal, we added three more flights in 2008. Based on the request of different tourism related associations like NATTA, PATA, HAN and NTB, we began to run 10 flights per week. Now we have seven flights a week with a configuration of 30 business class and 279 economy class seats. <br />
	<br />
	<strong><br />
	Thailand has been one of the most popular destinations for outbound tourism for the Nepalis. What is Thai Airways’ contribution to it? <br />
	</strong> <br />
	Thai Airways has played a leading role in the development of tourism not only in Thailand but also in helping Nepal in worldwide promotion as a major tourist destination through various media like our in-flight magazine “Sawadee” and Royal Orchid Holiday Packages tours. Besides performance, punctuality, and silk class services to our valued customers, we have joined hands with the Tourism Authority of Thailand by frequently organizing different events like Trade Fairs, Educational/ Medical fairs, familiarization trips for agents and media, Thai Food festivals, Thai Puppet shows etc. We also offer attractive packages and special fares for students and leisure travelers. <br />
	<br />
	<br />
	<strong>How has Thai Airways been promoting Nepal at the international level? <br />
	</strong> <br />
	Thai Airways was the first airline to operate jet service to Nepal and introduce this country to the world. These days, many airlines are inspired to operate their services in this country due to our successful operation for the past 44 years. THAI had actively participated in “Visit Nepal Year 1997” and spread good word all over to promote “Nepal Tourism Year 2011” as well. We joined hands with the organizers of Asian Mountain Bike championship in 2008 by offering special fares to the participants all around the world. In addition, we organized a big puja same year to introduce Lumbini to the pilgrims from all around the world. This year, we are going to sponsor the famous Nepali musical group “Sur Sudha” to perform in Thailand. <br />
	<br />
	<br />
	<strong>How cooperative are the Nepali Government institutions in helping meet the demands from this market? <br />
	</strong> <br />
	Thai Airways has been getting a very constructive support from the government bodies in Nepal. This is one of the reasons behind our uninterrupted service for the past 44 years. We have always been able to bring into operation the required number of flights connecting Kathmandu and Bangkok as per our market demand. This cooperation is good for both the countries in terms of tourism, economy, education and other sectors. We are thankful to the Nepal Government, NAC, CAAN, TIA, ATC, NTB, NATTA and PATA for the continued support extended towards THAI. <br />
	<br />
	<br />
	<strong>Most of the flights made to Nepal are targeting migrant workers. How sustainable is this policy? <br />
	</strong> <br />
	Labor traffic does not occupy a major business of our flight operations, it is only a partial business of our total occupancy. Since the very beginning, we have had different segments of traffic like the royalties, frequent flyers, government officials, diplomats, expats, students and the tourists. Labor traffic is also part of our business but as I said we don’t depend heavily on it. <br />
	<br />
	<br />
	<strong>What are the operational difficulties and facilities in Nepal? <br />
	</strong> <br />
	Lack of proper infrastructure, unstable government, political instability and unhealthy competition among budget airlines are the drawbacks hindering smooth operation of the renowned carriers such as THAI. <br />
	<br />
	<br />
	<strong>Operating in Nepal is said to be cheap. What is your experience? <br />
	</strong> <br />
	We do not think operating in Nepal is cheap. On the contrary, it is one of the most expensive in terms of ground handling, parking and landing, ground space, rental, ramp, fuel and all kind of other charges. <br />
	<br />
	<br />
	<strong> How are you managing your ground handling staff and crew members? <br />
	</strong> <br />
	THAI has its own handling service in Nepal. It has never compromised in quality services; therefore, we have our own operational, ground handling and administrative staff directly under the THAI set up of course. <br />
	<br />
	<br />
	<br />
	<br />
	<br />
	<strong><br />
	</strong></p>
<p>
	<strong>GSAs that Fuel the Business <br />
	<br />
	<br />
	By Gaurav Aryal </strong><br />
	<br />
	<br />
	Around 85 per cent of international airlines operating in Nepal have made their presence felt through a number of GSAs <br />
	<br />
	<br />
	International airline companies operating in Nepal prefer having a presence through their General Sales Agents (GSA) rather than having their local office stationed in the country. Around 85 per cent of international airlines operating in Nepal have made their presence felt through GSAs. Out of the 28 international airlines currently in operation, only four of them, namely Thai Airways, Air India, Qatar Airways and Etihad Airways have their country offices in Nepal. A source at a leading travel agency under the condition of anonymity said “It’s not only offline but also the online airlines that are operating through their GSAs in Nepal.” <br />
	<br />
	<br />
	Sunil Sharma, Managing Director at Society Travel Service Pvt Ltd said that offline GSAs could be of any number as travel agents have Special Prorate Agreement (SPA) with offline airlines on a code sharing basis. He said that such offline airlines carry transit passengers flying from Nepal to various sectors and destinations around the world. Sharma, who is also a GSA of RAK Airways said, “It would be a major headache for airline companies to have their office setup here and run after various things ranging from policies to issues regarding aviation fuel. The airlines feel it would be a waste of time as the documentation procedure here is difficult along with the bureaucratic hassles. GSAs have the knowhow about local issues and it would be easier for the airlines to operate through GSAs who are handed over with specific duties and responsibilities.” <br />
	<br />
	<br />
	Similarly, it is believed that the GSAs have a greater knowledge on the local market as they are the local partners that have been in existence for a long time. “GSAs bear expenses, mobilise local staff, have detailed information about the local market, and having a GSA is cost effective than having an airline office established here. So, the international airlines prefer having GSAs rather than setting up their local offices of their own,” said the source. GSAs, usually the agent for sales of air tickets, are also the partner for marketing the airlines they represent. The source said that airlines and agents in Nepal jointly carry out marketing campaigns for the airlines. According to the source, the travel agencies are lured to work as GSAs because they receive override commissions along with additional commissions and other benefits like travel certificates, and staff trainings among others. Sharma also said that GSAs work on override commission and set up office, hire staff required at the corporate office and even at the airport. However, ground handling is not allowed to be performed by GSAs as it is taken care of by Nepal Airlines Corporation for every airline other than Thai Airways and Air India. “The majority of the clientele of GSAs are anybody going abroad, be it tourists, migrant workers, students, business persons, visitors, expatriates and everybody else who is travelling,” said a source at a leading travel agency. The source added that the ratio of Nepalis to foreigner passengers is 75:25 per cent. Sharma said that the companies that work as GSAs for passenger segment are also the Cargo Sales Agents (CSA) with the respective airlines. Sources said that GSAs have been operating in Nepal for over three decades now. <br />
	<br />
	<br />
	However, sources said that it is difficult to exactly pin point the size of the GSA market and their respective market share because everything depends on the demand and supply of flights. They added that the demand and supply keeps on varying constantly. <br />
	<br />
	<br />
	The number of international air passengers flying to and from Nepal has increased over the years and so has the number of flights. In the first three months of this year, 717,182 international air passengers travelled via Nepal. According to the data of Nepal Tourism Board, 207,961 tourists arrived in Nepal via air route from January to April 2012. It is a 23.1 per cent increment from 168,958 tourist arrival during the same period of 2011. The major reason behind the increment in air passengers is the increase in tourist inflow and migrant workers going abroad in search of job opportunities, according to Ratish Chandra Lal Suman, General Manager at Tribhuvan International Airport. President Tours and Travels (PTT) represents around half-a-dozen airlines as their GSA. Gulf Air, Qantas Airways, Kenya Airways, United Airlines, Air Mauritius, Indigo Air are some of the airlines that it represents but PTT is the passenger sales agent for United Airlines and Indigo Air. Similarly, Zenith Travels Pvt Ltd, another travel agency represents Bahrain Air, Sri Lankan Airlines, Spice Jet, Turkish Airlines and Qatar Airways Cargo as their GSA. <br />
	<br />
	<br />
	<strong>New Airlines in Nepali Sky <br />
	<br />
	<br />
	By Dipa Baral <br />
	</strong><br />
	<br />
	AirAsia X has already started operations while Malaysia Airlines and BB Airways are planning to operate international flights from September this year <br />
	<br />
	<br />
	Nepal is on the way to become an international air hub, thanks to the rise in the number of tourists and labour traffic in the past few years. AirAsia X, the budget carrier of AirAsia, has already started operations from July 4 this year while Malaysian national carrier Malaysia Airlines and Kathmandu based BB Airways are planning to operate international flights from coming September. Besides, some prominent countries have shown interest to sign Air Service Agreements (ASAs) or to review the past ASAs with Nepal. AirAsia X has started scheduled flights between Malaysian capital Kuala Lumpur and Kathmandu two times a week i.e. Tuesdays and Thursdays and has plans to add two more flights from September this year. The airline has priced its ticket at Rs 11,000 (exclusive of taxes) for one way trip. “The ASA between Nepal and Malaysia allows Malaysian airliners to operate 21 flights a week. But, AirAsia X has taken the permission to operate seven flights a week at the most,” said Suresh Acharya, Head of Air Services Agreement, Airlines and Airport Operation Division at the Ministry of Culture, Tourism and Civil Aviation (MoTCA). <br />
	<br />
	<br />
	BB Airways, promoted by TBI Group of Non Resident Nepalis (NRNs) in Japan, will also operate flights from September 13 this year. The company has already brought a Boeing 757-200 (ER) on wet lease that will operate nine flights a week to Doha and Malaysia. “We will bring another aircraft of the same category after a month of our formal operation and operate 17 flights a week,” said Shishir Bhatta, CEO of BB Airways. The company will also add Singapore and Bangkok to its destinations after getting another aircraft on lease. <br />
	<br />
	<br />
	BB Airways had acquired a license for international operations from the MoTCA in the first week of January 2012. “We are aiming to promote Nepali identity all over the world through our international air service and aspire to place Nepal in the global travelling map,” said Bhatta. The airways has not made public its flight rates yet but informed that the ticket booking will be available both online and via travel agencies. <br />
	<br />
	<br />
	The third airline in the pipeline to commence international air service in Nepal is Malaysia Airlines, the national flag carrier of Malaysia. “It’s been more than a year since Malaysia Airlines obtained operating license from the ministry. It has plans to start flights from coming September,” said Acharya. The airline has a permission to operate seven flights a week between Nepal and Malaysia. Similarly, four countries— Vietnam, America, Australia and Indonesia—have shown interest to sign ASAs with Nepal while United Kingdom (UK), Jordan, Pakistan, Bhutan and United Arab Emirates (UAE) want to review their past ASAs. “We have not been able to translate the talk into action because of Nepal’s vague stance on fifth freedom. When the world is practicing freedom right up to the ninth, we are still arguing over granting fifth freedom right,” said Acharya. In December 2010, the government had to bar Air Arabia from exercising its fifth freedom right to fly on the Kathmandu- Kuala Lumpur sector at the eleventh hour following pressure from Nepal Airlines Corporation (NAC). The national flag carrier had claimed that the decision will make serious impact on its business. The case is now pending in the Supreme Court. “Rather than restricting the government from signing deals with international airlines, it must concentrate on its own capacity building and adopt aggressive marketing strategy,” said Acharya. He underscored the need of networking, partnership and alliance with other airlines to sustain in the present world. However, if NAC had believed that Air Arabia’s fifth freedom right would jeopardise its existence, it is yet to see what impact the entry of these three new airlines will make. “Once the new airlines commence operation, the competition will become even tougher because they will certainly end NAC’s monopoly in catering to the labour traffic. But, we cannot hold the market for NAC as the country has been practicing liberal sky policy. It is high time that NAC improved its services and got ready for competition,” said Acharya. <br />
	<br />
	<br />
	The MoTCA has also issued a 45-day public notice on May 25 inviting domestic operators to apply for international operation. The notice has invited applications for a chartered and a cargo flight each. Companies having paid-up capital of Rs 500 million and security bond of Rs 5 million can apply for the license by paying Rs 50,000 to the ministry and avail the document of Terms of Reference (ToR). The companies should also pay Rs 50,000 per route as royalty. <br />
	<br />
	<br />
	“So far, Siddartha International Airlines has applied to operate a chartered flight. But we hope to get some more applications as there is still enough time to apply,” said a high level official at the MoTCA. <br />
	<br />
	<br />
	<strong>Five Airlines: One Destination <br />
	<br />
	<br />
	By Sushila Budhathoki </strong><br />
	<br />
	<br />
	Nepal experienced the formal beginning of aviation in 1949 when a lone 4-seater Indian Beechcraft Bonanza aircraft arrived in Kathmandu <br />
	<br />
	<br />
	With 27 per cent arrivals and 14 per cent departures out of the total passenger movement in the year 2011, the airline companies originating from India contribute a large chunk of the international passenger movement in Nepal via its flights to Kathmandu. According to the TIA passenger manifest, the airlines from India registered passenger arrival numbering 354,738 out of the total of 1,292,515 passengers that landed in Nepal and 377,867 departures out of the total 1,407,512 departing passengers. Nepal experienced the formal beginning of aviation in 1949 when a lone, 4-seater Indian Beechcraft Bonanza aircraft arrived in Kathmandu. And after a decade, Himalayan Aviation Dakota had the first charter flight between Calcutta (now Kolkata) and Kathmandu. Airlines from India came into business operation from 1953. More than half-a-century of existence in the Nepali sky, Indian airliners still prove to be among the leading carriers that bring substantial number of passengers to Nepal. Ranjan Pokhrel, Head of the International Relations Department at CAAN, says, “If we look into the history of Nepali aviation, we find that the Indian airliners have made a significant contribution to Nepal’s aviation development.” He adds, “Indian airliners are important not only for the aviation sector but also to the economic, social and cultural aspects of Nepal. They are contributing towards providing transport facilities, bringing Indian tourists and strengthening the high level political relationship between Nepal and India from the beginning.” Currently, there are five Indian carriers - Air India, Jet Airways, Jet Lite, Indigo Airlines and Spice Jet - operating between Nepal and India. Kingfisher Airlines, once a major operator on the Kathmandu-Delhi route, has postponed its many international flights including the Kathmandu sector. Air India now operates 32 flights in a week which includes a daily flight between Kathmandu and Delhi and 4 flights a week on the Kathmandu-Kolkata and Kathmandu-Banaras routes. Similar is the story of another Indian carrier Jet Airways which operates a daily flight each on the Delhi-Kathmandu and Mumbai-Kathmandu sectors. Jet Lite, Spice Jet and Indigo have one flight each on the Delhi-Kathmandu route on a daily basis. <br />
	<br />
	<br />
	Nepal Airlines Corporation (NAC), the only Nepali airlines which pioneered flights to Indian cities has now postponed its flights since November 2011. It used to fly to Patna, Calcutta, Mumbai and Bangalore earlier. In the last two decades, NAC has not added any new aircraft. Pradip Karki, Director of Traffic Management at NAC, however, assures that flights to Indian destinations will resume soon. He says NAC must resume flights to India with a new fleet and the government should support the idea. He adds, “We have discussed and signed an MoU with the aircraft manufacturing company to either buy or lease aircraft. There may be Airbus A320 - a 150 seater or A330 - a 250 seater that will operate flights to India in the future.” Most Indian carriers are said to be low cost carriers (LCCs) when compared to other airlines. The fare for the economic class seats starts at Rs 6,300 while business class seats cost a maximum of Rs 34,000 on the Kathmandu-Delhi route. Many other international airlines have started to fly in the same route and the competition has grown stronger. TK Saha, the Country Manager at Air India says that his team is happy with the sector. “In spite of severe competition by other international airlines as well as Indian competitors, we are maintaining and operating our flights with an average of 74 per cent occupancy,” he adds. <br />
	<br />
	<br />
	Nepali and Indian aviation authorities reviewed the Air Service Agreement (ASA) in 2009 to permit Nepali airline companies to fly 24 destinations in India. As per the reviewed ASA, airlines from Nepal can incre',
			'published' => true,
			'created' => '2012-08-10',
			'modified' => '2012-08-22',
			'keywords' => '',
			'description' => 'The flow of international passengers in the first quarter of 2012 has been impressive enough to raise optimism among the concerned stakeholders. The statistics between January and March 2012 is an indication that international air service and passenger movement to and from Nepal is set to register a significant increase this year compared to 2011.',
			'sortorder' => '550',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 13 => array(
		'Article' => array(
			'id' => '642',
			'article_category_id' => '40',
			'title' => 'Infrastucture :The Basis To Development',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	<img align="left" alt="cover story" border="1" height="431" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/infra.jpg" style="margin:10px; padding:10px;" vspace="10" width="390" />The state of infrastructure in Nepal is far from promising at present, observe experts. While the government is primarily responsible for developing infrastructure in the country, it has more or less failed to live up to expectations largely due to its incapability of making use of available resources and money power. The governmentâ€™s inability to use the management acumen of the private sector has made matters worse. In recent times, the private sector has made its presence felt in developing infrastructure at its own level, especially in the communication and hydropower sectors.</p>
<p>
	According to the world global competitiveness report, in 2009/10, Nepal was placed in 131st position out of 133 countries in the quality of infrastructure. In 2010/11, Nepalâ€™s position further declined to 139th position, the lowest in the fray. This shows a severe need of quality infrastructure and upgrade of the existing ones in the country.</p>
<p>
	However, figures for basic infrastructure in other sectors are miserable, to say the least. At present, 890 people use one kilometre of road while 87 per cent of energy demand is still met through traditional sources. The government has prioritised infrastructure development from the beginning of planned development in 1956. Nepal spends around 60 to 70 per cent of around Rs 11 billion GDP annually, for infrastructure.</p>
<p>
	<strong>Private Sector Participation</strong></p>
<p>
	Private sector participation in development of physical infrastructures was formally realised only with the promulgation of act that facilitated private sector investment in 2006. From 1990 to 2007, the private sector invested US$ 404 million in just eight projects of low income category according to World Bank statistics. Out of these, five were in energy and three in telecom sector. The government realising the importance of the private sector involvement in developing infrastructure projects has adopted models like BOT (Build-Operate- Transfer), BOOT (Build-Own-Operate- Transfer), Design-Build-Operate (DBO), Design-Build-Maintain (DBM) etc. These models are in use for foreign partnerships mostly in hydropower projects.</p>
<p>
	 </p>
<p>
	 </p>
<p>
	 </p>
<p>
	<img align="middle" alt="cover story" border="1" height="125" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/cove5.jpg" vspace="5" width="200" /></p>
<p>
	<strong>Public-Private Partnership</strong></p>
<p>
	While the government suffers from capital crunch, the private sector has a profit maximising motive on top of its agenda. Therefore, a model of public-private partnership (PPP) seems to be a viable proposition for infrastructure development purpose. Purusottam Man Shrestha, National Project Manager of Public-Private Partnership for Urban Environment (PPPUE) observes that PPP model remedies the weaknesses of developing projects independently by the private sector or government. He adds, â€œIn the course of maximising profit, the private sector may disregard the interest of general public where the profit tends to get low.</p>
<p>
	Similarly, public sector is not seen as efficiently handling the projects and managing them, which can be best done by the private sector. The model of PPP can create a win-win situation for both the private and public sector partners.â€ With this model of development, possible losses can be minimised with the government backing while revenue collection can be best utilised with prudent management skills. In Nepal, few projects in sectors like drinking water, waste management, urban sanitation, solar street lights, bio-gas, urban transportation management like parking space, bus terminal management etc are under consideration, according to Shrestha. All these are projects are at a micro level, mostly developed in coordination with local government-like municipalities.</p>
<p>
	Large projects under PPP model like Kathmandu-Terai Fast Track, West-Seti A 750 MW project etc have been much discussed but are yet to see the daylight. Shrestha believes projects of small nature can be most suitable at the moment considering the financing capacity of the private sector. Solid waste management, drinking water, health related waste management, transmission line are taken as the best projects under this model.</p>
<p>
	Health and education are two other sectors that are considered appropriate for this model. R B Rauniar, the Managing Director of Interstate Multi-Modal Transport Pvt Ltd opines PPP is the best model of infrastructure development where there is a possibility of generating revenue as well as the development of basic infrastructure. He further says the frequent changes in policy and lack of national commitment on the political parties and leaders in the government has become the largest barrier for this model to be successful. Experts believe Nepal is yet to make preparations and work out so that this model will be the method of developing required infrastructures for the country.</p>
<p>
	<strong>Physical Infrastructures <br />
	</strong></p>
<p>
	Whether the private sector will invest or not in the development industry is dependent on the suitable investment climate and market for a particular infrastructure. The private sector can invest and develop in physical infrastructure like roads where there are alternatives. Alternative and fast track roads, bridges carry potential for private sector where they collect toll from the users. But private sector road developments like toll roads need huge investment which is difficult to manage by the business community alone.</p>
<p>
	In hydropower and communication sector, there has been encouraging private sector participation. Small and midsized hydropower projects are being developed by this community. In the communication sector, there are large players like Ncell, UTL, and new comers like Smart Telecom and Hello Nepal making their strong presence. Mega projects like the new international airport at Nijgadh in Bara, Kathmandu-Terai expressways and railway lines, mega hydro projects etc are not less viable. The proposed new international airport at Nijgadh could be one of the promising projects.</p>
<p>
	<strong><img align="left" alt="cover story" border="1" height="200" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/serv.jpg" style="margin:10px; padding:10px;" vspace="10" width="300" />Service Infrastructures <br />
	</strong></p>
<p>
	The private sector is seen active in developing and operating service infrastructures that are much needed for the general public. Private schools, colleges and hospitals have set a level of quality of services which their public counterparts are unable to compete with. Shrestha said that the issues witnessed in these sectors like over commercialisation can be solved if the PPP model can be used in these areas. He said that this model will help to expand the service over a larger area and larger group of service recipients. This model prevents these basic services from being too profit oriented.</p>
<p>
	<strong>Prospects <br />
	</strong></p>
<p>
	The private sector is demanding the development of basic infrastructure, however, very little is heard about the private sector taking initiative in sizeable physical infrastructure projects. Manakamana cable car is one prominent exception in this regard. In fact this project stands testimony that Nepalâ€™s private sector can develop infrastructure projects into profitable ventures. Experts believe there are numerous possibilities where private sector investors can take infrastructure as an investment opportunity. Small and medium projects in urban areas related to parking space, waste management and drinking water are attractive for this sector and identified as easy to develop too, according to Shrestha.</p>
<p>
	There are projects that garner profitable returns similar to that of any other business endeavours they have been traditionally carrying out. Some believe that development projects can be independently carried out by the private sector while some disagree with it. The latter opine that hard infrastructure development is the primary function and duty of the government. Till date, only 300 MW of total installed capacity of hydropower is produced but the demand is for 1100 MW. Besides, there is a huge market in India too. This underlines a great potential and demand for physical infrastructure.Pradeep Gangol, the Executive Manager of the Independent Power Producersâ€™ Association (IPPAN) reasons, â€œThe private investment is all the more important in poor countries like Nepal, which have limited resources to invest in infrastructural sectors like power, telecommunication, and transportation. If the private sector invests in hydropower, the government can allocate more funds for sensitive sectors like health and education.â€</p>
<p>
	<strong>Bottlenecks</strong></p>
<p>
	The biggest problem that infrastructure development faces is the financing issue. With the interest rate tremendously high, the rate of return becomes too low for anybody to find an interest in financing infrastructure projects.</p>
<p>
	Gangol says that time consuming procedure to acquire approval for forest use, environmental approval, procurement and use of explosives and land acquisition for projects also make it difficult to initiate projects. In the hydropower sector, the major problem is the constant price offered by Nepal Electricity Authority (NEA) to independent power producers for the last ten years while the bank interest rates are going up continuously.</p>
<p>
	<strong>The Way Forward</strong></p>
<p>
	The private sector players accept they are not in a position to develop large scale physical infrastructure at present. Availability of capital to finance these projects is the major hurdle. Though the business community has realised the potential of investing in infrastructure, they are doing so only in areas like hydropower and telecommunication. If the private sector is allowed to bring in foreign soft loan, developing large hydropower or similar revenue generating projects will be possible.</p>
<p>
	Similarly, Shrestha suggested that the donor agencies should involve themselves in PPP financing as well in addition to financing government projects like the ones at present. The Nepali financial market is still not oriented to PPP projects or infrastructure development. So a special tool can be devised for collecting capital from this market.</p>
<p>
	Similarly, general public can also be encouraged to invest in infrastructure projects. The governments in the developing countries like Nepal mostly have the budgetary constraints to commence the development projects. Therefore, PPPs can prove to be the alternative source of infrastructure investment. To attract and invite the private sector, first of all, the government must devise a viable project and put a certain amount of money.</p>
<p>
	Development partners too must look at such projects along with the government projects which will also help make greater impact of the donor funding. It is definite to take few more years when the private sector will gain confidence and prepare itself to develop infrastructure. Though there are hopes and prospects, it is certain that much time is required to see if private sector owned development projects actually become a reality. &nbsp;</p>',
			'published' => true,
			'created' => '2012-02-24',
			'modified' => '2012-08-23',
			'keywords' => '',
			'description' => 'In 2009/10
Nepal was
placed in 131st
position out of
133 countries
in the quality of
infrastructure.
In 2010/11,
Nepalâ€™s position
further declined
to 139th position.Projects of small
nature can be
most suitable
at the moment
considering
the fi nancing
capacity of the
private sector.',
			'sortorder' => '542',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 14 => array(
		'Article' => array(
			'id' => '641',
			'article_category_id' => '40',
			'title' => 'The Government Should Play A Proactive And Facilitating Role',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	Pradeep Gangol is the Executive Manager of the Independent Power Producers Association, Nepal (IPPAN). IPPAN has been consistently advocating and lobbying for investor friendly environment in Nepalese power development. Gangol is also a senior hydropower engineer and has more than two decades of experience to his credit in planning, surveying and designing of hydropower projects. During his long career, he was also involved in the reconnaissance and feasibility level design of micro and small hydropower projects, river training projects and slope stabilisation projects. In an interview with New Business Age, Gangol shared his views on prospects and constraints of developing hydropower based on private sector investment.</p>
<p>
	<strong><img align="left" alt="cover story" border="1" height="500" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/cove4.jpg" style="margin:10px; padding:10px;" vspace="10" width="378" />What is the prospect of private sector investment in Nepalese hydropower sector?</strong></p>
<p>
	The prospect of private sector investment in Nepaleses hydropower sector is indeed great. The enormous power potential in Nepal and the huge market for it, both domestically and in neighbouring countries make Nepal a lucrative destination for domestic and international investors. The private investment is all the more important in poor countries like Nepal, which have limited resources to invest in infrastructural sectors like power, telecommunication and transportation. If the private sector can invest in hydropower, the government can allocate more funds for sensitive sectors like health and education. However, the government of Nepal has to do a lot to improve the investment climate in Nepal so as to lure investors to invest in Nepalese&nbsp; hydropower sector.</p>
<p>
	<strong>Hydroelectricity sector has been attracting some private investors for developing projects. How can the private sector investors be encouraged to invest further in this sector? <br />
	</strong></p>
<p>
	The Government of Nepal has to think in a more liberal way and announce a series of incentives that will make Nepalese power sector the most lucrative for investment in the world. Such measures/incentives will eventually lead to the construction of numerous small, medium and large hydropower projects all over Nepal, and help create employment for millions of people. It will also generate billions of rupees, through royalties, for the government and local DDCs and VDCs and help local people become prosperous through purchase of shares. Besides, it can accelerate local development through CSR activities like access roads, heath posts, schools, trails, irrigation canals, vocational and technical training etc. The government should keep in mind that investment will flow where there is an opportunity for profit.</p>
<p>
	<strong>Is it the issue of returns or are there any other reasons for private sector being hesitant to invest in infrastructure? <br />
	</strong></p>
<p>
	In spite of enormous potential for hydropower development in Nepal and possibility of huge power market in India, investors are still shying away from investing into Nepalese power sector. Besides rate of return issues, Nepal has to make sure that it has open access to the Indian market through a government-to-government agreement.</p>
<p>
	And the government has to assure that there will be policy stability at least for a reasonable period of time, say 10 years. Last year, for example, the department of electricity development (DoED) made changes in its rules and regulations four times within a year. Such frequent changes in rules and regulations and policies do not help in enthusing investors to invest in Nepalese power sector. Furthermore, it is a very time consuming process to acquire documents related to forest clearance, EIA, procurement and use of explosives. Land acquisition for projects is also equally difficult. Now-a -days, it is becoming increasingly difficult to manage local expectations.</p>
<p>
	<strong>Do you see the possibility of developing projects independently by private companies? <br />
	</strong></p>
<p>
	Nepali power companies can develop small power projects (up to 25 MW) independently. For bigger projects, however, they have to enter into joint ventures with foreign power companies or investors. The government should encourage more and more domestic investors to invest in hydropower, by way of equity investment.</p>
<p>
	<strong>Why do you think commercial banks are hesitating to invest in this sector?</strong></p>
<p>
	It is a very strange situation that though Nepal is facing an unprecedented 19 hoursa- day of load shedding, the commercial banks are reluctant to invest in the power sector. The main reason is that the power purchase agreement (PPA) rates have remained virtually stagnant over the last 10 years. During the same period, the prices of construction materials like cement, steel rods, copper wire, fuel costs, and labour charges have increased exponentially.</p>
<p>
	To make matters worse, the bank interest rates have also increased from 10 per cent to 15 per cent. The government is still hesitant to make suitable adjustments in PPA rates and thats why the PPA rates reflect market conditions. For example, if a farmer finds that the cost of producing potatoes is Rs 20 per kg as against the market price of Rs 16 per kg, s/ he will rather invest in producing other crops that ensure better rates of return. This is the reason for which the commercial banks are reluctant to invest in the power sector.</p>
<p>
	<strong>What are the challenges for investors after developing a project? <br />
	</strong></p>
<p>
	The challenges for investors to invest in Nepalese power sector are many. The tariff rates do not reflect market conditions while the bank interest rates are still high. It is difficult and time consuming to overcome bureaucratic hassles to acquire documents related to forest clearance, EIA report, procurement and use of explosives etc. Land acquisition is another problem that the investor is finding increasingly difficult to cope with. Policy changes are frequent, more often to discourage the investors. And lastly, it is becoming increasingly difficult to cope with the management of local expectations.</p>
<p>
	<strong>How do you expect the government to play a role so as to invite more private investors in this sector? <br />
	</strong></p>
<p>
	The government has to make appropriate changes in the electricity act and policies so as to instil confidence in investors. There should be an electricity regulatory commission that will create a level playing field for both private and public sectors. The government should make adjustment in power tariff so as to ensure reasonable rate of return. If needed, it should think about VAT exemption to make the power sector most lucrative in Nepal. The objective of the whole exercise should be to lure general public (through shares), investors, and banks to invest enthusiastically in the power sector. There should be policy stability for at least 10 years. Furthermore, a new department of clearance can be established under the energy ministry to ensure that all documents are processed within a month. The government should play a proactive and facilitating role in acquiring land for projects and managing local expectations.</p>
<p>
	<strong>How do you find the government's role in ending the energy crisis at the earliest and accelerate power development in Nepal?</strong></p>
<p>
	Nepal is facing unprecedented load shedding of 19 hours a day which is a serious problem. But the government does not seem to be as serious as the grave situation demands. The measures announced by the government seem to be piecemeal, rather than announcing all the needed measures at once. The present power crisis, if continued any longer, will eventually put our entire economy to a grinding halt. Therefore, the politicians have to become more serious in solving Nepalese power problems. &nbsp;</p>',
			'published' => true,
			'created' => '2012-02-24',
			'modified' => '2012-08-23',
			'keywords' => '',
			'description' => 'Pradeep Gangol is the Executive Manager of the Independent Power Producers Association, Nepal (IPPAN). IPPAN has been consistently advocating and lobbying for investor friendly environment in Nepalâese power development. Gangol is also a senior hydropower engineer and has more than two decades of experience to his credit in planning, surveying and designing of hydropower projects.',
			'sortorder' => '541',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	)
)
$current_user = null
$logged_in = false
$xml = false
include - APP/View/Elements/side_bar.ctp, line 133
View::_evaluate() - CORE/Cake/View/View.php, line 971
View::_render() - CORE/Cake/View/View.php, line 933
View::_renderElement() - CORE/Cake/View/View.php, line 1224
View::element() - CORE/Cake/View/View.php, line 418
include - APP/View/Articles/index.ctp, line 157
View::_evaluate() - CORE/Cake/View/View.php, line 971
View::_render() - CORE/Cake/View/View.php, line 933
View::render() - CORE/Cake/View/View.php, line 473
Controller::render() - CORE/Cake/Controller/Controller.php, line 968
Dispatcher::_invoke() - CORE/Cake/Routing/Dispatcher.php, line 200
Dispatcher::dispatch() - CORE/Cake/Routing/Dispatcher.php, line 167
[main] - APP/webroot/index.php, line 117

Warning (2): simplexml_load_file() [<a href='http://php.net/function.simplexml-load-file'>function.simplexml-load-file</a>]: I/O warning : failed to load external entity &quot;&quot; [APP/View/Elements/side_bar.ctp, line 133]Code Context  //  $file = 'http://aabhiyan:QUVLg8Wzs2F7G9N7@nepalstock.com.np/api/subindexdata.xml';



    if(!$xml = simplexml_load_file($file)){
$viewFile = '/var/www/html/newbusinessage.com/app/View/Elements/side_bar.ctp'
$dataForView = array(
	'articles' => array(
		(int) 0 => array(
			'Article' => array(
				[maximum depth reached]
			)
		),
		(int) 1 => array(
			'Article' => array(
				[maximum depth reached]
			)
		),
		(int) 2 => array(
			'Article' => array(
				[maximum depth reached]
			)
		),
		(int) 3 => array(
			'Article' => array(
				[maximum depth reached]
			)
		),
		(int) 4 => array(
			'Article' => array(
				[maximum depth reached]
			)
		),
		(int) 5 => array(
			'Article' => array(
				[maximum depth reached]
			)
		),
		(int) 6 => array(
			'Article' => array(
				[maximum depth reached]
			)
		),
		(int) 7 => array(
			'Article' => array(
				[maximum depth reached]
			)
		),
		(int) 8 => array(
			'Article' => array(
				[maximum depth reached]
			)
		),
		(int) 9 => array(
			'Article' => array(
				[maximum depth reached]
			)
		),
		(int) 10 => array(
			'Article' => array(
				[maximum depth reached]
			)
		),
		(int) 11 => array(
			'Article' => array(
				[maximum depth reached]
			)
		),
		(int) 12 => array(
			'Article' => array(
				[maximum depth reached]
			)
		),
		(int) 13 => array(
			'Article' => array(
				[maximum depth reached]
			)
		),
		(int) 14 => array(
			'Article' => array(
				[maximum depth reached]
			)
		)
	),
	'current_user' => null,
	'logged_in' => false
)
$articles = array(
	(int) 0 => array(
		'Article' => array(
			'id' => '870',
			'article_category_id' => '40',
			'title' => 'Now Is The Challenge Of Getting Right Reinsurer At A Competitive Price',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	<strong style="color: rgb(35, 200, 250); font-size: 16px; text-align: right;">‘When the losses start decreasing, the premium will come down’</strong></p>
<p style="text-align: justify;">
	<strong><img align="right" alt="Kewal Krishna Shrestha, Everest Insurance" height="316" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/kewal_cover_feb2013.jpg" style="margin: 0 0 0 10px;" width="250" /></strong></p>
<address style="text-align: right;">
	<strong>Kewal Krishna Shrestha&nbsp;</strong></address>
<address style="text-align: right;">
	<strong>President, Nepal Insurers Association &amp;</strong></address>
<address style="text-align: right;">
	<strong>CEO, Everest Insurance</strong></address>
<p style="text-align: justify;">
	<strong><br />
	</strong></p>
<p style="text-align: justify;">
	<strong>What is the size of the aviation insurance market in Nepal?</strong></p>
<p style="text-align: justify;">
	The market size is around Rs 420- 500 million in terms of the premium we collect from our clients.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What about your company’s stake in the market?</strong></p>
<p style="text-align: justify;">
	We own around 25-30 per cent share in Nepal’s aviation insurance market.&nbsp;</p>
<p style="text-align: justify;">
	<strong>It is said that some insurance companies are trying to form a pool to collectively handle the claims on aviation insurance. Are you aware of the latest progress in this regard?</strong></p>
<p style="text-align: justify;">
	I don’t think the pool is what we need to improve the aviation insurance business. Now we are competing to get the lowest rate from reliable companies (reinsurers) but if such a pool is formed, there would be monopoly in the insurance market and there would be no competition. Insurance companies could syndicate the aviation insurance business and the situation could worsen further. The premium will be at a high rate and the airliners will raise the ticket price which in turn will make air travelling difficult. It seems beneficial to all of us but if we view it minutely it is only a means of syndicating that could affect the whole country economically. &nbsp;</p>
<p style="text-align: justify;">
	However, if such pool is sure to be formed we could form this pool in two ways. One, we can calculate certain risks in the aviation industry and other, we can focus on the risks involved in the hull, baggage etc. However creating such a pool needs lots of vision.&nbsp;</p>
<p style="text-align: justify;">
	Beema Samiti recently organized an interaction programme on the possibilities of merger between &nbsp;insurance companies. This interaction was a good initiation in the insurance business but I think both the government and Beema Samiti should be well prepared on it. It needs lots of homework and researches whether to form a pool or to merge the insurance companies.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What future do you see for the aviation insurance business in Nepal?</strong></p>
<p style="text-align: justify;">
	The prospects of aviation business in Nepal depend on the growth of the airliners. The more airlines are there, the better for the aviation insurance business. The theory of demand and supply is applied in the aviation business also. Many airlines are not functioning well and some of them have registered but have not started their operation yet. If new airliners start operating it would benefit both the airliners and the aviation industry. &nbsp;Development of airports and runways in a sustainable way can also sustain airliners. And the development of airliners ultimately grows the aviation insurance business. Since there is a lot of prospects in the tourism sector, I see bright future of aviation insurance business.&nbsp;</p>
<p style="text-align: justify;">
	<strong>Aviation insurance premium in Nepal is said to be one among the highest in the world? Why is it so high?</strong></p>
<p style="text-align: justify;">
	No, I disagree with this. We used to pay 8-9 per cent premium some 10 years ago and we were able to reduce that as low as 2 per cent later. Now again the reinsurance companies are charging the same old rate or even higher. It is mainly because of the risk factors in the aviation industry of Nepal and I don’t think it is unjustifiable. The terrain, safety measures in the aviation industry in Nepal and lack of maintaining safety standards by all the stakeholders involved in the aviation industry are some of the reasons behind the increment of premium. We lack the standard safety measures in spite of ICAO advice.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What do you expect from the Beema Samiti or the government for that matter to facilitate the aviation insurance business in the country? &nbsp;</strong></p>
<p style="text-align: justify;">
	The government can enforce the safety standards. It can properly manage the runways, ground handling, and certify efficiency of the people and the equipment used in the aircraft or for the aircraft maintenance. If you see how the baggage in airports is handled, you will find how improperly things are done. The baggage is loaded in tractors and the insurer has to pay if there is a damage. Furthermore, the international airport in Nepal is very crowded. I think the TIA should now be shifted to some convenient place.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What are the key challenges and issues facing the aviation insurance industry in Nepal?</strong></p>
<p style="text-align: justify;">
	Now is the challenge of getting the right reinsurer at a competitive price. The aviation business is anyway running though the reinsurers are charging up to 12 per cent. But what if they charge 20-25 per cent? I don’t think aviation in Nepal could bear such high premium rates. Moreover, the environment could be such that even the high premium might not draw reinsurers into confidence. Because of the high risk involved in this business, the reinsurers could add more clauses which could affect the overall aviation business in Nepal. And then it will be hard to find reliable reinsurers and we will have to reinsure with whichever party we find. When the claim increases, the premium market becomes hard and reinsurers hesitate to do business. And aviation insurance is driven by reinsurers. Unless the scenario of this seller-driven market changes, we won’t have any other alternative.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What needs to be done to address these challenges?</strong></p>
<p style="text-align: justify;">
	CAAN has to be strong. All the stakeholders of the aviation industry should maintain the safety standards prescribed by ICAO in terms of physical amenities, ground handling, aircraft maintenance, tracing of the aircraft personnel etc. Maintaining the safety standard is the foremost requirement. Everybody in the aviation industry should strictly follow the policies and run under rules and regulations of the government. &nbsp;</p>
<p style="text-align: justify;">
	<strong>The annual claims payout in the aviation section has been constantly rising. This is bound to further increase the already significantly high aviation insurance premium. How are we going to tackle this problem?</strong></p>
<p style="text-align: justify;">
	This is not a problem; it’s an outcome which is natural. When claims payout in the aviation sector starts increasing, increment in the premium is normal internationally. &nbsp;And when the claims start rising, the party is affected and slowly it affects other airliners. When the risk is found the reinsurer loads the premium and that is considered normal in the insurance business.&nbsp;</p>
<p style="text-align: justify;">
	When safety measures are properly followed the risk has to go down. For this, all the stakeholders in the aviation industry should come together and contribute. &nbsp;Evaluation of our work and adopting things that make this business ideal as well as searching ways of perfection in the aviation business is a must.&nbsp;</p>',
			'published' => true,
			'created' => '2013-03-16',
			'modified' => '2013-03-16',
			'keywords' => '',
			'description' => 'Now we are competing to get the lowest rate from reliable companies (reinsurers) but if such a pool is formed, there would be monopoly of the insurance companies and there would be no competition.',
			'sortorder' => '754',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 1 => array(
		'Article' => array(
			'id' => '869',
			'article_category_id' => '40',
			'title' => 'When The Losses Start Decreasing, The Premium Will Come Down',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	<strong style="color: rgb(35, 200, 250); font-size: 16px; text-align: right;">‘When the losses start decreasing, the premium will come down’</strong></p>
<p>
	<img align="right" alt="Pronab Sen, National Insurance Company Ltd" height="317" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/pronab_cover_feb2013.jpg" style="margin: 0 0 0 10px;" width="250" /></p>
<address style="text-align: right;">
	<strong>Dr Pronab Sen&nbsp;</strong></address>
<address style="text-align: right;">
	<strong>Chief Executive Officer,&nbsp;</strong></address>
<address style="text-align: right;">
	<strong>Nepal</strong><strong>National Insurance Company Ltd</strong></address>
<p>
	 </p>
<p style="text-align: justify;">
	<strong>What is your company’s stake in the aviation insurance portfolio?</strong></p>
<p style="text-align: justify;">
	We are moving very selectively in the aviation insurance in Nepal. Previously, Guna Air was 100 per cent with us and now Simrik Air has taken it over. There are some airliners which are having reinsurance support from our corporate office in India- like Buddha Air. We have around five percent market share in the aviation portfolio. Agni Air is co-insured with Shikhar Insurance – 60 percent with them and 40 per cent with us. Another airline in Pokhara has insured 49 per cent with us and 51 per cent with Shikhar. We are now negotiating with Simrik because Guna was with us. &nbsp;</p>
<p style="text-align: justify;">
	We are the direct branch of a reinsurance company in India governed by the Indian Government. We have high retention capacity. We reinsure the portion to other reinsurance companies that is beyond our financial strengths. This is a worldwide phenomenon in insurance business. It depends on portfolios and varies from risk to risk. Sometimes, we retain 20 per cent and sometimes 90- depending on the risks.</p>
<p style="text-align: justify;">
	<strong>Is it true that the insurance companies in Nepal have not been able to make profits from aviation insurance? Why?</strong></p>
<p style="text-align: justify;">
	Yes it is true. And the reason is there are a number of airliners which are very small in size. It may be also because of the weather and terrain of Nepal. Small airliners and aviation companies do not afford expertise and there are few airliners where I have seen the full expertise – this is the biggest challenges for the Nepali aviation sector. Many of the aircraft are also very old. &nbsp;</p>
<p style="text-align: justify;">
	Some of the insurance companies have retention capacity of 0.4 per cent and rest is reinsured. These companies are getting only the reinsurance commission. &nbsp;</p>
<p style="text-align: justify;">
	<strong>Some insurance companies are trying to form a pool to collectively handle the aviation insurance claims. What is your view on this proposal?</strong></p>
<p style="text-align: justify;">
	It is still in the pipeline. Nothing concrete has come out so far. But if such a pool is formed, it will help both the aviation insurers as well as the airliners. After the formation of the pool, they don’t have to run around different countries trying to find out the lowest rate. Once the pool is formed, they know that they have to approach only one office which will organize everything. And the office will be the consortium of a number of insurance companies.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What future do you see for aviation insurance business in Nepal?</strong></p>
<p style="text-align: justify;">
	The future is good because there is a tremendous growth in the tourism sector in Nepal. The tourism sector has a tremendous scope and the more this sector grows, the more the aviation sector expands. More people prefer to travel by air in Nepal considering the time taken in travelling by roads. By air you reach Pokhara in 20-25 minutes.But if you take a bus, it takes 5- 6 hours. And the growth of airliners has paved the road for growth of the aviation insurance companies.&nbsp;</p>
<p style="text-align: justify;">
	<strong>Almost whatever the insurance companies earn from the aviation segment goes to the reinsurance companies abroad. Some are even said to be making losses in the aviation segment. It is said that the companies know that they are not going to make profits from the aviation segment. But they do aviation insurance just to show high insurance premium collection. What do you say?</strong></p>
<p style="text-align: justify;">
	It is not like that. The premium is based on the past losses. If you see the statistics, almost every year there is an air crash and some years, there are around two air crashes in Nepal. And the rate of premium is governed by the reinsurance market. Because of the air accidents, some of the reinsurers were hesitant to do business in Nepal. The aviation summit last month also put forth lots of similar issues in the aviation industry- the dos and the don’ts. Beyond that, the aviation business has a very bright future.&nbsp;</p>
<p style="text-align: justify;">
	<strong>Aviation insurance premium in Nepal is said to be one among the highest in the world? Why is it so high?</strong></p>
<p style="text-align: justify;">
	Yes. As I already said, insurance premiums are based on the past losses. Because of the crashes, the premium has been rising. The recent crashes of Sita Air and Agni Air were a serious concern for the reinsurers.&nbsp;</p>
<p style="text-align: justify;">
	<strong>Are those high premium rates justifiable?&nbsp;</strong></p>
<p style="text-align: justify;">
	The loss is calculated based on the coverage offered by the insurance companies. Suppose there is a loss. You pay some percent of the loss. You pay for the hull losses and the machinery parts or you pay for the passenger liabilities. Passenger liability losses are much higher than the hull losses depending on the kind of passengers. The liability losses are much higher if the passengers are from the US or Canada, and lower if they are from the SAARC countries. The liability losses vary from people to people because of theirs living standard. While finalizing the rates, reinsurers study these things.&nbsp;</p>
<p style="text-align: justify;">
	Airliners not only fly Nepali people or SAARC people but also other foreigners. For example, most of the people in the mountain flights are from European countries. Furthermore, airliners have different premiums depending on their types, aircraft, and management facilities they have.&nbsp;</p>
<p style="text-align: justify;">
	<strong>How can we lower the high insurance premium?</strong></p>
<p style="text-align: justify;">
	It’s a million dollar question. It has to be high, otherwise it won’t be viable. We are not totally dependent on our own companies. We may not have the capacity, so we need to approach other markets for reinsurance. When the losses start decreasing, the premiums will simultaneously come down. For example in India, the fire premium rate was very high in the past. Many studies were conducted. And when they calculated the total premium over a period of time, and how much profit they generated- then the premium started coming down. Likewise, though the premium is high at the moment, it will definitely go down every year if the risk is reduced. In the present scenario, you don’t have any choice. Until the reinsurer accepts the business, how can you reinsure?</p>
<p style="text-align: justify;">
	<strong>The country’s first-ever aviation insurance summit was organized in the capital recently. How helpful was this summit?</strong></p>
<p style="text-align: justify;">
	I think it was helpful. We got to know the perspectives of different reinsurers present there. It was the first of its kind event in Nepal and was helpful for everyone involved in the aviation industry.&nbsp;</p>',
			'published' => true,
			'created' => '2013-03-16',
			'modified' => '2013-03-16',
			'keywords' => '',
			'description' => 'We have high retention capacity. We re-insure the portion to other reinsurance companies that is beyond our financial strengths.',
			'sortorder' => '753',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 2 => array(
		'Article' => array(
			'id' => '868',
			'article_category_id' => '40',
			'title' => 'Unhealthy Competition Among The Insurance Companies Should Be Stopped',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	<span style="color:#23c8fa;"><span style="font-size: 16px;"><strong>‘Unhealthy competition among the insurance companies should be stopped’</strong></span></span></p>
<p>
	<strong><img align="right" alt="Prem Bahadur Maharjan, Rastriya Beema Sansthan" height="307" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/prem_cover_story_feb2013.jpg" style="margin:0 0 0 10px;" width="250" /></strong></p>
<address style="text-align: right;">
	<strong>Prem Bahadur Maharjan&nbsp;</strong></address>
<address style="text-align: right;">
	<strong>Chairman</strong></address>
<address style="text-align: right;">
	<strong>Rastriya Beema Sansthan</strong></address>
<div>
	 </div>
<p style="text-align: justify;">
	<strong>What is your company’s stake in the aviation insurance market?</strong></p>
<p style="text-align: justify;">
	The amount of insurance is calculated in foreign currency. We own around USD 2 million business which constitutes 30 to 40 per cent of the total aviation insurance business. We are the only insurance company insuring big aircraft including jet planes. We have insured the Jet planes of the national flag carrier, Nepal Airlines, and BB Airways lately. We have succeeded in acquiring the largest proportion of insurance share in the market because national airlines is insured with us. &nbsp;&nbsp;</p>
<p style="text-align: justify;">
	<strong>Is it true that the insurance companies have not been able to make profits from aviation insurance? Why?</strong></p>
<p style="text-align: justify;">
	I don’t agree with this. &nbsp;In our case, we feel that there is some harsh competition including in the premium rates. And particularly in the private airlines sector, we have witnessed a number of air crashes. That might have contributed to the loss in the overall aviation insurance business but it is not the case of Beema Sansthan. We have not gone through such loss. Nor &nbsp;have our clients faced such air crashes.&nbsp;</p>
<p style="text-align: justify;">
	<strong>Some insurance companies are trying to form a pool to collectively handle the claims on aviation insurance. When could we see such a pool?</strong></p>
<p style="text-align: justify;">
	I have also heard about it. I guess the practice of collectively handling the aviation insurance claims is yet to materialize. It would be good if such a pool is formed. It will help prevent unhealthy competition.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What future do you see for aviation insurance business in Nepal?</strong></p>
<p style="text-align: justify;">
	I see a lot of potential for this business. &nbsp;The aviation market has grown in Nepal over the years and with it, the aviation insurance business, too, has grown. The other big reason is that Nepal is promoting tourism by organizing many events. This has increased the number of air passengers to Nepal and thus helped the aviation insurance in the country.&nbsp;</p>
<p style="text-align: justify;">
	<strong>Almost whatever the insurance companies earn from the aviation segment goes to the reinsurance companies abroad. Some are even said to be making losses in the aviation segment. It is said that the companies know that they are not going to make profits from the aviation segment. But they do aviation insurance just to show high insurance premium collection. What do you say?</strong></p>
<p style="text-align: justify;">
	In a way, it is true. Since we don’t have a strong financial institution that can cover the aviation insurance, we depend on foreign reinsurance companies. Though the percentage of commission from premium collection that we collect seems minimal, we are able to sustain the operation. Though the commission might be less in comparison to the bigger amount of insurance premium; we have other indirect benefits as well. It is because we have to reinsure &nbsp;with very reliable reinsurance companies recognized internationally. There are very few reliable reinsurance companies. Beema Sansthan has found a re-insurer based in the United Kingdom.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What do you expect from the Beema Samiti or the government for that matter to facilitate the aviation insurance business in the country? &nbsp;</strong></p>
<p style="text-align: justify;">
	There is unhealthy competition among the insurance companies at present. They tend to take the aviation insurance business at low rates ignoring the risk factors. The situation is such that some companies might collapse if something bad happens to the airlines they have insured. Moreover, I have heard that some insurance companies are even unable to pay out the claims. Beema Samiti, being the regulatory body, can set some standards to avoid such kind of unhealthy competition. Beema Sansthan is a government-owned institution. So, it does not need to jump into this unhealthy competition. Though aviation insurance is growing, almost all the premium collected here goes abroad. We get only a fraction of it as commissions. I think this is the time that Beema Samiti should form a government-owned re-insurance company in Nepal. It will help us to stop or decrease the amount of money going outside the country.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What are the key challenges and issues facing the aviation insurance industry in Nepal?</strong></p>
<p style="text-align: justify;">
	As I already mentioned, the first challenge is unhealthy competition among some insurance companies. The risk factor is also growing and it is making premiums costlier. We have witnessed many air crashes in a quite short period of time. It is not only about insurance, it is also about the safety of the people.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What needs to be done to address these challenges?</strong></p>
<p style="text-align: justify;">
	There has to be a strict monitoring mechanism for air traffic discipline. People involved in the aviation business should be given safety education. Pilots should also be alerted not to take any sort of risks.&nbsp;</p>
<p style="text-align: justify;">
	Moreover, unhealthy competition among the insurance companies should be stopped. And it could be managed since there are very limited insurance companies in the aviation sector. Furthermore, the government should try to establish reinsurance companies here in Nepal itself.</p>
<p style="text-align: justify;">
	<strong>The country’s first-ever aviation insurance summit was organized in the capital recently. How did you find this summit?</strong></p>
<p style="text-align: justify;">
	From educational point of view, the summit was quite fruitful to the people involved in the aviation insurance sector. It was successful in raising the issues related to the risk factors in the aviation insurance and about the premiums that are in practice. Such summits are helpful in making people aware about the things happening in the aviation insurance market. I expect such events to continue.&nbsp;</p>',
			'published' => true,
			'created' => '2013-03-16',
			'modified' => '2013-03-16',
			'keywords' => '',
			'description' => 'The first challenge is unhealthy competition among some insurance companies.The risk factor is also growing and it is making premiums costlier.',
			'sortorder' => '752',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 3 => array(
		'Article' => array(
			'id' => '867',
			'article_category_id' => '40',
			'title' => 'Airclaims Is A Major Resource For Nepali Civil Aviation',
			'sub_title' => '',
			'summary' => null,
			'content' => '<address>
	<strong style="text-align: right;"><font color="#23c8fa" size="3"><span style="font-style: normal;">‘Airclaims is a major resource for Nepali civil aviation’</span></font></strong></address>
<address>
	<strong style="text-align: right;"><font color="#23c8fa" size="3"><span style="font-style: normal;"><br />
	</span></font></strong></address>
<address>
	<strong>Douglas G Cavannagh</strong></address>
<address>
	<strong>Risk and Safety Manager</strong></address>
<address>
	<strong>Airclaims&nbsp;</strong><strong>(A UK-based leading reinsurance company)</strong></address>
<p style="text-align: justify;">
	<strong><br />
	</strong></p>
<p style="text-align: justify;">
	<strong>How long has your company been involved in the insurance business in Nepal?&nbsp;</strong></p>
<p style="text-align: justify;">
	Airclaims is the leading provider of claims, risk management and asset management services to the global aviation industry. Founded in 1964 Airclaims has been handling aviation insurance claims in Nepal since the late 1960s. Airclaims currently handles in excess of 2500 assignments each year though a global network of 20 offices. Airclaims is the leading provider of such expertise worldwide.&nbsp;</p>
<p style="text-align: justify;">
	In terms of Airclaims risk and safety consulting services this service offering was initially utilised by aviation insurance underwriters to assess the risk profile of different operators. The initiation of these studies was often a consequence of a serious accident or a deteriorating loss record on the part of an operator.&nbsp;</p>
<p style="text-align: justify;">
	As our capability grew these services were expanded to include risk and safety assessments of maintenance, repair and overhaul facilities, helicopter operators, ground handling companies and airports. During the past 20 years many of these services have also been utilised by petroleum and mining companies who use our expertise to assess the risk of different contractors that they use. Airclaims is now one of the leading providers of operator risk assessments in this sector. Our experience is often in demand from investors who require a bespoke due diligence study to assist them to better understand the risks associated with a potential acquisition and to provide valuations and condition surveys of aircraft to potential purchasers or those who wish to update the value of their aviation assets. We also undertake a considerable amount of work for airlines and operators who require a completely impartial assessment of their operation and a worldwide perspective to help them improve their own internal safety capability. This ranges from the initial assessment and needs analysis, to project management, training, coaching and final assessment.&nbsp;</p>
<p style="text-align: justify;">
	In today’s challenging asset management environment, the demand is for a business partner that not only has a strong reputation and broad capability but also the consistency of approach.&nbsp;</p>
<p style="text-align: justify;">
	Our integration of what are typically considered separate functions, such as project management, airworthiness oversight, powerplant services and risk management are all combined to form ten core modules, providing a unique capability&nbsp;</p>
<p style="text-align: justify;">
	<strong>How do you differentiate yourself from other companies?</strong></p>
<p style="text-align: justify;">
	We differentiate ourselves by:&nbsp;</p>
<ul>
	<li style="text-align: justify;">
		Drawing on ‘real world’ experience gained from our involvement in the aftermath of many of the largest aviation accidents and losses during the past 50 years.&nbsp;</li>
	<li style="text-align: justify;">
		Being able to recommend bespoke solutions to mitigate risk based on our work with all the different parties involved in aviation, not just airlines and operators.&nbsp;</li>
	<li style="text-align: justify;">
		Using our international experience gained from working with many different nationalities and cultures, to train and coach organisations on how to achieve the same objectives using alternative methods.&nbsp;</li>
	<li style="text-align: justify;">
		Using our exposure to accident sites and our knowledge of emergency response services to tailor procedures to the reality of what actually happens during these events.&nbsp;</li>
</ul>
<p style="text-align: justify;">
	<strong>The size of your business in Nepal at present?&nbsp;</strong></p>
<p style="text-align: justify;">
	That really depends on how often there is an accident. Unfortunately for some that has been a little too often. If there was to be a reduction in the number of accidents as a result of Airclaims providing Risk Management rather than Claims Management Services then that would be fine with us too. We are currently the preferred aviation claims handling company for the national airline and a number of domestic operators in Nepal and also most International carriers who operate services to Kathmandu. Our presence in Nepal over many decades has enable Airclaims to build up much valued relationships.&nbsp;</p>
<p style="text-align: justify;">
	<strong>Why is the insurance premium in aviation so high in Nepal?&nbsp;</strong></p>
<p style="text-align: justify;">
	There are a number of factors that affect the rate at which the insurance premium is calculated in any market. Some of those factors are loss record, operating environment and the type and value of the aircraft being insured.&nbsp;</p>
<p style="text-align: justify;">
	Nepal is undoubtedly a challenging operating environment for operators and crews in terms of terrain, weather and infrastructure and these factors do mean that along with a loss record that reflects these challenges, insurance costs will be higher. However, with improvements in infrastructure, training and operations, it is quite possible to address many of these factors and in doing so ensure that the cost of insurance is maintained at a reasonable level.&nbsp;</p>
<p style="text-align: justify;">
	There is also the factor of insurance market capacity something which cannot be directly influenced in Nepal. Worldwide, it could be said that there is a good deal of capacity i.e. insurers who want to underwrite aviation risks. Capacity and competition help keep the price down although, Nepal is seen as a higher risk region because of the factors already mentioned above.&nbsp;</p>
<p style="text-align: justify;">
	We know that all parties involved in aviation in Nepal are keen to support the improvements that are needed to ensure risk is reduced and Airclaims are ready to play its part in the provision of not just loss management services but also risk management services.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What are the challenges faced by the aviation insurance business in Nepal?&nbsp;</strong></p>
<p style="text-align: justify;">
	The challengers faced by the aviation insurance business in Nepal are the challenges that face the aviation operators as well. The biggest challenge is to reduce operational risk. Despite the significant challenges that are faced, Nepal is clearly serious in its desire to reduce risk and consequently improve safety. It can be done.&nbsp;</p>
<p style="text-align: justify;">
	The main challenges facing aviation in Nepal are:&nbsp;</p>
<ul>
	<li style="text-align: justify;">
		Infrastructure improvement. There needs to be a significant investment in better basic airport facilities (i.e. runways, navigation aids, etc.)&nbsp;</li>
	<li style="text-align: justify;">
		Weather reporting. There is a requirement for a significant number of automatic weather stations to report the weather being experienced in real time, via satellite link, in the more remote parts of the country.&nbsp;</li>
	<li style="text-align: justify;">
		Better operational control being exercised by the operators. It needs to become a complete team effort especially when difficult decisions are needed associated with dispatch of aircraft in the difficult operational environment that exists.&nbsp;This will become even more important over the next decade or so as the average age and experience levels of pilots are reduced.&nbsp;</li>
	<li style="text-align: justify;">
		More and better training to help reduce the effect of the loss of highly experienced pilots over the next ten years.&nbsp;</li>
</ul>
<p style="text-align: justify;">
	<strong>What can Nepal do to overcome these challenges?&nbsp;</strong></p>
<p style="text-align: justify;">
	The system of regulation that has been in place for the past 50 plus years may have reached its maximum effectiveness. Regulation by requiring compliance with rules and regulations has probably got as good as it will get globally. The adoption of a more proactive and predictive Safety Management System (SMS) is needed by the operators and aviation authorities in Nepal. Having an effective way of safety oversight such as through adoption of a Safety Management System (SMS) has been proved to improve safety and risk management culture. Such a system can be used to support airline owners, airline managers, pilots &amp; engineers and all who are involved in aviation; this includes the regulators who must have a key role in supporting new ways of looking at risk and safety management and oversight.&nbsp;</p>
<p style="text-align: justify;">
	<strong>The annual claims payout in the aviation section has been constantly rising. This is bound to further increase the already significantly high aviation insurance premium. How are we going to tackle this problem?&nbsp;</strong></p>
<p style="text-align: justify;">
	The current global picture is interesting with record low levels of claims for successive years. Unfortunately this trend has not been seen in Nepal. Tackling the problem will require leadership on the part of the regulating authorities towards resetting the scene for risk and safety management such as through improvement in the operational management operators. The regulating authorities can and need to play a leading role in improving oversight and ensuring that all operators are able to take advantage of an open and even handed approach to improvement of infrastructure and operational standards. Operators investing in good safety systems and management should be supported and those that are failing to do this need to be provided with proper advice and if necessary some forms of sanction up to and including withdrawal of AOC.&nbsp;</p>
<p style="text-align: justify;">
	New approaches and thinking will bring positive benefits. We can’t just keep doing business as we have always done and expect things to get better on their own. Change is inevitable in all businesses not least aviation and the benefits to Nepal can be significant in terms of social and economic reward.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What prospects do you see for aviation insurance business in Nepal in the future?&nbsp;</strong></p>
<p style="text-align: justify;">
	The prospects for aviation insurance business in Nepal are bright. There is a capable and knowledgeable local market which has good relationships with the global insurance community. The present level of risk is too high but there are enough insurers willing to support the market, albeit currently at a higher cost than in some other places. What is perceived as the current high cost of insurance can and should be reduced for operators who demonstrate a good safety culture and record, adopt a Safety Management Programme that is working well and can prove that it is making a difference.&nbsp;</p>
<p style="text-align: justify;">
	<strong>Is there anything else that you would like to say?&nbsp;</strong></p>
<p style="text-align: justify;">
	As a leading provider of Claims Handling and Risk and Asset Management Services and with our long association with Nepal aviation, Airclaims can help make a safer environment for all stakeholders in aviation in Nepal, but it has a cost. Therefore, we are ready to work with the leaders of aviation in Nepal to support Nepal in the development of its aviation capability and ambitions with safety as the focus of any plan. Once it happens all of Nepalese society will reap the benefits.&nbsp;</p>',
			'published' => true,
			'created' => '2013-03-16',
			'modified' => '2013-03-16',
			'keywords' => '',
			'description' => 'Nepal is undoubtedly a challenging operating environment for operators and crews in terms of terrain, weather and infrastructure and these factors do mean that along with a loss record that reflects these challenges, insurance costs will be higher.',
			'sortorder' => '751',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 4 => array(
		'Article' => array(
			'id' => '866',
			'article_category_id' => '40',
			'title' => 'Sky Is The Limit For Aviation Insurance In Nepal',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p style="text-align: justify;">
	<img align="right" alt="Prakash Panday, Shikhar Insurance Company Ltd" height="276" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/prakash_panday_cover_feb2013.jpg" style="margin: 0px 0px 0px 10px;" width="235" /></p>
<address style="text-align: right;">
	<strong style="color: rgb(35, 200, 250); font-size: 16px; font-style: normal;">‘Sky is the limit for aviation insurance in Nepal’</strong></address>
<address style="text-align: right;">
	 </address>
<address style="text-align: right;">
	<strong>Dip Prakash Panday</strong></address>
<address style="text-align: right;">
	<strong>CEO</strong></address>
<address style="text-align: right;">
	<strong>Shikhar Insurance Company Ltd</strong></address>
<p>
	 </p>
<p style="text-align: justify;">
	<strong>What is the size of the aviation insurance market in Nepal?</strong></p>
<p style="text-align: justify;">
	The total size of the aviation insurance market of the domestic private sector in Nepal is around USD 8.5 -9 million.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What about your company’s stake in the market?</strong></p>
<p style="text-align: justify;">
	We have around 70-75% market share.</p>
<p style="text-align: justify;">
	<strong>Is it true that the insurance companies have not been able to make profits from the aviation insurance? Why?</strong></p>
<p style="text-align: justify;">
	Aviation Insurance in Nepal has been a loss making portfolio for all the insurers involved. &nbsp;This has been because of the losses in the last couple of years. Nepal is being taken as a high risk zone for aviation insurance.&nbsp;</p>
<p style="text-align: justify;">
	<strong>It is said that some insurance companies are trying to form a pool to collectively handle the aviation insurance claims. What is the latest progress in this regard?</strong></p>
<p style="text-align: justify;">
	It is a very good concept. Reinsurance companies support about 99.5 per cent insurance and only 0.5% is handled by the local insurance companies. The main idea behind forming this pool is to take the advantage of the volume and also to get quality reinsurers so that losses get paid in a timely manner and also to have standardization in all the policies. &nbsp;This can also help in some investment in safety features.&nbsp;</p>
<p style="text-align: justify;">
	<strong>How is this pool going to help the insurance companies, if and when it is formed?</strong></p>
<p style="text-align: justify;">
	It is still in the planning process. Insurance companies and operators have to come together with full support from the regulators before such a pool can be formed. &nbsp;</p>
<p style="text-align: justify;">
	<strong>What future do you see for aviation insurance business in Nepal?</strong></p>
<p style="text-align: justify;">
	Sky is the limit for aviation insurance in Nepal. The only thing is that safety factors have to be improved. Nepal’s aviation sector is classified as the highest risk zone for reinsurers. We want to see Nepal as a safe destination. When a pool of insurers is going to own the overall aviation insurance, more responsibility shall be felt. Risk management is very important.&nbsp;</p>
<p style="text-align: justify;">
	<strong>Almost whatever the insurance companies earn from the aviation segment goes to the reinsurance companies abroad. Some are even said to be making losses in the aviation segment. It is said that the companies know that they are not going to make profits from the aviation segment. But they do aviation insurance just to show high insurance premium collection is. What do you say?</strong></p>
<p style="text-align: justify;">
	We are not sending money, we are transferring risk. The reason that the companies are still in profit is because the money is flowing in from the reinsurers abroad. Since they agreed to take the risk, they bear the losses as well. But after eight consecutive years of losses, they are getting scared. Some of the reinsurers have already withdrawn from the Nepali aviation market.</p>
<p style="text-align: justify;">
	<strong>How can we lower the high insurance premium?</strong></p>
<p style="text-align: justify;">
	It will take time. It is important to win the confidence of the reinsurers and prove that Nepal’s aviation sector is a safe zone for investment. This can be done only by reducing the losses. Fear is a very dangerous thing. Our terrains are difficult, which has sent a wrong perception. Similarly, loss is also a perception and this can be changed. All we need is 2 to 3 years of good loss ratio.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What do you expect from the Beema Samiti or the government for that matter to facilitate the aviation insurance business in the country? &nbsp;</strong></p>
<p style="text-align: justify;">
	It would be great if the Beema Samiti would help in the process of making an Aviation Pool. Active participation and support is required from them and the Civil Aviation Authority of Nepal (CAAN), especially on the safety side. This should not be only on papers but also in practice.&nbsp;</p>
<p style="text-align: justify;">
	<strong>What are the key challenges and issues facing the aviation insurance industry in Nepal?</strong></p>
<p style="text-align: justify;">
	CAAN has to take the lead role. CAAN and the private airline operators should be more alert. There should be an improvement in monitoring flight data, safety infrastructure etc. For example, many airports in Nepal are not black-topped. When the weather is bad, flights should be aborted and airports should be closed. Individual behavior should be monitored by the operators. We also need to invest in training and skill development of the people involved in the aviation business.&nbsp;</p>
<p style="text-align: justify;">
	<strong>The annual claims payout in the aviation section has been constantly rising. This is bound to further increase the already significantly high aviation insurance premium. How are we going to tackle this problem?</strong></p>
<p style="text-align: justify;">
	There should be a considerable investment in safety measures. I feel that the only way out now is to produce good results for the reinsurers. Losses do happen but the frequency of losses in our country is high. If we go jointly, I feel that this will be a good beginning and we can produce significant results. &nbsp;</p>
<p style="text-align: justify;">
	<strong>There are various types of aviation insurance policies in the world. Are all of them available in Nepal?</strong></p>
<p style="text-align: justify;">
	Three basic types of aviation products are available in Nepal. These are basically for Hull, Liability including Passengers and Crew Personnel Accident and Hull War. Hull insurance covers the insurance of aircraft. Till last year, Combined Single Limit Liability insurance required was USD 60 million per aircraft which has now been revised. Hull War insurance is used in case of war, hijacking etc. &nbsp;</p>
<p style="text-align: justify;">
	<strong>The country’s first-ever aviation insurance summit was organized in the capital recently. How helpful was this summit?</strong></p>
<p style="text-align: justify;">
	Reinsurers came to the market and studied it. Their perception has changed. We took them to see our infrastructures including a mountain flight and had discussions on the current issues of the aviation market. We are trying our best to boost the reinsurers’ confidence. We feel that the summit has helped to bring some positive change in their risk perception of our country.</p>
<div style="text-align: justify;">
	 </div>',
			'published' => true,
			'created' => '2013-03-16',
			'modified' => '2013-03-16',
			'keywords' => '',
			'description' => 'The reason that the companies are still in profit is because the money is inflowing from the reinsurers abroad. Since they agreed to take the risk, they bear the losses as well.',
			'sortorder' => '750',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 5 => array(
		'Article' => array(
			'id' => '782',
			'article_category_id' => '40',
			'title' => 'Cover Story January 2013',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p style="text-align: justify;">
<!--[if gte mso 9]><xml>
 <w:WordDocument>
  <w:View>Normal</w:View>
  <w:Zoom>0</w:Zoom>
  <w:TrackMoves/>
  <w:TrackFormatting/>
  <w:AutoHyphenation/>
  <w:PunctuationKerning/>
  <w:ValidateAgainstSchemas/>
  <w:SaveIfXMLInvalid>false</w:SaveIfXMLInvalid>
  <w:IgnoreMixedContent>false</w:IgnoreMixedContent>
  <w:AlwaysShowPlaceholderText>false</w:AlwaysShowPlaceholderText>
  <w:DoNotPromoteQF/>
  <w:LidThemeOther>EN-US</w:LidThemeOther>
  <w:LidThemeAsian>X-NONE</w:LidThemeAsian>
  <w:LidThemeComplexScript>X-NONE</w:LidThemeComplexScript>
  <w:Compatibility>
   <w:BreakWrappedTables/>
   <w:SnapToGridInCell/>
   <w:WrapTextWithPunct/>
   <w:UseAsianBreakRules/>
   <w:DontGrowAutofit/>
   <w:SplitPgBreakAndParaMark/>
   <w:DontVertAlignCellWithSp/>
   <w:DontBreakConstrainedForcedTables/>
   <w:DontVertAlignInTxbx/>
   <w:Word11KerningPairs/>
   <w:CachedColBalance/>
  </w:Compatibility>
  <w:BrowserLevel>MicrosoftInternetExplorer4</w:BrowserLevel>
  <m:mathPr>
   <m:mathFont m:val="Cambria Math"/>
   <m:brkBin m:val="before"/>
   <m:brkBinSub m:val="--"/>
   <m:smallFrac m:val="off"/>
   <m:dispDef/>
   <m:lMargin m:val="0"/>
   <m:rMargin m:val="0"/>
   <m:defJc m:val="centerGroup"/>
   <m:wrapIndent m:val="1440"/>
   <m:intLim m:val="subSup"/>
   <m:naryLim m:val="undOvr"/>
  </m:mathPr></w:WordDocument>
</xml><![endif]-->	<span style="font-size:14px;"><img alt="coverstory" border="1" height="281" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/international.jpg" vspace="10" width="400" /></span></p>
<p class="MsoNormal" style="text-align: justify;">
	<strong><span style="font-size:14px;"><span class="A8"><span style="font-family: ">By Sushila Budhathoki</span></span></span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<strong><span style="font-size:14px;"><span class="A8"><span style="font-family: ">&nbsp;</span></span></span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<strong><span style="font-size:14px;"><span class="A9">International <span style="line-height: 115%; font-family: ">Degrees in Nepal International Degrees in Nepal</span></span></span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<strong><span style="font-size:14px;"><span class="A9"><span style="line-height: 115%; font-family: ">&nbsp;</span></span></span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span class="A16">G</span><span style="color: black;">one are the days when students had no choice but to go abroad for foreign degrees, thanks to the increasing number of foreign educational institutions which are providing internationally recognized education in Nepal.</span><br />
	<br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">With the growing popularity of A Level, international affiliation has become important for the brand value of the Nepali educational institutions. According to the Ministry of Education (MoE), the importance of foreign affiliation for higher education emerged to the fore zone six years ago in BS 2063 and currently there are 87 educational institutions affiliated to foreign institutions. Among them, 36 institutions are providing Bachelor level and above Degrees (see table). Dr Keshav Kumar Shrestha, Executive Director, Curriculum Development Centre (CDC) of Tribhuvan University, says getting affiliations to foreign universities has seen an upsurge in Nepal in recent years. “These institutions are helping students to broaden their knowledge and make them more practical as well as assisting them to complete the courses more efficiently keeping in mind that the world is turning into a global village,” he says.<br />
	<br />
	<img alt="coverstory" border="1" height="314" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/coverstory(4).jpg" vspace="10" width="469" /></span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">These colleges have emerged at a time when going abroad for study has become a common phenomenon. The foreign institutions operating in Nepal are expected to lower this trend as enrolling in these institutions is more accessible and affordable. According to a government publication titled “Nepal Education in Figures 2012”, a total of 11,912 students applied for permission to go to 53 different countries during fiscal year 2011/12. Among them, 3,759 were female and 8153 were male students. Samjana Basnyat, Principal of International School of Tourism and Hotel Management, says, “As education is vital, a degree from a reputed institution is a feather in your cap. General Nepalis cannot afford to go abroad for higher studies.”</span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">International exposure is one of the factors that helps to make an individual qualified globally. The foreign-affiliated institutions in the country provide an international exposure as well as an international degree to the students. They get the same certificate which the students who go abroad can hope to get. According to Kshitij Regmi, Business Development Director at Islington College, though the fee structure of the foreign-affiliated colleges is a little higher than that of the other local colleges, the students get double advantage when they enroll in foreign-affiliated institutions like Islington. He says, “We are giving a world class British degree here in Nepal and for that we have world class infrastructure and resources. Getting the same degree in Europe requires a lot of resources and is unmatched to what we give here.”</span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">Islington College runs BBA and other specialized courses like BIT- Bachelor in Multi-media, Computing, Networking and IT Security. The college produces 300 plus graduates a year. Regmi adds, “Education is an investment. Now the students have to start building a career right after the Bachelor level unlike till the recent past when one would not bother about a career before completing the Master level. Therefore, they have to invest more to learn earlier and faster. And it’s not only money that they are expected to invest in their education; they need to invest time and planned efforts as well.”<br />
	<br />
	<br />
	<img alt="featured" border="1" height="1002" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/foregin.jpg" vspace="10" width="500" /></span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">The demand for higher level education is growing in Nepal is apparent in the statistics on the students’ number in Nepal. More than 300,000 students appear in the SLC exam every year, and about half of them pass it. Around 100,000 pass the +2 level every year. However, the number of educational institutes providing higher level studies is insufficient to accommodate them all. According to Nepal Education in Figures 2012, there are 9 universities and 3383 higher secondary schools - 2,499 public and 884 private schools. Similarly, there are 1,102 colleges of the universities including 90 public and 1,012 private colleges, 3 medical institutions and 418 Technical Education and Vocational Training (TEVT) institutions. At the existing universities, which offer education up to the PhD level, faculties like humanities, management, education, science and technology and engineering are popular among the students. The international institutions operating in Nepal have included varieties of courses in these fields in addition to other international courses.<br />
	<br />
	<br />
	<img alt="coverstory" border="1" height="169" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/coverstory12.jpg" vspace="10" width="292" /></span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">The education ministry says, while granting permission to students to go abroad or to foreign institutions to open their affiliated institutions here, it gives priority to the subjects which are rare at the Nepali educational institutes. There are different courses for the students to choose from in the fields of management, Information Technology, Hospitality, Science, Computer Science and Fashion Designing. Some of the colleges also run specialized courses. For example, Kathmandu Forestry College runs M.Sc.in Geo- Information; International School of Tourism and Hotel Management runs Master of Innovation and Management in Tourism. Similarly, such institutions are running courses as per the need of time and market. As there is a high demand particularly in the field of management, many of these colleges are running BBA or MBA classes. Human biology is the latest course that is popular among the students.<br />
	<br />
	<br />
	<img alt="coverstory" border="1" height="439" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/coverstory1.jpg" vspace="10" width="450" /></span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">Dr Dev Raj Adhikari, Dean of Central Department of Management, Tribhuvan University (he is also a member of the Expert Committee formed under the Ministry of Education for the monitoring and evaluation of foreign universities), feels the need for welcoming good foreign universities since the trend of global education has already started. According to him, as we have entered into the WTO regime, it is not appropriate to restrict foreign universities from coming to Nepal. He says, “The presence of top quality universities in Nepal will encourage Nepali universities to raise their standards and be on a par with their foreign counterparts. It will also motivate Nepali colleges to increase the quality of their education in order to compete and sustain in the market.”</span></span></p>
<p class="MsoNormal" style="text-align: justify;">
	<strong><span style="font-size:14px;">&nbsp;</span></strong></p>
<p class="Pa15" style="margin-top: 5pt; text-align: justify;">
	<strong><span style="font-size:14px;"><span style="color: black;">Growing popularity</span></span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">The institutions are running international courses particularly because of the demand driven market. According to Biplav Singh, Senior Programme Manager at King’s College, the trend of enrolling in foreign institutions is increasing fast. King’s College which started BBA classes in 2009 has produced 12 MBA graduates and the number of intake this year is 66. Similarly, Lord Buddha Education Foundation which started MBA classes in 2000 has produced around 400 MBA graduates. Dr Tulasi Thapaliya, Under Secretary at the Ministry of Education, says these institutions are fulfilling the demand of those students who are opting for internationally recognized courses. He says, “Colleges are coming to us for the approval of a range of subjects. The colleges also see huge prospects in these courses. That is why they are investing huge amounts to establish their institutions.”</span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">High chances of job placement after the completion of the courses are also luring the students. Timely completion of the courses and possibility of credit transfer to a college abroad are the other attractions. Many colleges are providing skill development trainings beyond their academic courses to enable the students to compete in the international market. King’s College runs an MBA entrepreneurship course for those who are running their own business or planning to start a business on their own. Singh says, “We are working intensively for the placement of our graduates in the job market. We have already started Chinese language classes and a 2-year compulsory English class for MBA students.” Similarly, Islington College organizes job fairs where they call the prospective employers and the chances of students getting jobs are high. Regmi says, “Co-operation from the government and job providers is increasing. Currently we have tie-ups with many national and multinational companies for student placement and internship programmes. Some of our students are earning more than Rs 200,000 per month.”<br />
	<br />
	<br />
	<br />
	<img alt="coverstory" border="1" height="216" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/coverstroy13.jpg" vspace="10" width="193" /></span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">Started in 2004, International School of Tourism and Hotel Management basically produces hotel management graduates, Many of its students are working at the assistant or even executive level positions in many five star hotels in Nepal and abroad, according to Samjana Basnyat, Principal of the College. She says, “We focus on shaping the overall personality of the students because inculcating positive attitude is a must in today’s competitive age. This positive attitude does make an individual far more superior than others.” The college has a high number of students in Higher Diploma in Hotel Management (Equivalent to Bachelors Degree) course.</span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">Many of these colleges are providing full time faculty support which helps students learn beyond their curriculum. The resource centers of these colleges like libraries, computer-labs, science-labs etc are also available full time. Some colleges are offering customized curricula to suit the needs and demand of the Nepali market. Courses like Diploma in Hotel and Restaurant Management, Bachelor in Hotel and Catering Management, Diploma in Travel and Tourism Management etc are being provided by these institutions as the tourism sector is seeing a shortage of qualified manpower. On the other hand, some courses are more advanced than that of Nepali universities, especially the courses offered by the British and American universities. However, the curriculum is not everything about the offered courses, say the experts. Adhikari says, “The quality of faculty and teaching- learning methodology plays a crucial role in setting the quality of the offered degrees. The quality of graduates is equally dependent on the quality of faculty members and the quality of pedagogy practiced.”</span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><strong>&nbsp;<img alt="coverstory 2012" border="1" height="284" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/coverstroy14.jpg" vspace="10" width="260" /></strong></span></p>
<p style="text-align: justify;">
	 </p>
<p class="MsoNormal" style="text-align: justify;">
	<strong><span style="font-size:14px;"><span style="color: black;">Weak monitoring<br />
	</span>&nbsp; <br />
	</span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">The growing demand has led to some unethical practices too. Some colleges are found admitting students beyond their capacities and running courses without any government approval. In September 2012, some 72 colleges across the country including some foreign institutes were found running management, IT and natural science courses without approval from the MoE. Among them, many were reputed foreign institutes and renowned colleges. San Institute of Nursing, the first institute to get foreign affiliation, lost its good reputation when the college could not run smoothly. The college established in 2060 BS (some nine years ago) closed down soon after producing its first batch. According to Basnyat, the failure of the international educational institutes in maintaining academic discipline is becoming a threat for the education sector. She says, “The international educational institutes in Nepal should emphasize on quality education. Failure to maintain academic discipline and merely going for quantity will take us nowhere.”</span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">The government publishes the list of colleges affiliated to foreign institutions after providing affiliations and permission for operating in Nepal. Dr Tulasi Thapaliya, says, “It is high time that we started regulating these international institutions so that they could offer quality education in Nepal.” Many of the parents and students are unaware of the fact that if the institution has not got its courses or curriculum approved from the government, the institution or the course becomes invalid and the students will not get the degree. Without government authorization, the degrees are not recognized. By law, the institutions need government permission before adding courses or branches. However, there are many instances of the colleges not following the rules. Some of the colleges have been found to collect fees from the students or publish advertisements without any assurance that the classes will actually start. Likewise, many of these colleges are offering courses that are beyond their capacity and without permission from the authorities while some are busy in promotions rather than providing quality education.</span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">The ‘Directive for Foreign Educational Institutions Running Higher Level Education, 2059’ has laid down the requirements and procedures needed to be followed to run such colleges. There are provisions laid down in the directive to apply for opening an institution, getting foreign affiliation and adding courses and programmes. The directive has also set down the rules for human resource requirement in the institution, credibility of the university concerned and the relevance of the courses offered in Nepal. However, it is a different matter that MoE has not been able to handle these issues properly.<br />
	<br />
	<br />
	<img alt="cover story january 2012" border="1" height="324" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/glacier15.jpg" vspace="10" width="284" /></span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">Foreign educational institutions that want to operate in Nepal must be accredited by the law of the country of origin, according to the existing Nepali law. The institutes cannot close down its operation before the end of the academic year. They should be purely educational institutions and should follow the directives of 2059 BS. There are norms for all educational institutes. For example, there are separate specific norms set for GCE A Level, Engineering B.E. &amp; IT, Nursing and Hotel Management. There is a committee at the Ministry of Education (MoE) to scrutinize the quality of the international degrees offered in Nepal and the foreign universities that the Nepali colleges are affiliated to. But the committee has not been able to carry out its responsibilities, say the critics. They also point out that many of the colleges are violating the norms. Moreover, they also complain that there is no law to penalize such colleges operating without the government’s approval. The existing Education Act 1971 lacks clear provisions to check such lawbreakers. A bill to amend the Act awaits the parliament’s go-ahead.</span> <br />
	</span></p>
<p style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">Although the international courses have good credibility in the international market, freedom to choose and decide the curriculum by colleges themselves may invite negative consequences, say the experts. They further add that it is necessary to carefully inspect and monitor the standard and quality of pedagogy and courses introduced here. There is an academic council at TU that develops the courses to be run by Nepali colleges. The council also helps to implement the courses developed by foreign universities in Nepal. Dr Shrestha says, “We have also kept in mind the need for course revision at every department. Such courses should also meet national and international market demand.” <br />
	</span></span><span style="font-size:14px;"> </span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">There are many foreign-affiliated colleges in Nepal that are having administrative problems. “Many colleges are in the reviewing process due to the lack of documents. And many of them have been suspended for their failure to prove credibility,” says an officer at MoE, requesting anonymity. According to him, weak monitoring and regulation has helped these colleges to run without proper documentation, infrastructure, capacity, credibility and meeting other required criteria. There is no clear policy on the number of faculties and programmes a colleges can run. The MoE officer adds,” We are reviewing all these colleges for their exact status.” On the other hand, the institutions say that the red tapism in the Nepali bureaucracy is the main problem in timely the updating of their statuses.<br />
	<br />
	<br />
	<img alt="coverstory" border="1" height="198" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/hospital.jpg" vspace="10" width="182" /></span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">A lot of problems are seen in the tuition fees that these institutions raise. There are different fee structures for different faculties. The fees also vary from college to college. Many of these colleges have not properly mentioned how much fee is collected from each student. However, according to Roj Nath Pandey, Assistance Spokesperson for the MoE, there are no written complaints against these institutions for taking high tuition fees. He says, “We would instantly take action if any complaint is lodged in this regard. They cannot take fees more than what they have mentioned in their applications seeking our approval for the course.”&nbsp;&nbsp;</span></span></p>
<p class="MsoNormal" style="text-align: justify;">
	<strong><span style="font-size:14px;"><span style="color: black;">The way forward</span></span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">Many of these colleges have just started their sessions and the results are yet to come. Yet, it should be recognized that these emerging affiliates of international institutions have raised the hope of developing Nepal as an international education hub. “If we carry forward the mission to fulfill this dream, it is possible to make Nepal an educational hub,” opines Dr Shrestha. According to him, the basic infrastructure to develop Nepal as an education hub must be there and the academic calendar should be updated. He says, “Activities like padlocking and protests at TU are a huge setback to this mission. The resources within the universities should be well managed first to start the mission of developing the country into an international education hub. Also, a timely change in the curriculum is a must.”</span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">International affiliations have also opened the door to the international training institutes. Linked with The London Chamber of Commerce and Industry (LCCI), LCCI Nepal has been working with around 15 colleges, mostly with foreign affiliation. “Ours is a new initiative. We work in the Nepali education sector as an outsourced knowledge provider. Our training enables students to gain knowledge beyond the course. They can work in whichever country they go because they are trained professionally,” shares Dikshanta Bhatta, Assistant Manager at LCCI Nepal. He adds, “Our programmes are so popular that we are now targeting also the colleges that are affiliated to Nepali universities.”</span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">The college operators are also hopeful of a bright future in Nepal. They believe that if they focus on providing quality education to the Nepali students and offer a moderate fee structure, they will be able to get enough number of students. Regmi says, “Nepal is a strategically located country. It has good links to various countries including neighbouring India, China, Pakistan and Bangladesh. Technical subjects such as IT have good prospects.” He demands policies facilitating the global system which he says is a basic requirement of the global market. Regmi says, “We are in an open market and have a dynamic future. We could work better than this if we had more friendly policies.”</span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">The MoE, on the other hand, is planning to intensify the monitoring process this year. Dr Thapaliya Says, “Now we are taking action against some of the colleges which are found admitting more students than they can effectively handle. We are also reviewing the performances of these colleges.” The Supreme Court has also recently issued an 11-point order seeking to regulate the freewheeling private schools and colleges including the foreign institutions in response to a writ filed by advocates. This verdict will have a strong impact on the colleges which are not performing well.</span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="line-height: 115%; color: black;">Some of the institutions are also conducting monitoring and evaluation by themselves for quality assurance. However, the bad image of some colleges is casting a shadow on the good private colleges operating in Nepal under affiliation from foreign universities. The colleges, too, are afraid that the wrong deeds of a few colleges might ruin all of them. Basnyat shares, “Our plan is to keep upgrading ourselves in terms of infrastructure, quality education etc and provide the necessary facilities to the students as well as increase collaboration with the international players and get affiliations from different hospitality outlets so that our graduates could get multiple avenues.”</span></span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="line-height: 115%; color: black;">&nbsp;</span></span></p>
<p class="MsoNormal" style="text-align: justify;">
	<strong><span style="font-size:14px;"><span class="A3">‘There is a need to regulate and maintain foreign colleges to </span><span class="A3">prevent unfair </span><span class="A3"><span style="line-height: 115%; font-family: ">Competition’</span></span></span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<strong><span style="font-size:14px;"><span class="A3"><span style="line-height: 115%; font-family: "><br />
	&nbsp;<img alt="tulsi" border="1" height="307" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/tulsi.jpg" vspace="10" width="269" /></span></span></span></strong></p>
<address>
	<span style="font-size:12px;"><strong><span style="color: black;">DR TULASI THAPALIYA </span></strong></span></address>
<address>
	<span style="font-size:12px;"><strong><span class="A0" style="">Under Secretary </span></strong></span></address>
<address>
	<span style="font-size:12px;"><strong><span class="A0" style=""><span style="line-height: 115%;">Ministry of Education</span></span></strong></span></address>
<p class="MsoNormal" style="text-align: justify;">
	<strong style="font-size: 14px;"><span style="color: black;">How did the trend of establishing colleges with international affiliations begin in Nepal?</span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">Globalization of education compelled many countries to run academic programmes which are popular internationally. The charm of studying foreign courses in one’s own country and getting a certificate recognized globally at the end is high in any country. It looks so normal today that it has become something of a trend. Nepal, too, could not remain unaffected from this charm as more and more colleges in Asia started introducing international courses through affiliations with foreign colleges/universities. Nepal took its cue from this international trend.</span><br />
	<br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><strong><span style="color: black;">What has been the contribution of these foreign affiliated colleges? Has the Ministry made any evaluation?</span>&nbsp; </strong><br />
	</span></p>
<p class="Pa10" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">The Ministry is yet to carry out any evaluation of that sort. However, there are some good aspects that these colleges have brought about. For example, the students in Nepal have exposure to international curricula. They don’t need to go abroad for the foreign courses which are already available in Nepal, thanks to these foreign-affiliated colleges. Another advantage is that they get choices in the curriculum. And the most important thing is that the institutions providing higher education in Nepal can learn from the experiences of these foreign-affiliated colleges.</span></span></p>
<p class="MsoNormal" style="text-align: justify;">
	<strong><span style="font-size:14px;"><span style="color: black;"><br />
	</span></span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<strong><span style="font-size:14px;"><span style="color: black;">How does the MoE monitor the foreign-affiliated colleges?</span></span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">We have a monitoring mechanism. There is a committee at the MOE to monitor these institutions. We are planning to intensify the monitoring process this year. The monitoring process will be more regular in the days to come.</span><br />
	<br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><strong><span style="color: black;">What are the criteria for permitting colleges to get foreign affiliations?</span> <br />
	</strong></span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">Colleges in Nepal are running international courses because of the market demand. If there were no students demanding these courses, then these institutions would not come to us to get these courses approved by the ministry. The MoE gives the approval for these courses but this approval is subject to consent from the University Grant Commission.</span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">There are a number of criteria for getting foreign affiliations for Colleges. The process begins with the institutions wishing to run the academic programmes of international universities applying to the MoE. Their applications must include the consent of the University Grant Commission and other professional bodies. Then we observe the overall status of the applying colleges. We have a scrutiny mechanism to see whether the college is really in a position to offer the intended courses or not. We look at their physical facilities, infrastructure, human resource, credibility and validity of the international institutions offering affiliations.</span> <br />
	</span></p>
<p style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">Sometimes, the foreign institutions offering affiliations to Nepali institutions may not have much credibility back in their own countries. We also consider the demand of the said courses in Nepal. Particularly, we encourage those courses that are not offered by the Nepali universities. These are some of the conditions and criteria that we follow. There is a guideline already approved by the cabinet that the criteria in detail. </span><br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><strong><span style="color: black;">There are a range of subjects from management and hospitality to information technology to culinary arts. But many of the foreign-affiliated colleges are running BBA or MBA classes. Why?</span> <br />
	</strong></span></p>
<p style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">It is not about the BBA or MBA classes; it is about the demand of the students. However, there are two different ways of regulating and managing educational programmes. One, you could run trial courses to see what courses are in demand. The other option is the colleges come forward with proposals seeking approval for the courses they want to teach. The main idea is the demand for the subject by the students. If the demand rises, these subjects could be offered by many colleges. Yesterday only, I got a proposal for running micro-biology classes by one of the colleges. Many colleges are planning to run different management courses. </span></span><span style="font-size:14px;"> </span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa23" style="margin-top: 5pt; text-align: justify;">
	<span style="font-size:14px;"><strong><span style="color: black;">It is often complained that foreign affiliations are hampering the higher education system in Nepal. What do you have to say? </span></strong></span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">There are two sides to this complaint. One is because of the rise in the number of foreign affiliated colleges, many students are choosing them instead of colleges that teach courses of Nepali universities. This could be affecting the education system of Nepal.</span> <br />
	</span></p>
<p class="Pa23" style="margin-top: 5pt; text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">The other side is a positive one. The existing colleges and universities in Nepal get the chance to learn from the foreign-affiliated colleges and their new courses. Foreign-affiliated colleges can create an environment of completion where the colleges teaching courses of Nepali varsities, too, can become innovative in their courses and/ or curricula. Of course, there is a need to regulate these institutions properly to prevent unfair competition.<br />
	<br />
	<br />
	</span><strong><span style="color: black;"> </span></strong></span></p>
<p class="Pa23" style="margin-top: 5pt; text-align: justify;">
	<span style="font-size:14px;"><strong><span style="color: black;">It is said that the trend to go abroad for studies among Nepali students would have been low had there been foreign-affiliated colleges in Nepal in the past, say as back as a decade or so? What do you think?</span></strong></span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">It could have, perhaps, but I am not sure. It’s not only for the reason of education that the Nepali students go for abroad studies; there are other reasons as well. For example, they go abroad to earn while they learn. They might even want to learn beyond the courses they are enrolled to. Students even go to different countries to learn the same courses; they pick the country of their choice. International exposure and other opportunities are other important factors behind the current trend of going for abroad studies.</span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="line-height: 115%; color: black;">So, the presence of foreign-affiliated colleges in Nepal may not lower the abroad study graph very drastically. It could, however, contribute to some extent in lowering the number of students going abroad for studies. But it cannot completely stop the trend.</span></span></p>
<p class="MsoNormal" style="text-align: justify;">
	 </p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:16px;"><span style="line-height: 115%; color: black;">&nbsp;</span></span><strong style="font-size: 16px;"><span class="A3">‘Timely revision of <span style="line-height: 115%; font-family: ">curriculum is a must’</span></span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span class="A3"><span style="line-height: 115%; font-family: "><img alt="keshav" border="1" height="305" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/keshavkumar.jpg" vspace="10" width="300" /><br />
	</span></span></span></p>
<address>
	<span style="font-size:14px;"><strong><span style="color: black;">DR KESHAV KUMAR SHRESTHA </span></strong></span></address>
<address>
	<span style="font-size:14px;"><strong><span class="A0">Executive Director </span></strong></span></address>
<address>
	<span style="font-size:14px;"><strong><span class="A0"><span style="line-height: 115%; font-family: ">Curriculum Development Centre (CDC), TU</span></span></strong></span></address>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><strong><span class="A0"><span style="line-height: 115%; font-family: ">&nbsp;</span></span></strong></span></p>
<p class="MsoNormal" style="text-align: justify;">
	<strong style="font-size: 14px;"><span style="color: black;">Why do Nepali colleges need affiliations with foreign universities?</span></strong></p>
<p style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">Nepali colleges have joined the trend of getting affiliated to foreign universities lately. The foreign courses taught by these colleges have helped the Nepali students in broadening their knowledge and getting, perhaps, more practical education. Today, the world has become a global village; everything is globalised, including education. Colleges in one country get affiliated with foreign universities in order to teach foreign courses. This trend has helped the Nepali students in more than one way. </span><br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa23" style="margin-top: 5pt; text-align: justify;">
	<strong><span style="font-size:14px;"><span style="color: black;">Why doesn’t the CDC develop such courses on its own? </span></span></strong></p>
<p style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">Tribhuvan University has its own way and process of developing curricula. CDC develops courses on the basis of their need. For example, if there is a four-year course, we discuss its merits and demerits in depth. With the teamwork of ‘subject committees’, CDC not only develops curricula but also conducts seminars, orientation programmes and workshops to help the teaching and learning of foreign courses in the country. We are also careful about updating and even revising the TU courses from time to time. There is an Academic Council at TU that oversees the course developing process. Such courses should also meet national and international market interests. I think TU needs to implement the credit hours requirement system for its courses too. </span><br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><strong><span style="color: black;">Are the foreign courses beneficial for the Nepali students in the long run?</span></strong> <br />
	</span></p>
<p class="Pa10" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">There are professional as well as academic benefits for the Nepali students from the foreign courses. These courses also ensure better career opportunities and future for the students. </span></span></p>
<p style="text-align: justify;">
	<strong><span style="font-size:14px;"><span style="color: black;"><br />
	What are the possibilities of developing Nepal into an educational hub?</span></span><br />
	</strong></p>
<p class="Pa10" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">This is a broad topic to discuss. First, we need the basic infrastructure to develop Nepal as an education hub. The academic calendar should be updated and other new changes should be introduced. Recent activities like padlocking and protests happening at TU are a huge setback to such a m mission. Before Nepal can be developed into an international education hub, we should be able to manage the resources within the Nepali universities well. And, I repeat, timely changes in the curricula are a must. </span></span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;">&nbsp;</span></p>
<p style="text-align: justify;">
	<span style="font-size:14px;"><strong><span style="color: black;">How is CDC supporting the students’ educational freedom to take courses of their choice?</span></strong> </span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">We definitely pay attention to the interests of the students by keeping ourselves abreast with the market demand. The basic thing here is to enhance the quality of education. The students are given utmost freedom to choose from the available courses. TU has eight-semester BBA and four-semester MBA courses. Along with the freedom, the students should not forget the competition in the market and the credibility of the available courses.</span></span></p>
<p class="MsoNormal" style="text-align: justify;">
	<strong><span style="font-size:14px;">&nbsp;</span></strong></p>
<p class="Pa23" style="margin-top: 5pt; text-align: justify;">
	<strong><span style="font-size:14px;"><span style="color: black;">What changes in TU courses is CDC bringing in the coming days?</span></span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">A change may not always mean an immediate broad adjustment. We change existing courses or introduce new ones by analyzing the needs and demands in the market. For example, we have paid much attention to developing and bringing new courses in of Information Technology, Hotel Management, BBA and others. There is a demand for these courses as they are more likely to give the students a secured career.</span> <br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<strong><span style="font-size:14px;">&nbsp;</span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<strong><span style="font-size:14px;"><span style="color: black;">There is a common complaint that the annual system hasn’t work well in the education sector. What is CDC doing to address this complaint?</span> <br />
	</span></strong></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="color: black;">The annual system focuses on mass education. However, it needs to be changed according to time. Recently, we have developed a new course, Tea Technology and Management (BSC Tea Technology), at Mechi Multiple Campus, Jhapa.</span> <br />
	</span></p>
<p style="text-align: justify;">
	<span style="font-size:14px;"><br />
	</span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><strong><span style="color: black;">Are the foreign courses more practical and skill-oriented?</span> <br />
	</strong></span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;"><span style="line-height: 115%; color: black;">The most important thing is that these courses have a good reputation in the market. However, it is also true that only a few percent of fresh graduates get good jobs in the market. So, it’s high time to ensure the production of quality and competitive manpower by domestic as well as foreign-affiliated colleges.</span></span></p>
<p class="MsoNormal" style="text-align: justify;">
	<span style="font-size:14px;">&nbsp;</span></p>
<p style="text-align: justify;">
<!--[if gte mso 9]><xml>
 <w:LatentStyles DefLockedState="false" DefUnhideWhenUsed="true"
  DefSemiHidden="true" DefQFormat="false" DefPriority="99"
  LatentStyleCount="267">
  <w:LsdException Locked="false" Priority="0" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Normal"/>
  <w:LsdException Locked="false" Priority="9" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="heading 1"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 2"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 3"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 4"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 5"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 6"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 7"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 8"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 9"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 1"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 2"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 3"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 4"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 5"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 6"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 7"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 8"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 9"/>
  <w:LsdException Locked="false" Priority="35" QFormat="true" Name="caption"/>
  <w:LsdException Locked="false" Priority="10" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Title"/>
  <w:LsdException Locked="false" Priority="1" Name="Default Paragraph Font"/>
  <w:LsdException Locked="false" UnhideWhenUsed="false" Name="Body Text"/>
  <w:LsdException Locked="false" Priority="11" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Subtitle"/>
  <w:LsdException Locked="false" Priority="22" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Strong"/>
  <w:LsdException Locked="false" Priority="20" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Emphasis"/>
  <w:LsdException Locked="false" Priority="59" SemiHidden="false"
   UnhideWhenUsed="false" Name="Table Grid"/>
  <w:LsdException Locked="false" UnhideWhenUsed="false" Name="Placeholder Text"/>
  <w:LsdException Locked="false" Priority="1" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="No Spacing"/>
  <w:LsdException Locked="false" Priority="60" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Shading"/>
  <w:LsdException Locked="false" Priority="61" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light List"/>
  <w:LsdException Locked="false" Priority="62" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Grid"/>
  <w:LsdException Locked="false" Priority="63" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 1"/>
  <w:LsdException Locked="false" Priority="64" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 2"/>
  <w:LsdException Locked="false" Priority="65" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 1"/>
  <w:LsdException Locked="false" Priority="66" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 2"/>
  <w:LsdException Locked="false" Priority="67" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 1"/>
  <w:LsdException Locked="false" Priority="68" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 2"/>
  <w:LsdException Locked="false" Priority="69" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 3"/>
  <w:LsdException Locked="false" Priority="70" SemiHidden="false"
   UnhideWhenUsed="false" Name="Dark List"/>
  <w:LsdException Locked="false" Priority="71" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Shading"/>
  <w:LsdException Locked="false" Priority="72" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful List"/>
  <w:LsdException Locked="false" Priority="73" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Grid"/>
  <w:LsdException Locked="false" Priority="60" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Shading Accent 1"/>
  <w:LsdException Locked="false" Priority="61" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light List Accent 1"/>
  <w:LsdException Locked="false" Priority="62" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Grid Accent 1"/>
  <w:LsdException Locked="false" Priority="63" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 1 Accent 1"/>
  <w:LsdException Locked="false" Priority="64" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 2 Accent 1"/>
  <w:LsdException Locked="false" Priority="65" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 1 Accent 1"/>
  <w:LsdException Locked="false" UnhideWhenUsed="false" Name="Revision"/>
  <w:LsdException Locked="false" Priority="34" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="List Paragraph"/>
  <w:LsdException Locked="false" Priority="29" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Quote"/>
  <w:LsdException Locked="false" Priority="30" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Intense Quote"/>
  <w:LsdException Locked="false" Priority="66" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 2 Accent 1"/>
  <w:LsdException Locked="false" Priority="67" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 1 Accent 1"/>
  <w:LsdException Locked="false" Priority="68" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 2 Accent 1"/>
  <w:LsdException Locked="false" Priority="69" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 3 Accent 1"/>
  <w:LsdException Locked="false" Priority="70" SemiHidden="false"
   UnhideWhenUsed="false" Name="Dark List Accent 1"/>
  <w:LsdException Locked="false" Priority="71" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Shading Accent 1"/>
  <w:LsdException Locked="false" Priority="72" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful List Accent 1"/>
  <w:LsdException Locked="false" Priority="73" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Grid Accent 1"/>
  <w:LsdException Locked="false" Priority="60" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Shading Accent 2"/>
  <w:LsdException Locked="false" Priority="61" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light List Accent 2"/>
  <w:LsdException Locked="false" Priority="62" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Grid Accent 2"/>
  <w:LsdException Locked="false" Priority="63" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 1 Accent 2"/>
  <w:LsdException Locked="false" Priority="64" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 2 Accent 2"/>
  <w:LsdException Locked="false" Priority="65" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 1 Accent 2"/>
  <w:LsdException Locked="false" Priority="66" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 2 Accent 2"/>
  <w:LsdException Locked="false" Priority="67" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 1 Accent 2"/>
  <w:LsdException Locked="false" Priority="68" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 2 Accent 2"/>
  <w:LsdException Locked="false" Priority="69" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 3 Accent 2"/>
  <w:LsdException Locked="false" Priority="70" SemiHidden="false"
   UnhideWhenUsed="false" Name="Dark List Accent 2"/>
  <w:LsdException Locked="false" Priority="71" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Shading Accent 2"/>
  <w:LsdException Locked="false" Priority="72" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful List Accent 2"/>
  <w:LsdException Locked="false" Priority="73" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Grid Accent 2"/>
  <w:LsdException Locked="false" Priority="60" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Shading Accent 3"/>
  <w:LsdException Locked="false" Priority="61" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light List Accent 3"/>
  <w:LsdException Locked="false" Priority="62" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Grid Accent 3"/>
  <w:LsdException Locked="false" Priority="63" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 1 Accent 3"/>
  <w:LsdException Locked="false" Priority="64" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 2 Accent 3"/>
  <w:LsdException Locked="false" Priority="65" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 1 Accent 3"/>
  <w:LsdException Locked="false" Priority="66" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 2 Accent 3"/>
  <w:LsdException Locked="false" Priority="67" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 1 Accent 3"/>
  <w:LsdException Locked="false" Priority="68" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 2 Accent 3"/>
  <w:LsdException Locked="false" Priority="69" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 3 Accent 3"/>
  <w:LsdException Locked="false" Priority="70" SemiHidden="false"
   UnhideWhenUsed="false" Name="Dark List Accent 3"/>
  <w:LsdException Locked="false" Priority="71" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Shading Accent 3"/>
  <w:LsdException Locked="false" Priority="72" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful List Accent 3"/>
  <w:LsdException Locked="false" Priority="73" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Grid Accent 3"/>
  <w:LsdException Locked="false" Priority="60" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Shading Accent 4"/>
  <w:LsdException Locked="false" Priority="61" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light List Accent 4"/>
  <w:LsdException Locked="false" Priority="62" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Grid Accent 4"/>
  <w:LsdException Locked="false" Priority="63" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 1 Accent 4"/>
  <w:LsdException Locked="false" Priority="64" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 2 Accent 4"/>
  <w:LsdException Locked="false" Priority="65" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 1 Accent 4"/>
  <w:LsdException Locked="false" Priority="66" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 2 Accent 4"/>
  <w:LsdException Locked="false" Priority="67" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 1 Accent 4"/>
  <w:LsdException Locked="false" Priority="68" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 2 Accent 4"/>
  <w:LsdException Locked="false" Priority="69" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 3 Accent 4"/>
  <w:LsdException Locked="false" Priority="70" SemiHidden="false"
   UnhideWhenUsed="false" Name="Dark List Accent 4"/>
  <w:LsdException Locked="false" Priority="71" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Shading Accent 4"/>
  <w:LsdException Locked="false" Priority="72" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful List Accent 4"/>
  <w:LsdException Locked="false" Priority="73" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Grid Accent 4"/>
  <w:LsdException Locked="false" Priority="60" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Shading Accent 5"/>
  <w:LsdException Locked="false" Priority="61" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light List Accent 5"/>
  <w:LsdException Locked="false" Priority="62" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Grid Accent 5"/>
  <w:LsdException Locked="false" Priority="63" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 1 Accent 5"/>
  <w:LsdException Locked="false" Priority="64" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 2 Accent 5"/>
  <w:LsdException Locked="false" Priority="65" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 1 Accent 5"/>
  <w:LsdException Locked="false" Priority="66" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 2 Accent 5"/>
  <w:LsdException Locked="false" Priority="67" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 1 Accent 5"/>
  <w:LsdException Locked="false" Priority="68" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 2 Accent 5"/>
  <w:LsdException Locked="false" Priority="69" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 3 Accent 5"/>
  <w:LsdException Locked="false" Priority="70" SemiHidden="false"
   UnhideWhenUsed="false" Name="Dark List Accent 5"/>
  <w:LsdException Locked="false" Priority="71" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Shading Accent 5"/>
  <w:LsdException Locked="false" Priority="72" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful List Accent 5"/>
  <w:LsdException Locked="false" Priority="73" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Grid Accent 5"/>
  <w:LsdException Locked="false" Priority="60" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Shading Accent 6"/>
  <w:LsdException Locked="false" Priority="61" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light List Accent 6"/>
  <w:LsdException Locked="false" Priority="62" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Grid Accent 6"/>
  <w:LsdException Locked="false" Priority="63" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 1 Accent 6"/>
  <w:LsdException Locked="false" Priority="64" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 2 Accent 6"/>
  <w:LsdException Locked="false" Priority="65" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 1 Accent 6"/>
  <w:LsdException Locked="false" Priority="66" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 2 Accent 6"/>
  <w:LsdException Locked="false" Priority="67" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 1 Accent 6"/>
  <w:LsdException Locked="false" Priority="68" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 2 Accent 6"/>
  <w:LsdException Locked="false" Priority="69" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 3 Accent 6"/>
  <w:LsdException Locked="false" Priority="70" SemiHidden="false"
   UnhideWhenUsed="false" Name="Dark List Accent 6"/>
  <w:LsdException Locked="false" Priority="71" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Shading Accent 6"/>
  <w:LsdException Locked="false" Priority="72" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful List Accent 6"/>
  <w:LsdException Locked="false" Priority="73" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Grid Accent 6"/>
  <w:LsdException Locked="false" Priority="19" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Subtle Emphasis"/>
  <w:LsdException Locked="false" Priority="21" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Intense Emphasis"/>
  <w:LsdException Locked="false" Priority="31" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Subtle Reference"/>
  <w:LsdException Locked="false" Priority="32" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Intense Reference"/>
  <w:LsdException Locked="false" Priority="33" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Book Title"/>
  <w:LsdException Locked="false" Priority="37" Name="Bibliography"/>
  <w:LsdException Locked="false" Priority="39" QFormat="true" Name="TOC Heading"/>
 </w:LatentStyles>
</xml><![endif]--><!--[if gte mso 10]>
<style>
 /* Style Definitions */
 table.MsoNormalTable
	{mso-style-name:"Table Normal";
	mso-tstyle-rowband-size:0;
	mso-tstyle-colband-size:0;
	mso-style-noshow:yes;
	mso-style-priority:99;
	mso-style-qformat:yes;
	mso-style-parent:"";
	mso-padding-alt:0in 5.4pt 0in 5.4pt;
	mso-para-margin-top:0in;
	mso-para-margin-right:0in;
	mso-para-margin-bottom:10.0pt;
	mso-para-margin-left:0in;
	line-height:115%;
	mso-pagination:widow-orphan;
	font-size:11.0pt;
	font-family:"Calibri","sans-serif";
	mso-ascii-font-family:Calibri;
	mso-ascii-theme-font:minor-latin;
	mso-hansi-font-family:Calibri;
	mso-hansi-theme-font:minor-latin;
	mso-bidi-font-family:"Times New Roman";
	mso-bidi-theme-font:minor-bidi;}
</style>
<![endif]-->	<span style="font-size:14px;"><br />
	</span></p>',
			'published' => true,
			'created' => '2013-02-07',
			'modified' => '2013-03-15',
			'keywords' => '',
			'description' => 'Gone are the days when students had no choice but to go abroad for foreign degrees, thanks to the increasing number of foreign educational institutions which are providing internationally recognized education in Nepal.',
			'sortorder' => '671',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 6 => array(
		'Article' => array(
			'id' => '774',
			'article_category_id' => '40',
			'title' => 'Learning : The Ropes December 2012',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
<!--[if gte mso 9]><xml>
 <w:WordDocument>
  <w:View>Normal</w:View>
  <w:Zoom>0</w:Zoom>
  <w:TrackMoves/>
  <w:TrackFormatting/>
  <w:PunctuationKerning/>
  <w:ValidateAgainstSchemas/>
  <w:SaveIfXMLInvalid>false</w:SaveIfXMLInvalid>
  <w:IgnoreMixedContent>false</w:IgnoreMixedContent>
  <w:AlwaysShowPlaceholderText>false</w:AlwaysShowPlaceholderText>
  <w:DoNotPromoteQF/>
  <w:LidThemeOther>EN-US</w:LidThemeOther>
  <w:LidThemeAsian>X-NONE</w:LidThemeAsian>
  <w:LidThemeComplexScript>X-NONE</w:LidThemeComplexScript>
  <w:Compatibility>
   <w:BreakWrappedTables/>
   <w:SnapToGridInCell/>
   <w:WrapTextWithPunct/>
   <w:UseAsianBreakRules/>
   <w:DontGrowAutofit/>
   <w:SplitPgBreakAndParaMark/>
   <w:DontVertAlignCellWithSp/>
   <w:DontBreakConstrainedForcedTables/>
   <w:DontVertAlignInTxbx/>
   <w:Word11KerningPairs/>
   <w:CachedColBalance/>
  </w:Compatibility>
  <w:BrowserLevel>MicrosoftInternetExplorer4</w:BrowserLevel>
  <m:mathPr>
   <m:mathFont m:val="Cambria Math"/>
   <m:brkBin m:val="before"/>
   <m:brkBinSub m:val="--"/>
   <m:smallFrac m:val="off"/>
   <m:dispDef/>
   <m:lMargin m:val="0"/>
   <m:rMargin m:val="0"/>
   <m:defJc m:val="centerGroup"/>
   <m:wrapIndent m:val="1440"/>
   <m:intLim m:val="subSup"/>
   <m:naryLim m:val="undOvr"/>
  </m:mathPr></w:WordDocument>
</xml><![endif]-->	<span style="font-size:12px;"><img alt="learningtheropes" border="1" height="181" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/rashesh.jpg" vspace="10" width="338" /><br />
	<br />
	<br />
	<img alt="telephone" border="1" height="165" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/camels.jpg" vspace="10" width="249" /><br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:12px;"><span color:="" myriad="" style="font-family: ">By Rashesh Vaidya</span></span></p>
<p class="MsoNormal">
	<span style="font-size:12px;"><span color:="" myriad="" style="font-family: ">&nbsp;</span></span></p>
<p class="Pa9">
	<strong><span style="font-size:12px;"><span style="color: black;">Camels and Eagles </span></span></strong></p>
<p class="MsoNormal">
	<strong><span style="font-size:12px;"><span class="A28"><span style="line-height: 115%; font-family: ">The rating system identifies the problematic banks which are in need of increased supervision.</span></span></span></strong></p>
<p class="MsoNormal">
	<strong><span style="font-size:12px;"><span class="A28"><span style="line-height: 115%; font-family: ">&nbsp;</span></span></span></strong></p>
<p class="Default">
	<span style="font-size:12px;"><span class="A4">A </span><span style="color: black;">commercial bank’s performance can be measured in terms of its ability to meet the expectations of its owners, employees, depositors and borrowers. A bank’s performance can be evaluated by analysing its financial reports- report of condition and report of income. The bank’s management has to protect the interests of all concerned parties - creditors, owners and others. They have to ensure minimum operating efficiency and keep the bank’s risks at a minimum level. Their survival depends upon their operating performance.</span> <br />
	</span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:12px;"><span style="color: black;">Commercial banks are the most regulated of all the institutions in the financial system because of the direct impact of their activities on the economy. Every commercial bank is regulated and governed by their regulator i.e. the Nepal Rastra Bank (NRB), the country’s central bank. The NRB inspects and supervises (on-site and off-site) the banks and financial institutions (BFIs) to ensure that the banks operate in a safe and sound manner. Sections 49(1) and 49(2) and 52(1) to 52(5) of the Bank and Financial Institution Act (BAFIA), 2006 and sections 76 to 88 of the Nepal Rastra Bank Act, 2006 have given full authority to the NRB to direct, supervise and inspect the BFIs it has issued licenses to.&nbsp;&nbsp; </span></span><span style="font-size:12px;"> <span style="color: black;"><br />
	</span></span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">For this purpose, the regulators have developed a uniform numerical rating system called CAMELS Rating, which is based on the financial statements of the banks and on-site examinations. The Bank Supervision Department of NRB can carry out on-site examination of commercial banks in Nepal by sending examination teams to the commercial banks. Onsite examination can be either corporate level covering all aspects of the functioning of the bank or can be a targeted branch-level inspection. On completion of the on-site –examination, examiners perform CAMELS rating of the bank. This rating is exclusively used for supervisory purpose and is not revealed to the general public.&nbsp;&nbsp; </span></span><span style="font-size:12px;"> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">The examiners or inspection team evaluates a bank’s health on the basis of the overall rating based on capital adequacy, assets quality, management quality, earning ability, liquidity position and sensitivity to market risks (systematic risks). The Federal Reserve Regulators in the USA developed the numerical CAMELS rating system in the early 1970s to help structure their bank examination process.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">The BFIs are categorised into different groups based on their overall strength, quality and operating soundness. The rating system identifies the problematic banks which are in need of increased supervision. In the CAMELS rating system, each bank is assigned two sets of ratings:</span><br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">&nbsp;&nbsp;&nbsp;&nbsp; 1.<span font-size-adjust:="" font-stretch:="" font-style:="" font-variant:="" font-weight:="" line-height:="" new="" style="font-family: " times=""> </span></span><span style="color: black;">Performance Ratings, which comprise six individual ratings that address each of the CAMELS components; and</span> <br />
	</span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:12px;"><span style="color: black;">&nbsp;&nbsp;&nbsp;&nbsp; 2. An overall Composite Rating, which is a single rating based on a comprehensive assessment of the bank’s overall condition.Both the&nbsp;&nbsp; ratings are scored on a numerical scale of 1 to 5 in the ascending order of supervisory concern where “1” represents the best rating and “5” the worst. </span></span></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:12px;"><span style="color: black;">Here is a description of the rating scores for each of the six components: </span></span></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span></p>
<p class="Pa7" style="text-align:justify">
	<strong><span style="font-size:12px;"><span style="color: black;">Rating 1 (A) indicates very strong performance </span></span></strong></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp;</span></strong></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">Rating 2 (B) indicates above-average performance that adequately provides for a safe and sound operation of the BFIs.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">Rating 3 (C) indicates performance that is flawed to some degree.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">Rating 4 (D) indicates unsatisfactory performance which, if left unchecked, could threaten the solvency of the BFIs.</span> <br />
	</span></p>
<p class="Pa7" style="text-align:justify">
	<span style="font-size:12px;"><span style="color: black;">Rating 5 (E) indicates very unsatisfactory performance and calls for immediate remedial attention for the survival of the BFIs. </span></span></p>
<p class="Default">
	<span style="font-size:12px;"><br />
	<span style="color: black;">The rating of banks can be further developed by giving a score to each component of the CAMELS, known as the Composite CAMELS Rating Score. The Composite CAMELS Rating can be calculated as:</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">Composite CAMELS Rating= C(0.25)+A(0.25)+M(0.25)+E(0.10)+ L(0.10)+S(0.05)</span> <br />
	</span></p>
<p>
	 </p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">Each of the above six parameters can be weighted on a scale of 1 to 100 and contains a number of sub-parameters with individual weightage. The banks should be rated on a five-point scale (A to E) based on the lines of the international CAMELS rating model.</span><br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;">&nbsp;</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">The CAMELS system evaluates banks on the following six parameters:</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1.<span font-size-adjust:="" font-stretch:="" font-style:="" font-variant:="" font-weight:="" line-height:="" new="" style="font-family: " times="">&nbsp;&nbsp; </span></span><span style="color: black;">Capital Adequacy: Capital adequacy has been the main pillar of existence of any bank. Banks have to maintain a proper mix of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; different types of capitals to avoid pressure on their dividend policies and inadequacy of total capital funds against the risk exposure. Capital adequacy is measured by the ratio of capital to risk-weighted assets (CRAR). A sound capital base strengthens the confidence of depositors.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">2. Asset Quality: One of the indicators for asset quality is the ratio of non-performing loans to total loans (Gross Non-Performing Assets - GNPA). The gross non-performing loans to gross advances ratio is more indicative of the quality of credit decisions made by bankers. A higher GNPA is indicative of poor credit decision-making.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">3. Management: The ratio of non-interest expenditures to total assets can be one of the measures to assess the working of the management. This variable, which includes a variety of expenses, such as payroll, workers’ compensation and training investment, reflects the management policy stance.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">4. Earnings: It can be measured as the return on asset ratio.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">5. Liquidity: The cash maintained by a bank and balances with the central bank to the total asset ratio is an indicator of the bank’s liquidity. In general, banks with a larger volume of liquid assets are perceived safe, since these assets would allow them to meet unexpected withdrawals.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">Section 38 of BAFIA, 2006 provides for maintaining a good liquidity position by the BFIs. Commercial banks are required to maintain CRR (cash reserve ratio) at 5 per cent of their total deposits. The NRB monitors the CRR weekly, and the liquidity profile on a quarterly basis.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">6. Sensitivity to Market Risks/Systems and Control: Risks associated with adverse movements in the exchange rates (including gold positions), interest rates, liquidity and investment in equity are covered under market risk management. A bank faces market risks either from its investments in government securities and bonds or from the exchange rate risk that persist in matching position. The market risk is managed by the banks’ Asset and Liability Committee (ALCO) which assesses policies and levels of risk appetite.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">However, the CAMELS approach has inherent indeterminacy and subjectivity. There can be instances when an examination of the accounting records cannot decide whether to give an average or below average score. The ‘good’ and ‘bad’ indicators are easy to spot, but the ‘in-betweens’ are not. This is a problem of indeterminacy. But when bank inspectors are forced to make a judgment, it leads to the second problem of subjectivity and hence these ratings could come up with differing levels of expectations and perspectives. Among the six variables, ‘M’ has been missing - the one which assesses the management quality and corporate governance. This has been a paradox because most of the failures of the banks are related with the quality and efficiency of their management. The problem arises while trying to quantify the management quality in the due course of analyzing and evaluating the performance of the BFIs. Thus, the central bank of Taiwan, has been using CARSEL instead of CAMELS to measure the management ability and sensitivity to market to fullfil the Regulatory Compliance and Stability criteria, respectively.</span><br />
	</span></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp;<img alt="camels" height="389" src="http://newbusinessage.com/ckfinder/userfiles/Images/camelsan.jpg" width="500" /></span></strong></p>
<p class="Default">
	<strong><span style="font-size:12px;">&nbsp;</span></strong></p>
<p class="Pa13" style="margin-top:5.0pt">
	<strong><span style="font-size:12px;"><span style="color: black;">About EAGLES</span></span></strong></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">The EAGLES system is able to measure and compare banks’ performance in a more determinate, objective and consistent manner. The name is derived from the key success factors confronting banks today, i.e. Earning ability, Asset quality, Growth, Liquidity, Equity and Strategy. This approach has been pioneered and has gained credibility among the banking community and fund management industry in Asia, for competition analysis and investment planning, respectively. The authenticity and popularity of EAGLES increased after it was able to predict the Asian financial crisis of the 1980s.</span> <br />
	</span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:12px;"><span style="color: black;">The effective management of a bank strategy is indicated by the Strategic Response Quotient (SRQ). It is an intriguing ratio because it assesses the management’s ability to lend, garner deposits, generate fee-based income and manage the operating cost. An appropriate balance of the three core banking activities will depend on the bank’s strategy. The SRQ is obtained by dividing the interest margin by net operating cost (that is, the total operating cost minus fee income). The higher figure the better combined with excellent risk controls. <br />
	<br />
	<br />
	<img alt="eagles" border="1" height="560" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/camesl.jpg" vspace="10" width="429" /><br />
	</span></span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">EAGLES evaluates banks on the following six parameters:</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">1.<span font-size-adjust:="" font-stretch:="" font-style:="" font-variant:="" font-weight:="" line-height:="" new="" style="font-family: " times="">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span><span style="color: black;">Earning Ability: Earning ability is shown by three noteworthy indicators – Return on Assets (ROA), Return on Shareholders’ Fund (ROSF) and Income/Overheads Ratio (IOR). The importance of IOR is usually not well understood. The main point lies in that income depends on external market forces, while overheads is highly influenced by internal staffing. So, the bank must know how to adjust the staffing according to the market demand for its products and services.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">This is shown by three indicators - ROA, Return on Net worth (RONW) and IOR. Usually, the importance of IOR is that income depends on external market forces, while overheads is highly influenced by internal staffing. So, the bank must know how to adjust the staffing according to the market demand for its products and services.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">2. Asset Quality: Asset quality is best assessed by on-site inspection of the bank’s loan portfolio. If this is not possible, asset quality can be measured by the level of bad debt provisions, that is, bad and doubtful debts (BDD) as a percentage of total loans. A conservative approach will dictate that the quantum of provision to err on the high side is rather low.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">This is best judged by the level of bad debt provisions, that is, bad and doubtful debts as a percentage of total loans. A conservative approach will dictate that the quantum of provision is on the high side is rather low.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">3. Growth: Growth rates of loans and core deposits are the most important indicators of how a bank wants to position itself in the market. A high growth loan book without a corresponding growth in the deposit base signifies an intention to increase interest margins. A higher deposit growth without a corresponding growth in loans means that the bank is suffering from low interest margins. For some banks, lower interest margins could hamper their overall profitability.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">Growth rates of loans and core deposits are the most important indicators of how a bank wants to position itself in the market. A high growth loan book without a corresponding growth in the deposit base signifies an intention to increase interest margins. A higher deposit growth without a corresponding growth in loans means that the bank suffers from low interest margins.<br />
	<br />
	<br />
	<br />
	<img alt="composite" border="1" height="524" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/composite.jpg" vspace="10" width="500" /></span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">4. Liquidity: Liquidity can be described as the ability of a bank to have sufficient funds to meet cash demands for loans, deposit withdrawals and operating expenses. For this reason, a balance should be made between the amount of deposits garnered and the quantum of loans extended. The indicator is the deposit-to-loan ratio or credit-deposit ratio (CD Ratio). It is important for a bank, therefore, to maintain a balance between the amounts of deposits garnered and the quantum of loans extended. Also, investment to deposit ratio is used as an efficient indicator of liquidity.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">5. Equity: Equity level and capital adequacy have a profound impact on the bank. There is an international guideline (Basel II) that stipulates a bank must have a minimum capital equivalent to 8 per cent of the risk adjusted assets. Even the central bank of Nepal, the NRB, has mentioned a comfort zone of 6 and 10 per cent of core capital and total capital funds, respectively, based on the risk-weight assets (percent). Many banks are restricted to open additional branches unless they meet the minimum capital requirements.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">Similarly, sections 31(1) and (2) of BAFIA, 2006 have also categorized the financial institutions into four classes, namely: A, B, C and D based on their minimum capital requirements. And sections 42(1) to 42(5) have clearly explained the provision of capital adequacy for the BFIs in Nepal.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">6. Strategy: The effective management of a bank’s strategy is indicated by the strategic response quotient (SRQ). It assesses the management’s ability to lend, garner deposits, generate fee based income and manage the operating cost. As to what is an appropriate balance of the three core banking activities depends on the bank’s strategy. The SRQ is obtained by dividing the interest margin by net operating cost (that is, total operating cost minus fee income). The higher figure the better combined with excellent risk controls.</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">Each of the six parameters is divided into sub-parameters for effective evaluation. The EAGLES rating, unlike CAMELS, is based purely on arithmetical ratios and hence does not involve grades or ratings. Thus, there is no subjectivity involved in EAGLES and banks are judges purely on the ratio outputs and ranked highest to lowest based on these parameters. Each bank is ranked highest to lowest on each of the sub-parameters. The bank with higher ranks on more sub-parameters will be ranked the highest in that particular parameter. Accumulating all the parameters, the bank that gets the highest rank on more parameters stands on the top of the list.</span><br />
	<br />
	<img alt="camsel" border="1" height="560" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/camesl(1).jpg" vspace="10" width="429" /><br />
	</span></p>
<p class="Default">
	<strong><span style="font-size:12px;"><span style="color: black;">About MACRO</span> <br />
	</span></strong></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">MACRO is a rating system formerly used by examiners to evaluate the safety and soundness of savings institutions. MACRO is an acronym for the five elements that were evaluated: Management, Assets quality, Capital adequacy, Risk management and Operating results. Based on the examiner’s evaluation, each element would be rated on a scale of 1 to 5, and the institution would be assigned an overall MACRO rating of 1 to 5. The indications of MACRO rating were:</span> <br />
	</span></p>
<p class="Default">
	<span style="font-size:12px;"><span style="color: black;">The MACRO Rating System was used by the Federal Thrift Examiners from (exact date) 1984 to August 15, 1994, before it was replaced by the CAMELS Rating System.</span><br />
	<br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:12px;"><b style="mso-bidi-font-weight:normal"><span style="line-height: 115%; color: black;">Vaidya is a Researcher associated with New Business Age (P) Ltd. He can be contacted at rashesh_vaidya@hotmail.com</span></b> <br />
	</span></p>',
			'published' => true,
			'created' => '2013-01-22',
			'modified' => '2013-01-22',
			'keywords' => '',
			'description' => 'A commercial bank’s performance can be measured in terms of its ability to meet the expectations of its owners, employees, depositors and borrowers. A bank’s performance can be evaluated by analysing its financial reports- report of condition and report of income. The bank’s management has to protect the interests of all concerned parties - creditors, owners and others. They have to ensure minimum operating efficiency and keep the bank’s risks at a minimum level. Their survival depends upon their operating performance.',
			'sortorder' => '664',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 7 => array(
		'Article' => array(
			'id' => '768',
			'article_category_id' => '40',
			'title' => 'Cover Story December 2012',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	 </p>
<p>
<!--[if gte mso 9]><xml>
 <w:WordDocument>
  <w:View>Normal</w:View>
  <w:Zoom>0</w:Zoom>
  <w:TrackMoves/>
  <w:TrackFormatting/>
  <w:PunctuationKerning/>
  <w:ValidateAgainstSchemas/>
  <w:SaveIfXMLInvalid>false</w:SaveIfXMLInvalid>
  <w:IgnoreMixedContent>false</w:IgnoreMixedContent>
  <w:AlwaysShowPlaceholderText>false</w:AlwaysShowPlaceholderText>
  <w:DoNotPromoteQF/>
  <w:LidThemeOther>EN-US</w:LidThemeOther>
  <w:LidThemeAsian>X-NONE</w:LidThemeAsian>
  <w:LidThemeComplexScript>X-NONE</w:LidThemeComplexScript>
  <w:Compatibility>
   <w:BreakWrappedTables/>
   <w:SnapToGridInCell/>
   <w:WrapTextWithPunct/>
   <w:UseAsianBreakRules/>
   <w:DontGrowAutofit/>
   <w:SplitPgBreakAndParaMark/>
   <w:DontVertAlignCellWithSp/>
   <w:DontBreakConstrainedForcedTables/>
   <w:DontVertAlignInTxbx/>
   <w:Word11KerningPairs/>
   <w:CachedColBalance/>
  </w:Compatibility>
  <w:BrowserLevel>MicrosoftInternetExplorer4</w:BrowserLevel>
  <m:mathPr>
   <m:mathFont m:val="Cambria Math"/>
   <m:brkBin m:val="before"/>
   <m:brkBinSub m:val="--"/>
   <m:smallFrac m:val="off"/>
   <m:dispDef/>
   <m:lMargin m:val="0"/>
   <m:rMargin m:val="0"/>
   <m:defJc m:val="centerGroup"/>
   <m:wrapIndent m:val="1440"/>
   <m:intLim m:val="subSup"/>
   <m:naryLim m:val="undOvr"/>
  </m:mathPr></w:WordDocument>
</xml><![endif]--></p>
<p>
	<strong><span style="font-size:14px;"><span class="A13">By Gaurav Aryal (With inputs from Rashesh Vaidya, Sushila Budhathoki, Abha Dhital and Bivek Dhakal)</span></span><span style="font-size:14px;"> </span></strong></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;</span></span></strong></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span style="line-height: 115%; color: rgb(22, 144, 186);">Nepali Economy</span></span></strong></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">Before and After Maoist Insurgency</span></span></strong></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;<br />
	<img alt="" border="1" height="240" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/coverstory15.jpg" vspace="10" width="400" /><br />
	</span></span></strong><span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">Five years before the Maoist insurgency started in Nepal in 1996, Nepal’s GDP growth rate was approximately 5.34 percent per annum. The growth rate plunged to 3.36 percent per annum in 2006, the year the underground Maoists came over-ground following the success of the peaceful April Uprising (Jana Andolan II) and the subsequent restoration of the dissolved House of Representatives in April 2006. The economy’s growth rate kept fluctuating over the next five years till 2011.</span></span></p>
<p class="Pa7" style="text-align:justify">
	<span style="font-size:14px;"><span class="A4">N</span><span style="color: rgb(34, 30, 31);">epal is yet to witness a ‘healthy’ growth rate, which has so far fluctuated between 3.3 and 4.5 percent in this millennium, with the exception of 6.10 percent in 2008. Perhaps nobody is happy with the country’s slow growth rate, but the economists are probably the most worried lot. They lament the fact that the country’s economy has continued the downward trend even after the peace deal between the government and the Maoist guerrillas signed on November 21, 2006. A majority of Nepali economists cite the lack of new investments as the major reason for this poor show of the Nepali economy. They blame an ‘unfavourable investment climate’ created by the political uncertainty for the lack of new investments – foreign as well as domestic. However, it is not that every sector slackened over the past one and a half decades. Some sectors have witnessed encouraging growth rates. (it would be better if you could cite some examples)</span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;"><img alt="cover story december 2012" border="1" height="258" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/agriculturalproduction.jpg" vspace="10" width="400" /><br />
	<br />
	<br />
	<br />
	<span style="color: rgb(34, 30, 31);">Despite the political upheavals which include a decade-long armed insurgency, sectors such as telecommunications, education, information technology, road construction, and remittance have registered significant growths over this period. In the education sector, the literacy rate has continued a steady growth. This is mainly because of the rise in private sector investment in education, and the top priority attached to the sector by the government which allocates the largest share of the national budget to education. <br />
	<br />
	</span></span><span style="font-size:14px;"><img alt="cover story december 2012" border="1" height="244" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/totaltourist.jpg" vspace="10" width="400" /></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;"><br />
	<span style="color: rgb(34, 30, 31);">Remittance has become the lifeline of the Nepali economy in recent times. Despite huge trade deficits, the country’s Balance of Payment has remained positive, barring some hiccups. The remittance inflow has fuelled the growth of the banking sector and helped in the reduction of poverty and increase in the people’s living standard, believe the economists and experts.<br />
	<br />
	</span></span><span style="font-size:14px;"><img alt="cover story december 2012" border="1" height="310" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/totalroadlenght.jpg" vspace="10" width="500" /></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;"><br />
	<span style="color: rgb(34, 30, 31);">However, energy and tourism, arguably the two most prospectful sectors in the country, have not grown as expected. The entry of the private sector through Public Private Partnership (PPP) and Power Purchase Agreement with the state-owned Nepal Electricity Authority (NEA) has shown some hopes in the hydropower sector. However, the hope to resolve the power crisis that has only intensified since 2006 is still out of sight. <br />
	<br />
	</span></span><span style="font-size:14px;"><img alt="cover story december 2012" border="1" height="266" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/totalremittance.jpg" vspace="10" width="500" /></span></p>
<p>
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Similarly tourism, another sector widely tipped as the basis for Nepal’s economic development, could not improve as expected over the years. A veteran of Nepal’s tourism sector and Chairman Emeritus of Hotel Soaltee Crowne Plaza, Prabhakar SJB Rana notes that though the tourism industry gained some ground over the past one decade, “there are plenty of areas where we could not do anything at all”. Rana as well as other analysts attribute this failure mainly to Nepal’s inability to promote and advertise itself as an exciting tourist destination in the world’s tourist originating markets. <br />
	<br />
	</span></span><span style="font-size:14px;"><img alt="cover story december 2012" border="1" height="217" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/telephonelandlineexpansion.jpg" vspace="10" width="400" /></span><br />
	<span style="font-size:14px;"> </span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Economists as well as development planners seem to be disappointed with the latest political and economic developments. Deependra Bahadur Kshetry, Vice-chairman of the National Planning Commission, says, “The country is moving backward instead of going forward”. Referring to the difficulties of the current government led by Dr. Baburam Bhattarai in bringing out a full national budget for fiscal year 2012/13, he added, “The kind of hindrance created by the opposition parties in Nepal (in the presentation of the national budget) is seen nowhere in the world.” The size of the budget this year has shrunk compared to that of the previous year. Kshetry blames the ‘non-cooperation’ by the opposition parties for the sluggish growth of the Nepali economy in recent years. <br />
	<br />
	</span></span><span style="font-size:14px;"><img alt="cover story december 2012" border="1" height="279" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/landbought.jpg" vspace="10" width="500" /><br />
	</span></p>
<p>
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Several other analysts echo Kshetry’s concerns and cite the example of the Maoist obstruction to the presentation of the national budget last year by the then government led by CPN-UML leader Jhalanath Khanal. </span></span><span style="font-size:14px;"> </span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span></p>
<p>
	<strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">The Good Old 90s</span></span></strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);"><br />
	<br />
	Mid 1990s was a time when the scenario was much brighter with the economic growth rate hovering around five percent. From 1990, the year democracy was restored to 1995, Nepal’s overall situation improved, according to senior economist Dr Dilli Raj Khanal. But in the years after 1995, the Nepali economy witnessed a slowdown which turned into a negative growth during 2000-2005. Recalling the situation of the 1990s, economist Prof. Dr. Bishwambher Pyakuryal says, “There was devaluation of the Nepali currency, economic imbalance, and unemployment but the economy continued to grow - albeit at a modest rate - even during the insurgency in the late 1990s. The donors were supporting the development projects; ongoing projects were being given continuity. But, the donors cut their financial support to Nepal by 48 percent in the last fiscal year, compared to the previous year.”</span></span><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);"><br />
	<br />
	</span></span><br />
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);"><span style="font-size:14px;"><img alt="cover story december 2012" border="1" height="247" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/goverment.jpg" vspace="10" width="400" /></span> <br />
	Dr. Khanal adds, “Nepal’s economic growth rate, which was already slow, further deteriorated during the period of 2000 - 2005. The Maoist insurgency, which escalated during these years, is to blame to a great extent for today’s flagging economy.” Another economist, Dr Chiranjibi Nepal observes, “Although there was little economic progress from 1996 to 2000, the country was faring well, so to speak. But after 2000, there was a massive decline in economic activities, followed by the closure of several industries and slowdown in the manufacturing sector. The cumulative negative impact of all this on the economy was too heavy.” </span></span><span style="font-size:14px;"> </span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;">&nbsp;</span></strong><span style="font-size:14px;"><img alt="cover story december 2012" border="1" height="240" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/GDP.jpg" vspace="10" width="400" /><br />
	<br />
	<br />
	</span></p>
<p class="Pa13" style="margin-top:5.0pt">
	<strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Sri Lankan Comparison </span></span></strong></p>
<p>
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Economists and development experts often compare the economic situations of Nepal and Sri Lanka, for both countries have gone through violent armed insurgencies in recent history. When Nepal was passing through an armed Maoist conflict, Sri Lanka was going through the LTTE violence. In fact, Sri Lanka’s insurgency-related problems were far bigger than those of Nepal, in terms of both size and scale. For example, the Sri Lankan conflict took the life of its then head of the state and aeroplanes parked at the international airport in the capital were blown off in LTTE attacks. Nothing of that sort happened in Nepal. (The massacre of King Birendra and his family was not a terrorist act.)</span></span><span style="font-size:14px;"><br />
	<br />
	</span><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Dr. Nepal says, “It is amazing that Sri Lanka achieved five percent growth rate even when the armed conflict there was in full swing. What’s more, the island country’s growth rate crossed seven percent after the LTTE violence was brought to an end. In stark contrast, Nepal has continued with its poor show in terms of economic progress even after so many years of the start of the peace process.”</span></span><span style="font-size:14px;">&nbsp;</span><span style="font-size:14px;"> </span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);"><br />
	Former finance minister Dr. Prakash Chandra Lohani explains the reasons. “Political uncertainty and chaos has been at the root of the sorry state of the Nepali economy. It’s unfortunate that the same reasons still prevail and are hindering Nepal’s economic progress,” he says. </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;"><br />
	&nbsp;<span style="color: rgb(34, 30, 31);">The lack of any worth-noting investment in the major sectors of the economy has been another hurdle to Nepal’s economic progress. Neither domestic nor foreign investment worth mentioning has been made since the start of the peace process in the country. According to Dr. Pyakuryal, no significant amount of foreign direct investment (FDI) has come to Nepal over this period because of the feeling of insecurity and lack of confidence in the government. </span></span></p>
<p class="Pa13" style="margin-top:5.0pt">
	<span style="font-size:14px;">&nbsp;<br />
	</span><br />
	<span style="font-size:14px;"><span style="font-size:14px;"><img alt="cover story december 2012" border="1" height="255" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/budget.jpg" vspace="10" width="400" /><br />
	<br />
	</span> <span style="color: rgb(34, 30, 31);">However, all hopes are not lost for Nepal. Analysts still see the possibility of a double digit growth for the Nepali economy, provided that the state can ensure political stability and policy predictability for foreign as well as domestic investors. Some instances in the recent past support this optimism. For example, a number of foreign investors flocked Nepal – some of them wanted to explore investment opportunities while others came with concrete proposals in their hands – immediately after the government and the Maoist guerrillas signed the comprehensive peace accord on November 21, 2006. Similarly, many foreign investors applied and got the permission to conduct detailed surveys for developing a number of hydropower projects of different capacities. But many of these investors haven’t been able to go ahead with their projects, thanks to the hurdles posed by different vested interest groups. Successive governments over the years have not been able to deal effectively with these ‘project spoilers’, perhaps because of the uncertainty looming large over their own future.</span></span></p>
<p class="Pa13" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">&nbsp; <br />
	</span></span></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">&nbsp;</span><span style="color: rgb(34, 30, 31);">Human Development Index</span> </span></strong><br />
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Nepal’s Human Development Index (HDI) value for 2011 is 0.458 and the country is positioned 157th out of 187 countries included in the Index. According to a report of UNDP, between 1990 and 2011, Nepal’s HDI value increased from 0.340 in 1990 to 0.509 in 2006 and 0.458 in 2011.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">The analysts say remittance has a lot to do with poverty reduction and consequent improvement in HDI over the years. According to the Human Development Report 2011, life expectancy at birth in 1995 was 57.5 years and it increased to 65.6 in 2005 and to 68.8 in 2011. Improved health condition due to availability of health services and improved awareness are considered as contributing factors for increased life expectancy.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span><span style="font-size:14px;"><img alt="cover story december 2012" border="1" height="320" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/electricity.jpg" vspace="10" width="500" /></span></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Remittance&nbsp;&nbsp;&nbsp; </span></span></strong><span style="font-size:14px;"><br />
	</span></p>
<p>
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">The role of remittance in Nepali economy is increasing continuously. When most of the sector of the economy are showing downward trend, remittance inflow has constantly increased. This on the other hand has kept the Nepali economy going, say analysts. Remittance inflow that was Rs 239.388 billion in the fiscal year 1995/96 made a steep rise to Rs 413.428 billion in 2000/01 and to Rs 430.396 billion in 2001/02. Though the following five years till 2004/05 saw a near stagnation in remittance inflow, it registered a sharp rise to Rs 1246.423 billion in 2010/11. The trend shows that it is likely to keep on growing in the years to come too.</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">The remittance inflow in 1995/96 was equivalent to 1.79 percent of the GDP. That ratio shot up to 10.97 percent in 2001/02 and 18.69 per cent in 2010/11, according to the statistics provided by Nepal Rastra Bank.&nbsp;&nbsp; <br />
	<br />
	Remittance is credited to be one of the most important contributor to reduction of poverty incidence which, according to the Nepal Living Standards Survey III (NLSS-III), published in 2011, stands at 25.2 per cent, down from 31 percent a decade earlier.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Number of Nepali youth going abroad for employment increased during the insurgency and in the following years. Upon publication of the NLSS-II which showed poverty reduced to 31 percent from 42 percent shown in the NLSS-I in 1996, analysts had expressed fear that the poverty incidence may shoot back to 42 percent or above if the peace process started by then encouraged the migrant workers to go back to the village and discouraged further migration out of the village. But it seems that the outflow of the people from the villages is not likely to be reversed in the foreseeable future.</span><br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;<br />
	</span><span style="font-size:14px;"><img alt="cover story december 2012" border="1" height="162" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/human.jpg" vspace="10" width="500" /><br />
	</span></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Trade&nbsp;&nbsp; </span></span></strong><br />
	<br />
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Nepal’s international trade has continuously been in deficit in the absence of low industrial base. Measures for trade promotion have not brought significant improvement. Trade analysts say that easy availability of cheap Chinese goods has displaced many industries though it has helped in improving the lifestyle of the people. Nepal’s readymade garments industry (one of the major export industries) lost its American and European market due to the combination of two reasons that struck it simultaneously. One, the quota facility it enjoyed in these markets till late 1990s was lost with the phase out of the multi-fibre agreement in international trade. Second, the severe labour unrest instigated by the Maoists during the insurgency as well as after they came overground following the success of Jana Andolan II, disrupted the supply chain that forced the buyers to search other sources of supply.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">According to data from Trade and Export Promotion Centre (TEPC) and NRB, between fiscal years 1995/96 and 2011/12, it was only in 1999/2000 and 2000/01, the trade was measured surplus. The surplus in 1999/2000 and 2000/01 was by Rs 18.43 billion with India and Rs 40.24 billion with other countries and by Rs 19.18 billion with India and Rs 40.85 billion with other countries respectively.</span> <br />
	</span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Nepal’s international trade has been concentrating more and more in India in the recent years. While the share of countries other than India in Nepal’s total international trade was higher than with India till fiscal year 2001/02, then after India’s share started to be higher than that of other countries. </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span><br />
	<strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Government Budget&nbsp;&nbsp; </span></span></strong><span style="font-size:14px;"><br />
	</span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Capital expenditure in the government budget during the insurgency (from 1995/96 till 1998/99) was low and almost stable. But it was higher than the recurrent expenditure. However, in years after 1999/2000, recurrent expenditure has zoomed up while capital expenditure remained almost stagnant until the fiscal year 2005/06. One of the reasons behind such scenario was concentrated priorities of the government to calm the heightening conflict. For that purpose, expenditure was diverted to investment in security purpose; as a result, development projects were affected. It was also complained that the environment was not favourable for successful completion of the projects by the project executors during the conflict era. In the last six years recurrent expenditure has been growing substantially, reads the data provided by the Office of the Comptroller General.</span></span></p>
<p>
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Analysing this, Prof. Dr. Bishwambher Pyakuryal says, after the peace process started, many projects were either postponed or discontinued because of lack of trust in the government by donors. For example, last year the donors decreased their financial support by 48 per cent. Deficit budget is financed through foreign loan and internal loan. The amount of foreign borrowings in 2000/2001 (Rs 12.044 billion) was almost equal to the borrowings in 2010/11 (Rs 12.075 billion) while it decreased to Rs 4.546 billion in 2002/03. Similarly, the internal borrowing reached a record high in 2010/11 with Rs 42.515 billion. In the fiscal year 2009/10 it was Rs 29.914 billion and in 2006/07 it was Rs 17.892 million.</span></span><span style="font-size:14px;"><br />
	<br />
	&nbsp;</span><span style="font-size:14px;"> </span></p>
<p class="Pa13" style="margin-top:5.0pt">
	<strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Roads </span></span></strong></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);"><br />
	One of the areas where Nepal registered a good growth was in the expansion of roads network. The total length of roads has doubled over the fifteen years period between 1996 and 2012. The growth had slowed down when the conflict was at its worst. However, the growth never really ceased. Many remote parts of Nepal have been connected by road over these years. The growth is particularly in the length of fair weather roads. One reason for this increasing trend is initiative taken by local people. Growth is seen also in the length of gravelled roads that have helped in improving accessibility. In the recent years it can be noticed that the length of black-topped roads has outpaced other kinds of roads.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Electricity </span></span></strong><span style="font-size:14px;"><br />
	<br />
	<span style="color: rgb(34, 30, 31);">Electricity shortage has hamstrung industrial growth and made city life miserable. And the history reveals very interesting facts. In 1990, the installed capacity of hydropower generation in the country was 0.73 million MW which increased to 0.86 million MW in 1995/96 which gives an addition of 0.15 million MW within six years. This increased to 1.76 million MW in 2005/2006 – an increase of 0.9 million MW in ten years. Now in 2012 it stands at 2.36 million MW.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa13" style="margin-top:5.0pt">
	<strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Telecommunication </span></span></strong></p>
<p>
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">There has been a good increase in the telephone coverage across the country over the last 15 years. And this expansion is speedier in cellular mobile phones. According to the census 2011, 7.37 per cent of Nepali population uses landline telephone though this is heavily concentrated in urban areas where 22.66 per cent population uses it. In rural areas only 3.77 per cent of the population there has landline telephone. Similarly 64.63 per cent of total population of Nepal uses cellular mobile phone. This ratio is 84.07 per cent in urban areas and 59.98 per cent in rural areas. According to the census 2011 report published in November 2012.</span></span><br />
	 </p>
<p class="Pa13" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">The telephone sector suffered a lot during the insurgency. For example, many telephone towers were blown up by Maoist insurgents. However, this sector gained the most after the peace process started.</span></span></p>
<p class="Pa13" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">&nbsp;</span></span></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">&nbsp;</span><span style="color: rgb(34, 30, 31);">Agriculture&nbsp; </span></span></strong><span style="font-size:14px;"><br />
	</span></p>
<p>
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">The Agriculture sector saw stagnant trend during the period between 1995/96- 2011/12. The cash crops sub-sector did better – the production of cash crops doubled during the period. Within the cash crop subsector, the major crops that recorded substantial growth were tea, coffee and cardamom. </span></span><span style="font-size:14px;"> </span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">According to Sheela Thapa, Deputy Director at AEC (Agro Enterprise Center), consistent growth in the agricultural production was mainly because of the good weather and high rate of seed replacement. She says, “We don’t have pest problems. Farmers are increasingly using hybrid seeds as well as improved seeds which have positive impact in the production figures.” </span></span></p>
<p>
	<span style="font-size:14px;"><br />
	<span style="color: rgb(34, 30, 31);">Within this period, the year 2008 was the best in terms of weather and the availability of fertilizers while the drought and flood in 2006/ 07 resulted in a slump in agricultural production. </span></span><span style="font-size:14px;"> </span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Durga Prasad Upreti, Senior Economist at Agricultural Commodity Export Promotion Program says though there were no direct effects of armed conflict or the subsequent peace process in agricultural production, the country has lagged behind six to seven years in terms of agricultural sector development due to the conflict. He attributes the subsistence farming system for no effect of the conflict or the subsequent peace process in agriculture. According to him, had there been commercial farming with large scale farms producing the goods for the market, Nepal’s agricultural sector would have certainly suffered huge losses due to that conflict. </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span><strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Irrigation&nbsp;&nbsp; </span></span></strong><span style="font-size:14px;"><br />
	</span></p>
<p>
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">There were noticeable changes in the irrigation sector with the start of Maoist civil war in 1995/96. The hilly region saw massive decline in the growth of additional land irrigated. About 10,600 hectares of additional land were brought under irrigation in 1995/96, but it was only 1,620 hectares in 2006/07 and only 1,345 hectares in the first nine months of the fiscal year 2011/12. In Terai region, 36,084 hectares additional land was brought under irrigation in 1995/96. It was 16,782 hectares in 2005/06 and 16,101 hectares in the first nine months of the fiscal year 2011/12. </span></span><span style="font-size:14px;"> </span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Similarly, the method of irrigation has also been varied since 1995/96 with the increase in the use of ground water system. The canal water irrigation system was the main source of irrigation, irrigating 33,898 additional land in 1995/96, 5,460 hectare in 2006/07 and 12,935 hectares in the first nine months of the fiscal year 2011/ 12. On the other hand, the ground water irrigation system was 12,231 hectares in 1995/96, 21,024 hectares in 2006/07 and 4,512 hectares in the first nine months of the fiscal year 2011/12 respectively. According to the Economy Survey 2011/12, about 67 per cent of the total agricultural land is covered by irrigation.</span> <br />
	</span></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;">&nbsp;</span></strong></p>
<p class="Pa13" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Manufacturing</span></span></p>
<p>
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Manufacturing sector was the greatest sufferer due to the conflict and it is still the same. The problem started to be more pronounced from the year 2003/04 since when there was massive decline is recorded in the production of manufactured goods. </span></span><span style="font-size:14px;"> </span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span></p>
<p>
	<strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Education&nbsp;&nbsp;</span></span></strong></p>
<p class="MsoNormal">
	<br />
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Education sector too was badly affected by the conflict that forced many schools to close down, particularly in remote rural areas, and the students there were forced to join the Maoist army. However, that triggered the private sector to open new schools and colleges (mainly plus two colleges) in the cities, particularly in the capital. The conflict also encouraged the students to go abroad for studies. Now, colleges in Nepal have started getting affiliation with foreign universities and offering their courses here.</span> <br />
	</span></p>
<p>
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">According to the latest National Census 2011, the country’s literacy rate stood 65.9 percent, up from the 54.1 percent in 2001. However, this trend indicates that that it will take over three decades for Nepal to achieve the Millennium Development Goal (MDG) of 100 percent literacy, whereas that goal is actually set for 2015. </span></span><span style="font-size:14px;"> </span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa13" style="margin-top:5.0pt">
	<strong><span style="font-size:14px;"><span class="A0">National Census-2011 </span></span></strong></p>
<p class="Pa18">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Overall literacy rate (age-5 and above) =65.9% </span></span></p>
<p class="Pa18">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Male literacy=75.1% </span></span></p>
<p class="Pa18">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Female literacy=57.4% </span></span></p>
<p class="Pa18">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Highest Literacy Rate (Kathmandu=86.3%) </span></span></p>
<p class="Pa18">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Lowest Literacy Rate (Rautahat=41.7%) </span></span></p>
<p class="Pa18">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Education Above SLC=10.2% (Total Pop.) </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Tourism</span> </span></strong></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Tourism industry was not affected in the initial years of the armed conflict. So, till the end of the millennium, Nepal got good number of foreign tourists. One reason for that was the Visit Nepal Year campaign of 1998. According to the given data, it was after the millennium the tourism sector in Nepal witness a negative growth for few years. The government declared the year 2011 as ‘Nepal Tourism Year’ expecting similar effects as those of Visit Nepal Year -1998, but it was largely a failed exercise. The tourist arrival in that year was 736,215, much less than the expected one million, though nearly double the number of 1996 or 2006.</span><br />
	<br />
	</span></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Civil Aviation&nbsp; </span></span></strong><span style="font-size:14px;"><br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Decade-long conflict adversely affected civil aviation industry as well. Many Air traffic control towers were destroyed in the conflict. For example, the ‘West Locator Tower-Dharke’ was completely destroyed and it is still in the dilapidated state.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Another effect of the conflict was in the international flight movement to and from Kathmandu. Driven out of their villages, Nepali youth started going abroad for work and that increased the demand for international flights. Consequently foreign airlines started increasing their flights to Kathmandu. However, Nepal’s flag carrier Nepal Airline Corporation could not benefit from this as it suffered from lack of aircraft. Consequently, Nepal could not derive as much benefit as could have from this boom in international air traffic.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa13" style="margin-top:5.0pt">
	<strong><span style="font-size:14px;"><span class="A0">Air operator’s certificate </span></span></strong></p>
<p class="Pa18">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Total AOC issued – 69 </span></span></p>
<p class="Pa18">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Valid AOC – 39 </span></span></p>
<p class="Pa18">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Invalid and Cancelled –30 </span></span></p>
<p class="Pa18">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Airline in Operation –34 </span></span></p>
<p class="Pa18">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">AOC Valid but Not in Operation – 5 </span></span></p>
<p class="Pa18">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Helicopter Operator with Valid AOC –8 </span></span></p>
<p class="Pa18">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Fixed Wing Operator with Valid AOC –14 </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">Aviation Sports with Valid AOC –17</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;</span></span></p>
<p class="MsoNormal">
	<span style="font-size:16px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;</span></span></p>
<p class="MsoNormal">
	<span style="font-size:16px;"><strong><span color:="" myriad="" style="line-height: 115%; font-family: ">‘We must strengthen our democracy’</span></strong></span></p>
<p class="MsoNormal">
	 </p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span color:="" myriad="" style="line-height: 115%; font-family: ">&nbsp;<img alt="cover story december 2012" border="1" height="227" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/PRABHAKAR-SJB-RANA.jpg" vspace="10" width="200" /></span></span></p>
<p class="Pa0">
	<span style="font-size:14px;"><span class="A0">PRABHAKAR SJB RANA </span></span></p>
<p class="Pa0">
	<span style="font-size:14px;"><span class="A0">Chairman Emeritus </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A0"><span style="line-height: 115%; font-family: ">Soaltee Hotel Ltd, Crowne Plaza Kathmandu</span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A0"><span style="line-height: 115%; font-family: ">&nbsp; <br />
	</span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Sri Lanka, too, suffered from an armed insurgency which was more intense and persisted for a longer period than the Maoist conflict in Nepal. But Sri Lanka has been doing well in recent times, following the end of the violence there. In comparison, Nepal is not doing that well though the decade-long conflict was said have ended six years ago. In my view, our socio-economic condition is going downward at present. To become a prosperous nation with robust economy, we must groom and strengthen our democracy.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">As a matter of fact, the economy and social factors are inseparable and proportional to each other. At present, the inflation is on the rise and the main factor behind the gloomy picture is the decreasing exports. The political instability has held the nation a hostage. On the one hand, there is a positive progress in the tourism sector, while on the other, we haven’t made much difference. According to the October statistics, the international tourism market has witnessed a fall. So, we must acknowledge the fact that it’s high time that we became self-dependent and started thinking how to raise our market at the global level. <br />
	</span></span></p>
<p class="MsoNormal">
	<strong><span style="font-size:16px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;</span></span></strong></p>
<p class="MsoNormal">
	<strong><span style="font-size:16px;"><span color:="" myriad="" style="line-height: 115%; font-family: ">‘Peace process did not bring optimism for investment’</span></span></strong></p>
<p class="MsoNormal">
	 </p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span color:="" myriad="" style="line-height: 115%; font-family: ">&nbsp;<img alt="cover story december 2012" border="1" height="205" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/DR-PRAKASH-CHANDRA-LOHANI.jpg" vspace="10" width="200" /></span></span></p>
<p class="Pa0">
	<span style="font-size:14px;"><span class="A0">DR PRAKASH CHANDRA LOHANI </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A0"><span style="line-height: 115%; font-family: ">Economist</span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A0"><span style="line-height: 115%; font-family: ">&nbsp;</span></span></span></p>
<p class="MsoNormal">
	The average growth rate of the Nepali economy was around five percent during the 1990-2000 decade, despite the beginning of the decade-long Maoist civil war in 1996. However, after the peace process, there was a slowdown in the economy, mainly because of the lack of new investments. One reason for this might be there were an increasing number of improper investments, misuse of money and leakage in investments.</p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Post the peace process, the government had no plan for investment and it could not guarantee the investors for business in Nepal. There were ongoing big budget programmes but with no productivity. A lot of money was wasted in unproductive sectors which led to the failure of Nepali economy to achieve even the minimum growth.</span> <br />
	</span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">The peace process, unlike the people’s expectations, did not bring optimism and as a result, the economy could not prosper in the post-conflict period. Uncertainty and political unrest were the major reasons behind this. </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">Now, the country has no regular income source because of high rate of unemployment. Young people are wandering all over the world like never before - only to earn. Unless they are employed, the country cannot generate income. If we want to reform our economy we need to minimize the political risks. Drafting the new constitution and creating conducive environment for investors will surely bring positive changes in the Nepali economy.</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;</span></span></p>
<p class="MsoNormal">
	<strong><span style="font-size:16px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;</span><span color:="" myriad="" style="line-height: 115%; font-family: ">‘Intra- party consensus on economic issues’</span></span></strong></p>
<p class="MsoNormal">
	 </p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span color:="" myriad="" style="line-height: 115%; font-family: ">&nbsp;<img alt="cover story december 2012" border="1" height="225" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/PROF-DR-BISHWAMBHER-PYAKURYAL.jpg" vspace="10" width="200" /></span></span></p>
<p class="Pa0">
	<span style="font-size:14px;"><span class="A0">PROF DR BISHWAMBHER PYAKURYAL </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A0"><span style="line-height: 115%; font-family: ">Economist</span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A0"><span style="line-height: 115%; font-family: ">&nbsp; <br />
	</span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Historically there seems to have been positive relation between economic development and political stability in Nepal. However, it is difficult to find the exact relation in the current scenario. It is mainly because Nepal could not prosper after the peace process when compared to the time of conflict. For example, Iraq, a country in Western Asia is achieving a double digit growth despite such a shaking unrest. We don’t find a relation between political instability and economic growth there.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Nepal’s growth rate was four percent during the years 1997- 2003 and three percent during 2003- 2008. Before the Maoist war, the average growth rate was four percent, but it decreased by one percent after the peace process. During the insurgency, there was an increase in unemployment, devaluation of the Nepali currency, economic imbalance etc but the economic growth was not that uncertain and many development projects were going on. However, after the peace process, many projects were either postponed or discontinued because of the lack of trust in the government. Last year only, donors decreased their assistance by 48 per cent.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Political stability is supposedly the backbone of economic stability. Therefore, politicians should understand that politicization of economic agendas is never fruitful. With the erosion of political credibility, the trend of Nepalis investing outside the country has been on the rise. The government has fallen short of motivating and inspiring the private sector. Even more alarming, perhaps, is the ever rising exodus of the productive population – the age group of 16 to 29 – for foreign employment. Remittance, a not-so-dependable source in today’s global politico-economy, has kept the Nepali economy afloat so far.</span> <br />
	</span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">The common people do not care which party or person is in power; all that they care about, perhaps, is how the inattention to the country’s economic agendas is affecting their lives. Now the economic situation is unpredictable. If this situation continues, the possibilities of less production, labour migration, capital flight, uncertainty, insecurity for investors will rise for sure. Economic issues should not become the victim of anybody’s vested political interest. We can have a continuous growth in the economy if the political leaders are ready for it. </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">There should be an inter-party consensus on high priority sectors such as health and education. This has become very urgent and it’s high time that the politicians felt this urgency. There should be consensus at the policy level for the implementation of the economic agendas. This is the only way to regain the people’s support and trust which is very vital for sustaining the political change and preventing economy flight. Our policies and legal framework, too, should be predictable. I wonder why our politicians couldn’t learn to agree on the common economic agendas. However, I am optimistic that they will, someday.<br />
	</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;</span></span></p>
<p class="MsoNormal">
	<span style="font-size:16px;"><strong><span color:="" myriad="" style="line-height: 115%; font-family: ">‘Stable government is a must for development’</span></strong></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span color:="" myriad="" style="line-height: 115%; font-family: ">&nbsp;<br />
	<img alt="cover story december 2012" border="1" height="257" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/DR-CHIRANJIBI-NEPAL.jpg" vspace="10" width="200" /><br />
	</span></span></p>
<p class="Pa0">
	<span style="font-size:14px;"><span class="A0">DR CHIRANJIBI NEPAL </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A0"><span style="line-height: 115%; font-family: ">Economist</span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A0"><span style="line-height: 115%; font-family: ">&nbsp;</span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Economic activities in Nepal were highly affected during the years 1996- 2000, leading to a low economic growth. The economy’s downward spiral started in 1996, and after the year 2001, the changes became noticeable with the growth turning negative. It was when Nepal started being compared with conflict-hit countries such as Burundi and North Korea.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">The worst-hit sectors were industry and manufacturing, declining from 16 per cent in 2001 to six per cent in 2006. This massive decline in economic activities and closure of the industries hit the economy hard. The resulting negative growth introduced foreign employment as a major business. Weak export and nil employment were the main features of the economy back then. The trend of foreign employment peaked while export saw a massive decline from 2000 to 2006. The contribution of remittance to the GDP was higher than that of total export. After 2006, the situation was expected to improve. But it did not, with the economic growth rate hovering around barely above six per cent. The growth rate saw a downward trend again in the years 2008-2012, with an average of three per cent.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Nepal is losing its international credibility, thanks to the current political mismanagement. A clear indicator for this is the decline in the annual foreign direct investment (FDI) inflow which has decreased from Rs 9 billion nine years back to around Rs 7 billion at present. For survival, the country depends as much on remittance as the Netherlands once relied on its oil resource. If the remittance inflow follows a downward trend, what will be the future of Nepal?</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Remittance is simply undependable as a means to sustain the economy in the long run. Also, its inflow which depends on a number of external factors is unpredictable. It is a kind of slow poison which ultimately kills a nation in the course of time. The government has no strategies to generate employment in the country. When there is no productivity, how can we have growth? This is why our international trade comprises of 85 per cent import and a mere 15 per cent export. There is no fixed time for presenting the country’s annual budget, which has been delayed over and again. Meanwhile, the budget deficit has reached Rs 3. 87billion.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">It seems amazing that Sri- Lanka, which was growing at about five percent during the LTTE conflict, has been able to achieve a growth rate of more than seven per cent post the conflict. But Nepal, on the other hand, has failed to achieve any impressive growth rate even after the peace deal. I don’t understand why Nepal hasn’t witnessed a healthy economic growth though the decade-long armed insurgency here ended six years ago. Our major problem, perhaps, has been unstable government. Moreover, economic growth also depends on policy consistency and stability; Nepal lacks long-term government policies.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">Nepal has huge prospects in many sectors, including hydropower and tourism, which await their effective exploitation. For the past few years, Nepal’s average annual hydropower generation capacity has been only six mega-watts. At this rate, it will take us a century to produce 600 MW of hydropower. Our total hydropower potential is up to 63,000 MW. I am confident that we can bring about impressive changes over the next five years – there is no need to wait for another 25 years as suggested by some politicians - if we have a government stability and policy consistency. <br />
	</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);"><br />
	</span></span></p>
<p class="MsoNormal">
	<strong><span style="font-size:16px;"><span color:="" myriad="" style="line-height: 115%; font-family: ">‘We lack clear economic policies’</span></span></strong></p>
<p class="MsoNormal">
	<img alt="cover story december 2012" border="1" height="222" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/DR-DILLIRAJ-KHANAL.jpg" vspace="10" width="200" /></p>
<p class="Pa0">
	<span style="font-size:14px;"><span class="A0">DR DILLIRAJ KHANAL </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A0"><span style="line-height: 115%; font-family: ">Economist</span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A0"><span style="line-height: 115%; font-family: ">&nbsp;</span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Compared to other Asian countries, Nepal always has had a slow growth rate. Nepal’s economy started slowing down further after 1995; the effects of this were quite visible during the years 2000-2005. The armed Maoist insurgency certainly had some impact on the Nepali economy, but it was only a marginal impact.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Unlike in many African nations which have been through conflicts, the negative impacts of the Maoist insurgency on Nepal’s economy became more perceptible after the beginning of the peace process. Nepal hasn’t seen the kind of economic growth which normally follows the establishment of peace after a long period of conflict in any country. This is mainly because we could not give priority to our economic issues.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">The fact that the political parties in Nepal cannot agree on even presenting the country’s full national budget on time speaks volumes about our current problems. The country could not get its annual budget on time, except for one fiscal year, after the start of the peace process in 2006. It is unfortunate that the politicians have failed to focus on the country’s economic agendas over this period. Their concern for the worsening economy is limited to slogans and speeches only. In reality, their only concern is how to get the reins of power. Power is what they have been fighting for all these years, after the signing of the peace deal.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">We don’t have the pre-requisite for development, either. For example, we lack the infrastructures that are a must for a big-budget project to run smoothly. We haven’t been able to encourage local as well as foreign investors to invest in the country. High transaction costs, power shortage and water scarcity have made it further difficult to sustain the industry. In addition, the investors find the overall environment in the country not conducive for investment.</span> <br />
	</span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">There is uncertainty in the global environment and the political instability in Nepal has made achieving economic prosperity further difficult. My research on finding the sources of economic growth also suggests the need to have proper economy and to make good policies to implement them. If we do it, we can have high growth rate in coming 10 years- and we don’t need to wait for 2030. Nepal can benefit from the development of global economic hubs like China and India as well. We could increase our income by five times what we earn today. We can have better economy than the newly emerged economies like Malaysia, UAE and other Gulf countries.</span> <br />
	</span></p>',
			'published' => true,
			'created' => '2013-01-04',
			'modified' => '2013-02-07',
			'keywords' => '',
			'description' => 'Five years before the Maoist insurgency started in Nepal in 1996, Nepal’s GDP growth rate was approximately 5.34 percent per annum. The growth rate plunged to 3.36 percent per annum in 2006, the year the underground Maoists came over-ground following the success of the peaceful April Uprising (Jana Andolan II) and the subsequent restoration of the dissolved House of Representatives in April 2006. The economy’s growth rate kept fluctuating over the next five years till 2011.',
			'sortorder' => '658',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 8 => array(
		'Article' => array(
			'id' => '739',
			'article_category_id' => '40',
			'title' => 'Cover Story November 2012',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div>
	COVER STORY</div>
<div>
	<span>By Pinaki Roy (with inputs from Sushila Budhathoki, Bivek Dhakal and Abha Dhital)<br />
	<br />
	<br />
	<img alt="coverstory" border="1" height="362" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/coverstory(3).jpg" vspace="10" width="400" /><br />
	</span></div>
<div>
	 </div>
<div>
	Corporate Buildings</div>
<div>
	<span>Customised Business Premises as Corporate Fad</span></div>
<div>
	 </div>
<div>
	<b>Corporate houses in Nepal are attracted towards having their own buildings with a vision to make business operations easier and less time consuming among a host of other reasons. The trend of getting customized buildings constructed has caught up fast with the corporate entities in the last one-and-a-half decade or so, observe analysts.</b></div>
<div>
	 </div>
<div>
	<span>G</span>etting a building constructed for business purposes is becoming a onetime and long-term investment for the corporate groups in the country. Om Rajbhandary, the Chairman of Brihat Investments Pvt Ltd credits the banking sector for starting the trend. He says, “The banks were among the first ones to have their own buildings constructed while the other sectors followed suit in the last 15 years or so.”</div>
<div>
	 </div>
<div>
	 </div>
<div>
	Operating from rented offices is becoming a thing of the past. By having their own buildings, corporate big-wigs are focusing more on creating an impression on their business associates and the clientele at large. People usually perceive a corporate house to be of a certain standard if it owns a building. Kumar Lamsal, the CEO of Sanima Bank believes, “It directly relates to the image of a company that can neither be built nor destroyed in a day.” He explains that though one has to spend a huge amount in constructing own building, “The benefits are for many years to come and the cost will be ultimately compensated in the long run.”</div>
<div>
	 </div>
<div>
	 </div>
<div>
	From a global perspective too, the need of the hour for businesses is to opt for high rise buildings. It is more so in the case of Nepal where there is little land to spare in urban areas, especially in Kathmandu, where most corporate houses operate from. The multi-storied corporate buildings serve as easy means to minimize uncontrolled urbanization as well as the completion cost of the buildings. “I believe that the corporate big-wigs building skyscrapers for their organizations is a positive initiation given the rapid flow of unmanaged urbanization in Kathmandu,” says Bishnu Panthee, the Vice President of the Society of Nepalese Architects (SONA). He adds that there aren’t any viable options other than building high rises in the capital as the city needs to adapt to the latest trend and move ahead with the times.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	The charm of working when you are using your own resources makes the working environment more conducive and also boosts the workers’ moral spirit. Working environment plays a vital role in productivity and a good infrastructure certainly leaves a good impression on the minds of the internal as well as external customers. A well furnished and equipped office space helps to maintain reputation and image of the companies. Round the clock CCTV and security system, high speed elevators, fire fighting system, emergency exits, telephone facilities on demand, adequate parking space, power back-up system, earthquake resistant structures and external finishing are features and facilities that the corporate buildings provide.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	There is a deep-rooted concept in the psyche of a regular Nepali that people who have their own houses are stable. “Having own building for corporate and business purpose feels no different and hence, can’t be termed as an exception,” asserts Rajbhandary. He adds, “It is high time indeed for the corporate houses to move on with their own resources.” Lamsal agrees and cites the convenience of conducting business operations from own premises as an overriding reason for the decision to have ‘Alakapuri’, Sanima Bank’s corporate headquarters. He adds, “For a bank, owning a building means a lot and having it has always been one of our priorities. We needed the building to run our business in the most efficient manner possible.”</div>
<div>
	 </div>
<div>
	The trend for owning customized buildings has emerged as a requirement for the Nepali corporate houses. To have your own building makes you feel like you have everything in your business, say experts. “You are comfortable in that building because it’s made as per your requirements and hence, it has become common for corporate houses these days to treat this factor on a prioritized basis.” The sense of pride and ownership in having one’s own office premises is a temptation that most corporate companies are finding hard to resist and one that promises to grow stronger as time passes.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	 </div>
<div>
	 </div>
<div>
	<span>Sanima Bank<br />
	<br />
	<img alt="sanima bank" border="1" height="346" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/sanimabank(1).jpg" vspace="10" width="400" /><br />
	<br />
	</span></div>
<div>
	Commonly known as Sanima Bank building, the ‘Alakapuri’ building is situated in Naxal. Designed by Architect Dr Prakash Bir Singh Tuladhar of New Progressive Designers, it has a contemporary design with structural glazing facade. While Vastu has been adhered to, it also has a fountain and basement parking. This six storied building with a total area of approximately 47,000 sq ft can accommodate up to 300 work station at one time. It also has elevator and automatic sensor doors in each floor. Approximately, Rs 350 million was invested in the building which took three years to complete and came into operation in January this year.</div>
<div>
	 </div>
<div>
	<br />
	 </div>
<div>
	<span>Butwal Power Company<br />
	<br />
	<img alt="butwal power company" border="1" height="149" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/butwal-power-company(1).jpg" vspace="10" width="171" /><br />
	<br />
	</span></div>
<div>
	Butwal Power Company (BPC), located in Buddhanagar, is designed by Innovative Createers Pvt Ltd. This nine storied building with a basement and gross area of 50,000 sq ft can accommodate up to 300 employees. While the building is mostly based on Vastu, it also portrays the Green Building concept with an objective of being LEED (Leadership in Energy and Environment Design) certified project to be issued by USGBC (US Green Building Council). The BPC building has Earth Air Tunnel with solar system for continuous hot/cold air, Wind Turbine (3KW capacity) with battery hybrid system, Anaerobic Sewage Filter System, double glazed window system for energy optimization, deep boring for water supply, and LED lights. Its underground parking system can accommodate up to 50 vehicles at a time. It has two elevators and a terrace garden of approximately 15000 sq ft in area. With open office arrangement, the building also has a pantry in each floor. Approximately, Rs 300 million was invested in the building which took three years to complete and came into operation in August this year.</div>
<div>
	<br />
	<br />
	 </div>
<div>
	<span>Bhat Bhateni Super Market<br />
	<br />
	<img alt="bhat bhateni" border="1" height="290" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/bhatbhatenisupermarket(1).jpg" vspace="10" width="338" /><br />
	<br />
	</span></div>
<div>
	The corporate building of Bhat Bhateni Super Market is situated in Tangal. With a total area of 85,000 sq ft, the building has five floors. This Seismic Resistant Structure designed by Tanka Bahadur Shrestha is also based on Vastu. The building that has a massive accommodation capacity was constructed in several phases. It has five escalators and a 13 person capacity elevator. The parking area for customers has room for 75 cars and 400 motorcycles. The building also has a 24 hours generator backup system.<br />
	<br />
	 </div>
<div>
	 </div>
<div>
	<span>Prabhu Finance Company<br />
	<br />
	<img alt="prabhu" border="1" height="340" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/prabhufinancelimited(1).jpg" vspace="10" width="400" /><br />
	<br />
	</span></div>
<div>
	The corporate building of Prabhu Finance Company Limited located in Lainchaur is designed by Dr Prakash Bir Singh Tuladhar. This contemporary building has six floors and an area of 26,300 sq ft. This building can accommodate up to 250 people at a time. A total of Rs 100 million was invested in the construction of the building that took 18 months to complete. The building has pantry, elevator and a basement parking area.<br />
	<br />
	 </div>
<div>
	 </div>
<div>
	<span>Shikhar Biz Centre<br />
	<br />
	<img alt="shirkhar" border="1" height="335" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/shikarfinancelimited(1).jpg" vspace="10" width="391" /><br />
	<br />
	</span></div>
<div>
	Shikhar Biz Centre situated in the heart of Thapathali boasts of seven floors. Designed by Vastukala Paramarsha, the building is vastu friendly. The design of Shikhar Biz Centre has a contemporary look and the owner Shikhar Insurance operates from the fifth, sixth and seventh floors. With an investment of about Rs 200 million, the building took four years to complete construction. The building has an area of 5500 sq ft and includes a small lawn and underground parking. The building has two elevators, a staircase and an emergency staircase.</div>
<div>
	<br />
	<br />
	 </div>
<div>
	<span>Rastriya Banijya Bank<br />
	<br />
	<img alt="rastriya banijya bank" border="1" height="411" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/rastriyabanijyabank(1).jpg" vspace="10" width="485" /><br />
	<br />
	</span></div>
<div>
	The design and supervision of Rastriya Banijya Bank (RBB) was done by Rachana Consulting Architects and Engineers Pvt Ltd. RBB, government owned and the largest commercial bank in Nepal, was established in 1966. According to an RBB source, a French lady was the architect of the building. Located in close proximity to Singha Durbar, the seven storied building has an accommodation capacity of 500 people. With an investment of Rs 110 million, it took two years to complete construction. The main building, built in an area of 11 ropanis, was officially inaugurated in 2055 BS. The building has a parking area, a garden and three big halls. The special feature of building is that all the rooms receive adequate natural light. The Bank also has a cafeteria for the staff and two elevators.<br />
	<br />
	 </div>
<div>
	 </div>
<div>
	<span>Lomus Pharmaceuticals<br />
	<br />
	<img alt="lomus" border="1" height="276" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/lomusparmcuticals(1).jpg" vspace="10" width="320" /><br />
	<br />
	</span></div>
<div>
	Bishnu Panthee, the Vice President of Society of Nepalese Architects (SONA) is the architect of Lomus building situated at Lazimpat. While talking about Vastu, minute details have been taken into consideration and the building has a contemporary look. It has three-and-a-half floors with an overall accommodation capacity of 80 people. It took around seven months to complete the construction of the building. Constructed with an investment of about Rs 40 million, the Lomus building built on an area of 20 annas has been in operation since the last seven years. It also boasts of a spacious parking lot and a big hall.<br />
	<br />
	 </div>
<div>
	 </div>
<div>
	<span>Siddhartha Insurance<br />
	<br />
	<img alt="siddhartha" border="1" height="368" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/siddharthainsurance(1).jpg" vspace="10" width="431" /><br />
	<br />
	</span></div>
<div>
	Vastu Kala Paramarsha designed the building of Siddhartha Insurance Limited located at Babarmahal and is vastu-friendly. The five-storied building has an accommodation capacity of 42 people on each floor. With an investment of approximately Rs 90 million, the construction started in 2066 BS and it took two-and-a-half years to complete. The building came into operation five months ago. The total area of the building is 12000 sq ft and has a double basement parking in addition to two elevators. The fourth and fifth floors of the building are used by Siddhartha Insurance. Similarly, rest of the floors are given on lease. The building has a special ‘Betel Leaf’ shape on the north east direction covering second, third and fourth floors.</div>
<div>
	<br />
	<br />
	 </div>
<div>
	<span>NMB Bank<br />
	<br />
	<img alt="nmb" border="1" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/nmbbanklimited(1).jpg" vspace="10" /><br />
	<br />
	<br />
	</span></div>
<div>
	The building and interior design of NMB Bank located at Babarmahal is done by Architecture Design Firm. The building of NMB is based on vastu and can accommodate around 250 people. The building has five floors and boasts of a contemporary look. It took around one-and-a-half years to complete the building construction, with an investment of Rs 50 million. The total land area of the building is 11529 sq ft with open space covering 6980 sq ft and plinth 4547 sq ft. The bank building has separate parking facilities for two wheelers and four wheelers. Similarly, the building has training and system rooms and has ensured efficient management of space for large number of staff in the main hall. The building also has an elevator.<br />
	<br />
	<br />
	 </div>
<div>
	 </div>
<div>
	<span>Ace Development Bank<br />
	<br />
	<img alt="ace" border="1" height="339" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/acedevelopmentbanklimited(1).jpg" vspace="10" width="400" /><br />
	<br />
	</span></div>
<div>
	The corporate building of Ace Development Bank located at Naxal in Kathmandu is designed by Architect Rajesh Shrestha from Vastukala Paramarsha Nepal. From the direction of the floor face to the positioning of different departments, the structure of the building is completely based on the instruction of Vastu expert Madhav Mangal Joshi. The four-storied building accommodates around 120 employees and is built on two ropanis while the total area of the building is 20,000 sq ft. The first phase of the construction was completed in one-and-a-half years which included the basement, ground floor and first floor. The rest of the construction was completed three months ago. The bank has utilized the space to the maximum; there is a basement with parking capacity for 27 cars, a conference hall with 100 people capacity, a garden inside the compound, and a cafeteria for the staff. It has meeting halls in each floor while rain water harvesting system makes the building unique among other corporate buildings.<br />
	<br />
	 </div>
<div>
	 </div>
<div>
	<span>Nabil Bank</span></div>
<div>
	<br />
	<img alt="nabil" border="1" height="341" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/nabilbanklimited.jpg" vspace="10" width="400" /><br />
	<br />
	 </div>
<div>
	Located at Durbarmarg, the heart of Kathmandu, the corporate building of Nabil bank has a combination of modern design and vastu. The building is designed by Design Cell Pvt Ltd and the annex building took about 12 months for the construction. The total area of the building is 53500 sq ft which has six floors including the basement. The bank shifted in the building in November 2010 which accommodates around 320 staff members. There is a roof top garden, two units of elevators and two staircases in the building. Basement parking is only meant for motorbikes while two other parking spaces behind the building are for other vehicles. The basement parking accommodates around 100 motorbikes while 40 big vehicles could be parked over the ground.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	 </div>
<div>
	 </div>
<div>
	<span>Saakha Halls<br />
	<br />
	<img alt="saakha halls" border="1" height="253" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/saakhahalls.jpg" vspace="10" width="293" /><br />
	<br />
	</span></div>
<div>
	 </div>
<div>
	The five-storied corporate building of Saakha Group located at Tinkune, Kathmandu is built as per pillar system and is contemporary in design. The building is built on 2.5 ropanis while the area of the building stretches about12500 sq ft. Since the building has window glasses on three sides, there is no need to switch on the lights during the day time. The group established their office in this building two years ago that accommodates around 200 people. There is a board meeting room, a visitors room for staff and a business room. Parking facility inside the compound is available with a capacity to accommodate 15 big vehicles and 25 motorbikes. A separate pantry for staff, a 100 KV transformer and lift facility are also part of the building.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	<span>Sarada Group<br />
	<br />
	<img alt="sa" border="1" height="278" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/saradagroup.jpg" vspace="10" width="400" /><br />
	<br />
	<br />
	</span></div>
<div>
	Sarada Group’s corporate building is located at Thapathali. Designed by Architect Rajesh Shrestha of Vastukala Paramarsha, the building is built on an area of two ropanis and stretches to 40000 sq ft. Constructed at a cost of around Rs 100 million, it can accommodate around 300 people. The building has six floors including the basement parking which accommodates around 100 motorbikes and 30 vehicles. There is also a motorbike parking over the ground within the compound area. The group is operating from the third floor of the building since the last three years and has rented other floors to various businesses. It also boasts of an elevator and generator back up.</div>
<div>
	 </div>
<div>
	<br />
	 </div>
<div>
	<span>United Traders Syndicate<br />
	<br />
	<img alt="united" border="1" height="343" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/unitedtradersyndicate.jpg" vspace="10" width="400" /><br />
	<br />
	</span></div>
<div>
	The corporate office of United Traders Syndicate, the sole distributor of Toyota vehicles in Nepal, was built more than 45 years ago. The building was further renovated 15 years ago at a cost of around Rs 50 million. Built from Nepali bricks, the building has the look of a typical Nepali house with a modern design. It accommodates around 120 staff members. The five-storied building has different departments in each floor including the Chairman’s office on the third floor, a conference hall on the fourth floor and a monitoring, controlling and processing room (MCP) on the fifth floor. The parking at the building accommodates around 30 big vehicles and 50 motorbikes. The building is built on six ropanis and also features a small garden, a workshop and a sales office.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	<span>Brihat Investment<br />
	<br />
	<img alt="brihat" border="1" height="359" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/brihatinvestment.jpg" vspace="10" width="415" /><br />
	</span></div>
<div>
	 </div>
<div>
	The corporate building of Brihat investment is designed by Architect Prathana Vaidya. The company has tried its best to incorporate every possible feature based on vastu from office cabin to its desk position. Contemporary in form, the building has features like duplex unit with eight rooms, two board rooms, executive board room and an executive lounge. Lawns, separate parking areas for motorbikes and cars, pantry and a spacious garden are also part of the building. The 3500 sq ft building took one year to complete with an investment of Rs 40 million. The company shifted in this building in 2010 which also has an elevator facility. Brihat Investment itself designed the building with the concept of an open office plan for easy and cross communication between the departments as well as to take maximum advantage of the natural light.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	<span>NIC Bank<br />
	<br />
	<img alt="nicbank" border="1" height="368" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/nicbank.jpg" vspace="10" width="448" /><br />
	<br />
	<br />
	</span></div>
<div>
	 </div>
<div>
	The Biratnagar corporate office of NIC Bank is housed in a classical building on the city’s main road. Internal layout of the building is according to Vaastu and the designing credit goes to Adf Nepal. It is a two-storied building with 17 office rooms including four different halls namely customer services, board room, trade finance and company secretary. The building is built in an area of 7290 sq ft land and the interior of the building measures 6578 sq ft. The parking space at the front is about 750 sq ft which is designated for customers while the parking space behind the building is for the staff. The building has accommodation capacity for 192 employees. There is a small garden and lots of indoor plants in the building.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	Disclaimer</div>
<div>
	 </div>
<div>
	The corporate buildings featured in this article were covered as per the following criteria:</div>
<div>
	 </div>
<div>
	<span>1)<span>       </span></span>Only the corporate buildings that were conceptualized by the owning companies/business groups themselves were taken into account.</div>
<div>
	 </div>
<div>
	2) As per the criteria, the companies were expected to have their own corporate offices in the said buildings.</div>
<div>
	 </div>
<div>
	3) Even if some parts of the buildings were rented out/ leased to other businesses, they must largely reflect the identities of the (respective) majority stakeholders.</div>
<div>
	 </div>
<div>
	Additionally, we could only cover a limited number of corporate buildings for a variety of reasons and hence, the article does not represent an exhaustive list of buildings owned by corporate entities that we have in the country.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	COVER STORY</div>
<div>
	 </div>
<div>
	 </div>
<div>
	<span>‘It’s the Need for Businesses to Opt for Skyscrapers’</span></div>
<div>
	 </div>
<div>
	<img alt="bishnu" border="1" height="323" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/bishnupanday.jpg" vspace="10" width="293" /><br />
	<strong><br />
	</strong></div>
<div>
	<strong><span>BISHNU PANTHEE </span></strong></div>
<div>
	<strong><span>Vice President </span></strong></div>
<div>
	<strong><span>Society of Nepalese Architects (SONA)</span></strong></div>
<div>
	<strong><br />
	</strong></div>
<div>
	 </div>
<div>
	 </div>
<div>
	<strong>How do you comment on the recent trend of corporate houses to have custom built office buildings?</strong></div>
<div>
	 </div>
<div>
	I believe it is a positive initiation given the unmanaged urbanization in Kathmandu. The major factors of zoning and the high and low rise structures, however, should be carefully implemented while constructing custom office buildings. Such initiatives should be approved keeping in mind the safety and security factors first. Nonetheless, there should also be proper implementation of land use maps by abiding the theory of urbanization.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	 </div>
<div>
	<strong><br />
	</strong></div>
<div>
	<strong>Tell us about the experience of SONA while dealing with the corporate houses in such matters?</strong></div>
<div>
	<strong><br />
	</strong></div>
<div>
	The main concern here is the high cost of land in Kathmandu. In rising cities like Kathmandu, such artificial hikes make it difficult for the owners to purchase land for construction. It also adds more challenges on the part of SONA. Being an umbrella association of Nepali architects, SONA has experienced several ups and downs. Sometimes, our designs have also been misused. We use theory, knowledge and modern technologies in our practice. However, we still lag behind when it comes to proper implementation of the same. Ultimately, the high cost of land causes hiccups and the projects become more expensive than is expected.</div>
<div>
	 </div>
<div>
	<strong><br />
	</strong></div>
<div>
	<strong>So what could be the solutions to minimize the risks?</strong></div>
<div>
	 </div>
<div>
	To begin with, legal measures to control the artificial price of land should be taken into consideration. We haven’t strengthened ourselves technically as well as legally. Therefore, infrastructure development should be well governed and monitored by the authorized policy makers to minimize the risks. As we are rich in antique designs, much research should be done to dig into our architectural history that is unknown to most people.</div>
<div>
	 </div>
<div>
	<strong><br />
	</strong></div>
<div>
	<strong>What are the government policies in place given that Kathmandu falls under a fragile seismic zone and is highly prone to earthquakes?</strong></div>
<div>
	<strong><br />
	</strong></div>
<div>
	The government policies don’t reveal much and are also not up to the mark when compared to the global phenomenon. The loose monitoring system and purview sometimes make it so hard for us that we have to take steps to take matters into our own hands. Besides, the lack of tight scrutiny and invigilation cause the projects to fizzle out. Nevertheless, we are doing our best to comply with the basic standards. Regarding the Kathmandu Valley part of the fragile seismic, we believe that there is a solution to every problem. For example, in the case of Japan, there are many high rise buildings and the country is prone to earthquakes. If proper monitoring, quality maintenance, awareness and utilizations are in place, then we can definitely minimize the risks involved.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	<strong>What is your comment on the trend of corporate houses opting to build skyscrapers in the current scenario?</strong></div>
<div>
	 </div>
<div>
	While analyzing the trend from a global perspective, it is the need of the hour for businesses to opt for skyscrapers. In our case, I see the skyscrapers as a welcome respite to the mismanaged urbanization. Additionally, it also minimizes the projects’ completion cost. We don’t have any viable options and must adapt to the latest technologies practiced globally.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	<strong>How is SONA addressing the unethical practices in this business?</strong></div>
<div>
	<strong><br />
	</strong></div>
<div>
	SONA is an independent non-profit and professional association of architects in Nepal. We are the voice for the architects and work to protect their rights. Therefore, we try our best to discourage any unethical practices at all times. We meet and hold discussions within the association as and when any untoward and malicious situation arises. Even though we may not take any official action, we definitely try to expose such practices in the public domain.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	<strong>How do you perceive the artistic choice of the architects themselves while building these corporate offices?</strong></div>
<div>
	 </div>
<div>
	Quite literally, SONA is here to add glitter to gold. An individual architect always strives to seek his/ her identity at some point or the other. It is our responsibility to help realize that vision for every architect. For example, if someone comes with a creative design, then we scrutinize the work and finalize the decision on a bilateral basis. Therefore, the creativity of an architect’s work can be well explored ultimately. The brand value consciousness is also a prime concern for us to safeguard the professional rights and interests of the architects.</div>
<div>
	 </div>
<div>
	<strong><br />
	</strong></div>
<div>
	<strong>What are major points to consider for ideal office buildings in commercially burgeoning cities like Kathmandu?</strong></div>
<div>
	<strong><br />
	</strong></div>
<div>
	The recently built commercial buildings in Kathmandu should be careful that the historical and cultural importance of antique buildings is not disturbed. In the quest for constructing swanky buildings, the artistic values of endangered heritages must not be compromised with. Taking it as our social responsibility, SONA has discouraged such acts. For example, we have been opposing the construction of high rise buildings around Dharahara, for example, and raising our voice to keep ancient art intact while renovating old temples across Kathmandu.</div>
<div>
	<strong><br />
	</strong></div>
<div>
	<strong><br />
	</strong></div>
<div>
	<strong>Do you think the investments made by corporate houses in constructing own buildings pay them in the long run?</strong></div>
<div>
	 </div>
<div>
	This depends on the will power of the investors to cope with the challenges ahead. Given the uncertain political state of the country and ineffective policies as regards the housing sector, our path is full of thorns. The first and foremost concern is the artificial price of land. Therefore, if these issues are properly addressed, the situation may get better for the corporate houses.<br />
	<br />
	<br />
	 </div>
<div>
	 </div>
<div>
	<strong><span>‘Owning a Building Helps a Corporate House Enhance its Brand Image’<br />
	<br />
	</span></strong></div>
<div>
	<strong><br />
	<br />
	<img alt="kumar" border="1" height="320" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/kumar.jpg" vspace="10" width="278" /><br />
	</strong></div>
<div>
	<strong><br />
	</strong></div>
<div>
	<strong><span>KUMAR LAMSAL </span></strong></div>
<div>
	<strong><span>CEO, Sanima Bank</span></strong></div>
<div>
	 </div>
<div>
	 </div>
<div>
	<strong>What is the reason behind naming Sanima Bank’s building ‘Alakapuri’?</strong></div>
<div>
	 </div>
<div>
	It is because Alakapuri refers to the state ruled by Kuber, the lord of wealth. Hence, we decided to name our building after his empire because he is worshipped as an important god when it comes to money and business.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	<strong>How do you envision the latest trend of corporate houses owning swank buildings? Do you perceive this as the need of the hour for corporate houses to construct their own buildings?</strong></div>
<div>
	 </div>
<div>
	I don’t think it is compulsory or urgent for any of us to own buildings. Constructing own building depends on one’s choice and the kind of business they run. However, I think such a trend has emerged as a requirement for corporate houses where it has become increasingly important to own a building. It is a psychological factor where owning a building makes you feel secure and gives a sense of achievement. You are comfortable in that building because you have made it as per your requirements. Hence, it has become common for corporate houses these days to follow this trend.</div>
<div>
	 </div>
<div>
	<strong><br />
	</strong></div>
<div>
	<strong>Specifically speaking, what is it that led Sanima Bank to construct its own building?</strong></div>
<div>
	 </div>
<div>
	For a bank, owning a building means a lot. It leaves a good impression on the public in terms of an enhanced brand image. A bank usually works for a long term and since we are here in this business for a long time now, having our own building has had been one of our priorities. We needed the building mainly to run the business properly.</div>
<div>
	Could you please tell us about the investment that has been made in the construction of your new premises?</div>
<div>
	We have invested around Rs 34 million on the construction of the building which took three years for its completion.</div>
<div>
	<strong><br />
	</strong></div>
<div>
	<strong>Do you think the investments made in their own buildings pay the corporate houses in the long run?</strong></div>
<div>
	 </div>
<div>
	Constructing your own building itself is a long term investment for the corporate houses. It directly relates to the image of the company that can neither be built nor destroyed in a day. Although our cost is higher in comparison to the cost in the rented building that we operated from earlier, the benefits are for many years to come. We have indeed spent a huge amount in constructing the building but in the long run, that cost will be compensated in due course of time. People usually perceive a corporate house to be enjoying a certain standing if it owns a building. And the good news is; our building has started attracting walk-in clients already.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	<strong>How significant is it for you to have constructed your own corporate building and then conducting business operations from it?</strong></div>
<div>
	 </div>
<div>
	It has been significant for us primarily because we have constructed it as per our demand and design. It is based on our choice and the way the building has been constructed meets our business demand too. We are very happy to be operating from our own office and it has certainly fulfilled our expectations. Its interior design is as good as the exterior design and has more space. It is also an attractive and strong structure while the previous building was small and congested. At the end of the day, it is easier to conduct business operations from ‘Alakapuri’.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	<strong><span>‘It’s High Time for Corporate Houses to have their Own Resources’<br />
	<br />
	<br />
	<img alt="om" border="1" height="338" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/om.jpg" vspace="10" width="294" /><br />
	<br />
	</span></strong></div>
<div>
	<strong><span>OM RAJBHANDARY </span></strong></div>
<div>
	<strong><span>Chairman, Brihat Investments Pvt Ltd</span></strong></div>
<div>
	 </div>
<div>
	<strong><br />
	</strong></div>
<div>
	<strong>How old is the trend of corporate entities in Nepal moving from rented premises to their own building?</strong></div>
<div>
	<strong><br />
	</strong></div>
<div>
	If we look at the corporate culture in Kathmandu, much of the credit for this trend goes to the banking sector. They initiated it and for around 15 years now, corporate houses started having their own buildings in Kathmandu. Earlier, it was limited because most of the businesses were family-run entities. Most of the corporate houses today boast of their resources within their own premises.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	<strong>How do you envision the latest trend of corporate houses owning swank buildings? Do you perceive this as need of the hour for corporate houses to construct their own buildings?</strong></div>
<div>
	 </div>
<div>
	Yes it is high time for the corporate houses to move on with their own resources. The vital aspects of a business - property, productivity and perception should not be forgotten at any point of time. While on one hand, we lack productive infrastructure, we are keeping a tight vigil even on minor things like the use of electricity and interior designs on the other. For the entrepreneurs to start new businesses, they must increase the size of their functional area to strengthen productivity. If property area and services planning etc are not done properly, the expenses are going to be that much higher. In the present context, these things amount to savings because of the one-time investment one is putting in. Besides, people’s perception of you is different when you are staying in a rental office and don’t have your own resources. According to our traditional concept, we believe that people who own a house are stable in life. Having one’s own space in the office and possessing the premises saves on the rental.</div>
<div>
	 </div>
<div>
	<strong><br />
	</strong></div>
<div>
	<strong>What is it that led Brihat Investment to construct its own corporate office building?</strong></div>
<div>
	 </div>
<div>
	Brihat is striving to construct environment friendly homes to cater the need of people and to help non-hazardous urbanization. Using your own resources makes the working environment more conducive and also boosts the workers’ spirits. That is the main reason for Brihat Investment to construct its own building.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	<strong>What would be an ideal investment for a corporate building?</strong></div>
<div>
	 </div>
<div>
	The cost depends on requirements and clear vision. The specific need of area, infrastructure and manpower should be the prime aspects to take care of rather than the monetary value itself while investing. Even the minute things like color choice, material choice, electricity and interior designs should be well scrutinized to minimize the ultimate cost. The choices should be clear and cost effective. For example, the trend of using LED lights is for a tangible benefit. If we move forward in a balanced way, it will not be a huge financial burden in the long run.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	<strong>How significant is it for you to have constructed your own building and then conducting business operations from the premises?</strong></div>
<div>
	 </div>
<div>
	When you own a building, all the requirements are met accordingly. People look at safety as the least concerned factor. That is wrong attitude. As Kathmandu lies in an earthquake prone area, certain safety measures should be taken into consideration. The distribution of things according to the need and demand is like an art. Good management is like oxygen, we should have proper utilization of our resources to get palpable benefit. If the structural cost comes around 10- 15 per cent, the cost for safety measures and needed infrastructure only takes an additional three per centof the building cost. Hence, having your own building is of great significance.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	 </div>
<div>
	<strong>Do you think the investments made in own buildings pay the corporate houses in the long run?</strong></div>
<div>
	 </div>
<div>
	This highly depends on the political and economic situation of the country. The real estate business is not going well at present as it used to be few years back. In reality, every flourishing business pays back to the society. Here, the fluctuating political situation and unmanaged policy has affected the business a lot. If the period of uncertainty continues, then the entrepreneurs will be forced to switch over to other business. Recently, some big hotels of Kathmandu have been turned into shopping malls and it can be taken as a good example. With regular and periodical review and a long term vision, the investment in owning buildings will certainly pay off for corporate houses in the long run.</div>
<div>
	 </div>
<div>
	 </div>
<div>
	<strong><br />
	</strong></div>
<div>
	<strong>How challenging is it for you to keep abreast with the growing demand for new designs?</strong></div>
<div>
	 </div>
<div>
	It is challenging but the investors and the designers need to have more healthy discussions on this matter to mitigate those challenges. To me, innovative ideas come first. If a designer is precise about his ideas, he should persuade me to pursue his idea. There should be a fine balance between the designer and the building owners.</div>
<div>
	 </div>',
			'published' => true,
			'created' => '2012-12-06',
			'modified' => '2013-01-04',
			'keywords' => '',
			'description' => 'Corporate houses in Nepal are attracted towards having their own buildings with a vision to make business operations easier and less time consuming among a host of other reasons. The trend of getting customized buildings constructed has caught up fast with the corporate entities in the last one-and-a-half decade or so, observe analysts.',
			'sortorder' => '630',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 9 => array(
		'Article' => array(
			'id' => '718',
			'article_category_id' => '40',
			'title' => 'Labour Dilemma',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
<!--[if gte mso 9]><xml>
 <w:WordDocument>
  <w:View>Normal</w:View>
  <w:Zoom>0</w:Zoom>
  <w:TrackMoves/>
  <w:TrackFormatting/>
  <w:AutoHyphenation/>
  <w:PunctuationKerning/>
  <w:ValidateAgainstSchemas/>
  <w:SaveIfXMLInvalid>false</w:SaveIfXMLInvalid>
  <w:IgnoreMixedContent>false</w:IgnoreMixedContent>
  <w:AlwaysShowPlaceholderText>false</w:AlwaysShowPlaceholderText>
  <w:DoNotPromoteQF/>
  <w:LidThemeOther>EN-US</w:LidThemeOther>
  <w:LidThemeAsian>X-NONE</w:LidThemeAsian>
  <w:LidThemeComplexScript>X-NONE</w:LidThemeComplexScript>
  <w:Compatibility>
   <w:BreakWrappedTables/>
   <w:SnapToGridInCell/>
   <w:WrapTextWithPunct/>
   <w:UseAsianBreakRules/>
   <w:DontGrowAutofit/>
   <w:SplitPgBreakAndParaMark/>
   <w:DontVertAlignCellWithSp/>
   <w:DontBreakConstrainedForcedTables/>
   <w:DontVertAlignInTxbx/>
   <w:Word11KerningPairs/>
   <w:CachedColBalance/>
  </w:Compatibility>
  <w:BrowserLevel>MicrosoftInternetExplorer4</w:BrowserLevel>
  <m:mathPr>
   <m:mathFont m:val="Cambria Math"/>
   <m:brkBin m:val="before"/>
   <m:brkBinSub m:val="--"/>
   <m:smallFrac m:val="off"/>
   <m:dispDef/>
   <m:lMargin m:val="0"/>
   <m:rMargin m:val="0"/>
   <m:defJc m:val="centerGroup"/>
   <m:wrapIndent m:val="1440"/>
   <m:intLim m:val="subSup"/>
   <m:naryLim m:val="undOvr"/>
  </m:mathPr></w:WordDocument>
</xml><![endif]--></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A14"><span style="font-family: ">By Gaurav Aryal</span></span></span></p>
<p>
	<span style="font-size:14px;">&nbsp;</span><span style="font-size:14px;">&nbsp;</span><span style="font-size:14px;"> </span></p>
<p class="Pa9">
	<strong><span style="font-size:14px;"><span class="A15">Labour Dilemma </span></span></strong></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span class="A34"><span style="line-height: 115%; font-family: ">An Analysis of Labour Issues Facing Nepal</span></span></span></strong></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span class="A34"><span style="line-height: 115%; font-family: ">&nbsp;<img alt="labor cover story" border="1" height="495" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/cover2.jpg" vspace="10" width="400" /></span></span></span></strong></p>
<p class="Pa25">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:normal"><span style="color: rgb(34, 30, 31);">On the eve of celebrating Nepal Investment year 2012/13, over unionisation of labour has continued alarming foreign investors and discouraging local investors to venture into new industries. Multiple unions affiliated to more than one political party exist within a company. Such politicisations of labour unions have resulted in inter union and employee-employers rifts that significantly reduce productivity along with losses of working hours. </span></b></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:normal"><span style="line-height: 115%; color: rgb(34, 30, 31);">Political instability, labour problems and power supply are said to be the major causes of poor investment climate in Nepal. According to a survey report of 2009 conducted by enterprisesurveys.org, political instability is the major constraint for doing business followed by power shortage and labour problems respectively.</span></b></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:normal"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;<img alt="political " border="1" height="270" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/cover1(1).jpg" vspace="10" width="257" /></span></b></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A4">A</span><span style="line-height: 115%; color: rgb(34, 30, 31);">ccording to Bishnu Rimal, President of General Federation of Nepalese Trade Unions (GEFONT), there are 353,000 individual members of GEFONT and altogether 29 affiliates. Similarly, there are 800,000 members in All Nepal Trade Union Federation (ANTUF) which has 42 different professional organisations as affiliates., There are around 286 trade unions registered at the Department of Labour (DoL) that are affiliated to 10 trade union federations. A total of 86 new unions have been added after the People’s Movement II, six years ago, when there were 200 unions in the fiscal year 2005/06. According to Manish Agrawal, Vice Chairman of Employers Council at FNCCI, there are 10 authorised trade unions (including GEFONT and ANTUF) at national level in Nepal and they are all affiliated to different political parties. These unions themselves are divided into different categories according to the nature of industry. There are separate unions on tourism, hospitality, service industries, banks and financial institutions and manufacturing sector rather than having branches of a unified labour union that represents overall workers from the entire business sector. <br />
	<br />
	According to World Bank data, labour unrest is one of the contributing factors for adverse investment climate. According to the Global Competitive Index 2012/13 prepared by the World Economic Forum, inadequately educated workforce is one of the major hurdles for doing business in Nepal. The same report ranks Nepal at 125th position on labour market efficiency out of 144 countries. Likewise, poor work ethic in national labour force was placed at 8th most problematic factors for doing business in Nepal.</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">In addition, restrictive labour regulations was placed in the 5th position under the same category. A report by Nepal Business Initiative (NBI) with support of South Asia Enterprise Development Facility presented to the Prime Minister in the last week of September, labour problem ranks as one of the major challenges faced by the Nepali economy. Similarly, the Global Competitiveness Report 2012–2013 lists various aspects related to the labour market of Nepal and their efficiency and their world ranking.</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">(See table).</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);"><img alt="table coverstory" border="1" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/table(1).jpg" vspace="10" />&nbsp;</span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">In nutshell, if the ongoing problem of power shortage is resolved today, labour problem will come up as the biggest hurdle to beat, for making the overall investment environment favourable for new investors and existing corporate houses. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa14" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Wrong Message to Investors </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">The never ending labour problems have given unintended messages to the local as well as foreign investors who are willing to venture into Nepal. Recent dispute in KFC and Pizza Hut has definitely given a wrong message to interested foreign investors. Similarly, Shikhar Shoes was closed after workers manhandled the Managing Director of the company and padlocked its factory at Goldhunga. It seems that labour unrest, one of the major roadblocks to higher investment, will continue unabated in the future too. </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">An investor usually looks to invest where there is favourable business environment. Experts believe that the labour issues have created a hostile environment to investments. Labour trouble experienced in Nepali units of multinational giants like Surya Nepal, Unilever, GMR and Asian Paints have turned off prospective investments to Nepal. A handful of such representative cases are enough to scare away either domestic or foreign investors. Khila Nath Dahal, Former Co-president of Nepal Trade Union Congress Independent (NTUC-I) and former President of Democratic Confederation of Nepalese Trade Union (DECONT) denied, “It is a false assumption that labours are the cause to repel the investment. Labours, investors themselves and the government policy. have roles in r creating threat to investors venturing new business in Nepal. Lack of infrastructural development like roadways, electricity and drinking water has also affected investment.” </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">However, Rimal claims that industrial strikes are in a decreasing trend. He said, “After 2008, the number of industrial strikes has been decreasing. Trade unions have contributed to only six per cent of the total work stoppages last year as around 28 per cent cases of such work stoppages were due to bandhas called by employers and the rest was contributed by political parties and other organisations.” </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Still, leading corporate houses like Chaudhary Group, Golchha Organisation, Dugar Group, among others say that due to unfavourable environment for the manufacturing sector, they have identified service sector as safer areas for investment. Service sector, except from tourism and hospitality, sees very few cases of labour strikes and union problems. These corporate houses have been minimising their foothold on manufacturing sector and moved onto the service sector like hospitality, education, banking and finance, healthcare among others. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp; <br />
	</span></p>
<p class="Pa14" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Over Politicisation of Workers </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Naturally, the private sector companies look to make profits. When the workers are involved in union activities, more than working for the company, it adversely affects the productivity. So, a voice for ‘No Work No Pay’ was raised by the entrepreneurs but it has not been implemented till date as trade unions have strongly opposed this proposal. </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Agrawal said that as per the international norms, the identity of a labour is associated with the industry. “On the contrary, the identity of the worker in Nepal is associated with the trade union to which they belong,” he clarified. </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Due to frequent strikes and even physical assault upon the employers and managers has led to closure of factories and companies. Foreign investors have shut down their industrial units and reduced their presence in the country. Agrawal said that Colgate-Palmolive is one such example. “Nepal is losing many investors because of labour problems. Recently, Surya Garment was also shut down due to labour problems,”. he said. However, Dahal says, “If the demands of employees are fulfilled they would not choose violent way to fulfil their demands. If one side does not provide basic rights of employees as stated in the Labour Law, then the other side would definitely not follow law and order also. This consequently results into imbalance between the employers and the employees.” </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">In many cases, once an issue is resolved at a point of time and place, even more severe ones are raised at the next point of time and place. Numerous industries have closed down and, looking at the recent examples of KFC and Pizza Hut, it cannot be ruled out that similar situation won’t arise in other companies too. </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Unruly unions are protected by the political parties who don’t tire talking about importance of bringing foreign investments. Different unions that belong to different political parties come up with different demands, mostly as dictated by the respective political party. Thus, there is conflict of interest and opinions among the unions themselves. They are primarily guided by party philosophy rather than working for creating a win-win situation for both employers and employees. Agrawal said, “The major problem of the trade unions in Nepal currently is that they are focused on following political ideologies of associated political parties rather than fulfilling the interests of workers.” </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">According to Agni Prasad Thapaliya, Judge at the Labour Court, one union does not allow formation of second union in the company. “In most cases, employees are not allowed to work without taking membership of a trade union and paying a levy to the union and inter-union rivalry has also become problematic. The same person is found involved in numerous unions,” he said. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa14" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Strange Demands </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">In a series of recent events, workers have come up with weird and strange demands. Labour unions at Hotel Greenwich Village, a three star hotel in Lalitpur, recently came up with a demand that their members be felicitated with a gold medal weighing one kilogram. Labour unions affiliated to the Maoists (the party that is leading the present coalition government) and CPN-UML party are pressing the hotel management submitting a 22 point demand paper.. According to the demand paper, employees who have been working for more than 20 years in the hotel should be presented gold medals each weighing more than a kg. Prabin Acharya, Deputy Managing Director at the hotel said, “It is natural to demands an increase in remuneration and compensation but a demand like this was unheard of earlier.” The hotel has resumed its operation.</span> <br />
	</span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Similarly, workers at Thai Airways Nepal office have presented an ultimatum with various absurd demands like paying their income taxes by the airline. Such activities have become a threat to the need of the day – increase investment that will have forward linkages to employment and overall national economic growth. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa14" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Legalities of Strikes </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Although Nepal too has a legal procedure to a strike, there are very few cases of complying with these procedures before a strike is held. Thapaliya said that most of the strikes are organised without following the legal procedure. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">However, the trade union leaders deny this charge. Rimal says that the legal procedure of strikes is not violated. “Labour laws are not violated in recent years. However, if employers and employees both are found defying the law, they should be brought under the book.” </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Shalikram Jamakattel, President of ANTUF says, “Strikes which are not in accordance with the law make workers’ case weak. Therefore, they go for the strikes according to the law unless there is a compulsion.’ </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">According to Thapaliya, the due process requires prior information about the strike. If the management does not settle the issues, then it is taken to the labour office, where both parties – the workers and the management - sit for dialogues. “If the dialogues do not resolve the issue, the workers should give a 30 days ultimatum. If the management does not resolve the issue even by the end of such 30 days, the workers can go for strike,” he adds. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa14" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Collective Bargaining </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Collective bargaining in Nepal is commonly focused on demanding additional facilities, mostly wages and other fringe benefits that often includes strange demands like that in the cases of Thai Airways and Greenwich Hotel. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">It is quite natural to adopt unique bargaining standpoints by the workers according to different types of companies. However, at times, workers are alleged to have come up with insatiable demands that can be hardly fulfilled by the employers. Thapaliya said that workers are often overambitious and their demands revolve around the political ideologies to which the union is affiliated, rather than relating to the overall benefits for workers. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">However, Rimal explains this differently. “I think the approach that we follow for collective bargaining is correct. We conduct collective bargaining at the central level for minimum standards like wage determination and finalise it there. Collective bargaining for maximum standards is done at the enterprise level and we think such standards should be different in different enterprises. Multinational companies have high paying capacity so we demand more from them whereas we demand less from companies that have less income and profits.” Jamakattel complains that collective bargaining is not conducted as promised in the policies. “Labours in industrial sector do collective bargaining every two years but it has not been managed systematically. Unless new labour law is made, these problems cannot be managed.” </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Agrawal on the other hand complains that there has not been effective collective bargaining as it is affected by the overruling political ideologies of trade unions they are affiliated to. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa14" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Employment Security </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Trade union leaders also complain that many employers do not provide appointment letters. Dahal says, “The law guarantees a system of providing appointment letter to employees as soon as they join a company. But there are many employees who have not received their appointment letters. Thapaliya too has the same comment to make. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Labour law also states that an employee who has completed 240 working days should automatically become a permanent employee. However, there is a system of provisional period as well. If the employer finds the performance of an employee unsatisfactory, the employer has the right to terminate the service of such employee at any time during the probation period. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">A minimum wage is fixed at Rs 6,200 per month. But many employees arereceiving less than this, complains Dahal. Therefore, he claims, more than fifty per cent of the labour strikes have been aimed to implement such provisions of the labour laws. Labour law also requires that the salary should be revised every two years. Also, this provision is neglected by employers, adds Dahal. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Out of nearly half a million youths that enter the Nepali employment market every year, around 305,000 are going abroad for jobs. According to the Central Bureau of Statistics, there are around 11.7 million people in the workforce and only 1.8 million of them are in the formal sector jobs within the country while about 3.5 million are employed abroad. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp; <br />
	</span></p>
<p class="Pa14" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Act Amendment </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Both employers’ organisations and trade unions have been demanding amendment in the Labour Act. Both believe that to maintain cordial industrial relations, the Act urgently needs amendments.. Still, the leaders of these trade unions claim that half of the existing disputes could be resolved with the existing laws if executed properly. However, Rimal) is hopeful that the proposed amendment to the Act will address the issues of daily-wage workers and those working in the informal sector. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">And it has been around 10 years since the government begun planning to amend the labour laws. Both employer’s organisations and trade unions want the law amended. However, their respective demands are different and some of them even conflicting. Employers are demanding the inclusion of provisions like ‘No Work No Pay’ and ‘Hire and Fire’ while trade unions are demanding setting minimum wage also for informal sector. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">But there are other issues as well to be incorporated in the labour law. Thapaliya says, one such provision needed is for a tripartite commission to resolve issues that could not be addressed through collective bargaining. He suggested that the informal sector too should have rules and regulations that address issues of manual labours like minimum wages, contract system, working hours and provision of social security. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa14" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Merger of Unions </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Another labour sector issue being intensely discussed these days is the merger of trade unions. During a recent function organised by GEFONT, Sharan KC, Regional Coordinator for South Asia at Trade Union Solidarity Centre of Finland (SASK) said that Nepali trade unions should merge with each other so that they become stronger and influential. He also shared examples of merger of unions in the international arena. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Employers too are positive about this proposal. Agrawal believes, “The presence of more than two trade unions within an enterprise has been creating a very difficult working atmosphere. It divides the workers into different ideologies.” He added, “There should be only one trade union for one enterprise.” </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">FNCCI is planning to form an Industrial Relations Forum involving all the presidents of major Trade Unions, industrialists and President of FNCCI. He informed, “It will be a platform to discuss the emerging issues of labour and industrial relationships. The forum will work towards safeguarding the rights of both employers and employees.” </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp; <br />
	</span></p>
<p class="Pa14" style="margin-top:5.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">State’s Role </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;<span style="line-height: 115%; color: rgb(34, 30, 31);">Both the employers and employees are found unanimous on the state’s role for resolving the problems in industrial relations. As the government has a major responsibility to protect the investments in the country, it becomes the state’s responsibility to protect investors, when needed, from unlawful activities carried out by trade unions as well. Agrawal cites an example of Maruti Suzuki in India where the state came forward to provide such protection. During the recent labour strike there, the management team was beaten up by the labourers, and the Indian police deployed 500 rapid action forces. “This shows the level of concern the government has shown towards the investors. This action showed that Indian government will not tolerate repetition of such activities.. If Indian government can do it, the Nepali government too can do it,” he says. He said, “Sense of insecurity is the major problem that the investors are facing now due to the inability of the government to take actions when trade unions behave illegally.”</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;</span></span></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span class="A37"><span style="line-height: 115%; font-family: ">Upper Karnali Project</span></span></span></strong></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A37"><span style="line-height: 115%; font-family: ">&nbsp;<img alt="upper karnali" border="1" height="85" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/upperkarnali.jpg" vspace="10" width="144" /></span></span></span></p>
<p class="Pa7" style="text-align:justify">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Energy Limited, GMR Infrastructure Limited (GIL) and Italian-Thai Development Project Company had signed a Memorandum of Understanding (MoU) with the Government of Nepal, for development of 900 MW Upper Karnali Hydro electric Project. The project was set to develop under a Build, Own, Operate and Transfer (BOOT) basis. The plant was targeted to be commissioned by the end of 2016. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">The attack on Indian infrastructure and energy major GMR’s power project in western Nepal by Maoists delayed the 900 MW hydropower project to meet its 2016 completion date. The nearly $469 million project’s environmental impact assessment was on the verge of completion when the attack occurred. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Upper Karnali Hydropower Project’s camp site in Dailekh district was burnt down. The act of arson and vandalism destroyed all the three pre-fabricated buildings in Dailekh, including the GMR site office with its computers and documents. The fear of further attacks and the pulling out of all personnel was said to have caused the delay to go up further, causing an escalation in costs as well. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Soon after the attack, the second in two months, GMR’s director G Subba Rao and Harvinder Manocha, GMR Energy’s associate vice-president as well as country director for Nepal, held talks with Nepal’s erstwhile Energy Minister Gokarna Bista and all lawmakers from the three districts spanned by the project - Dailekh, Accham and Surkhet. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Besides Dailekh, Accham and Surkhet, GMR’s projects in Nepal, including the 600 MW Upper Marsyangdi, have been regularly threatened by the Maoists with their top leaders demanding that their licenses be scrapped. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">The Independent Power Producers’ Association of Nepal warned the government in a press statement that such attacks would demolish investors’ confidence in Nepal. Facing an 18-20 hour daily power cut during the dry winter and summer seasons, Nepal has been banking on the Upper Karnali project to ease the power crisis within the next five years. GMR Group is a Bangalore headquartered global infrastructure major with interests in Airports, Energy, Highways and Urban infrastructure.</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;</span></span></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span class="A37"><span style="line-height: 115%; font-family: ">Surya Nepal Textile</span></span></span></strong></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A37"><span style="line-height: 115%; font-family: ">&nbsp;<img alt="surya nepal" border="1" height="91" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/suryanepal.jpg" vspace="10" width="160" /></span></span></span></p>
<p class="Pa7" style="text-align:justify">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Established in 2004 with an investment of approximately Rs 700 million, Surya Nepal Private Limited’s garment manufacturing unit - Surya Textile Industry - had been providing jobs to 608 workers directly, while the number of workers indirectly related to textile industry was more than 1,000. </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Remunerations demanded by workers for the eight days strike that took place in mid-April 2011 and the management’s refusal to provide any remuneration, under the “no work no pay” provision, in the long run turned out to be the main reason for the permanent closure of Surya Textile. Workers didn’t agree with the “no work no pay” pact arguing that they were present inside the industry’s premises during the strike but could not work, because the industry itself was closed. This way, arguments and counter arguments continued and it deepened the conflict between management and labourers. On June 14, the situation worsened when factory workers, under backing from major trade unions, locked up 42 officials of the management without food and water supply for more than 24 hours. Finally, police had to rescue the captivated officials forcefully, because the major trade unions wanted their demand to be fulfilled immediately, or else they were not ready to release the officials. During the rescue clash, 8 labourers and 12 policemen were injured. After the officials were rescued, the management announced an indefinite closure of the industry effective from June 15 itself. </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;<span style="line-height: 115%; color: rgb(34, 30, 31);">Since June 15 to August 17, the industry remained closed during which labourers and even the trade unions demonstrated to re-open the industry but the management continuously refused to re-open citing unfriendly industrial climate and security problems. Finally, an agreement was reached among representatives of Morang Industry Organisation, Trade Unions and Surya Nepal to shut down the industry permanently paying Rs 29,800 as lay-off benefits to each worker and also according to agreement, the laid-off workers will be given priority as per the workers’ efficiency and capacity if the company comes up with new venture or resume its factory again. The security problems, militant trade unionism and their irrational demands, according to the management, forced the company to permanently close the textile industry. Irrespective of many other cases where monthly wage is the main cause of rift between management and labourers, Surya Textile was an exception. Sanjiv Keshava, Surya Nepal’s Managing Director, claimed themselves as good paymaster and explained that they paid almost double the amount stated in the minimum wage.</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;</span></span></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span class="A37"><span style="line-height: 115%; font-family: ">KFC and Pizza Hut</span></span></span></strong></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A37"><span style="line-height: 115%; font-family: ">&nbsp;<img alt="kfc and pizza hut" border="1" height="82" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/KFC.jpg" vspace="10" width="144" /></span></span></span></p>
<p class="Pa7" style="text-align:justify">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">Outlets of international fast food chains KFC, Pizza Hut and Cream Bell resumed operation on September 17, 2012 after a three point agreement between the workers and the management. KFC, the biggest fast food chain in Nepal, had remained closed for over a month. On August 14, 2012 Devyani International, a subsidiary of Varun Beverages which operates outlets of KFC and Pizza Hut in Nepal had written a letter to authorities with announcement of immediate closure of all the four KFC and Pizza Hut restaurants running in the capital. “In order to disrupt our operations, some staff have physically attacked and threatened to kill the senior managers,” the letter read. </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">The settlement of dispute took nearly a month’s time because the management was seeking action against those law breakers who threatened to kill the managers. Moreover, it was demanding a commitment from the workers on not repeating such violent behaviour again. The management of the company decided to reopen the outlets after taking action against 22 staff who manhandled a senior manager of the company. Yogendra Kumal, Joint Coordinator of All Nepal Trade Union Federation (Revolutionary); Tika Subedi, Vice President of ANHWU-R; Nawaraj Bhatta, President of ANHRWU-R´s Devyani International Nepal unit and Vishnu Reddy, Country Manager of Devyani International, signed the pact. As per the agreement, the trade union will make all the staff obey rules and regulations of the company and will not object if the management takes action on those violating the company´s rules. Likewise, the management agreed to respect the trade union rights. On August 29, the workers registered ANHRWU (All Nepal Hotel and Restaurant Workers Union-Revolutionary). </span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;<span style="line-height: 115%; color: rgb(34, 30, 31);">The fast food chain had been talk of the town since there was a dispute over the formation of a trade union. According to the sources, the management and its employees started crossing swords with each other in August after cadres of the Mohan Baidya led CPN-Maoist goaded the staff into forming the party’s trade union. The five outlets used to record average daily turnover of Rs 800,000. According to the senior managerial staff at KFC Durbarmarg, the company suffered a loss of around Rs 30 million including loss of perishable goods.</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp; <br />
	</span></span></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span class="A38"><span style="line-height: 115%; font-family: ">‘Activities of Trade Unions and Employers are Guided by Traditional Mentality’</span></span></span></strong></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span class="A38"><span style="line-height: 115%; font-family: ">&nbsp;<img alt="agni parajuli" border="1" height="292" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/agni.jpg" vspace="10" width="253" /></span></span></span></strong></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A0">AGNI PRASAD THAPALIYA<br />
	Judge <br />
	<span style="line-height: 115%; font-family: ">Labour Court</span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A0"><span style="line-height: 115%; font-family: ">&nbsp;</span><b style="mso-bidi-font-weight:normal"><span style="line-height: 115%; font-family: "> <br />
	</span></b></span></span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">How do you view the current labour situation as a judge of Labour Court? </span></b></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Labour court gives its verdict on a legal basis on the disputes whatsoever comes to the court. The labour statutes have envisioned secured employment, secured employees and guarantee of social security. Looking at these, it seems that our law is labour oriented to some extent because it has made provision of secured work for workers. But in practice, workers are forced to work for a company for a long time without an appointment letter. In many cases, they don’t even have attendance files and they are not even given identity cards. To file a case in the court, one must be able to produce evidences. There must be some evidences like employment letter, identity card, payslip or attendance registers. In some case, none of these are existent. There are cases where people are put to work like bonded labours. Companies must formally employ its workers with proper documentation that clearly mentions post, type of work, job description and remuneration, according to the legal provision. There are cases where employers have not followed these rules. Based on available documents and evidences, we have made verdicts in the favour of employees. In some cases, we have not been able to reinstate the workers. Similarly, to employ foreigners in Nepal, having a work permit from the Department of Labour is a must when the company has to hire foreigners. But a research I have conducted shows that around 20 per cent employees are working without permit in the bordering areas. Similarly, around 48 per cent employees are put to work sans contract papers. There is also disparity on salary of males and females. There are also cases of sexual harassments at work. In the absence of provision to address sexual harassment in our labour law, decision made by the management of a company has been endorsed also by the court and in some cases; international law is also put into practice. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;<b style="mso-bidi-font-weight:normal"> <br />
	</b></span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">What is the annual number of cases that are filed in the labour court? </span></b></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Most of the cases reinstated in labour court are about unlawful dismissal of employees. In many cases, the misconduct is not established while in some cases there are shortcomings in the job done by the workers. There are situations when the workers have to be reinstated if misconduct is not proved or employees are not allowed an opportunity of clarification. There were 103 verdicts made last year through the labour court and 84 cases were appealed against the actions of proprietors or against decisions of Labour Offices. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;">&nbsp;<b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">It seems that labour unions are guided by political ideologies rather than for the benefits of workers. How do you view this?</span></b></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">&nbsp;Politics has also made inroads into civil service and police while it was common in the private sector. But, this is sad. It is said that a manager accuses member of another trade union with the help of one union. Such practices do not benefit the private sector. Activities of trade unions and employers show that they are guided by a traditional mentality though the overall national political and economic situation has changed with time. Employers have not got rid of their bossy nature. Although the law mentions a proper procedure to hire employees, the regulation is not properly followed. But employers or proprietors have not followed the legal procedures, so, there is the problem. Similarly, workers too are overambitious. Due to political reason, and over ambition of workers, without understanding the financial condition of the industries and even the economy, workers always want to be benefitted and enjoy attractive facilities. World history shows extreme cases of exploitation of labour and industrialists too suffered a lot but we don’t have such a situation. Our situation is definitely better. Our law addresses almost every issue of the formal sector. Both the parties have their own standpoint, so, the private sector and investment is in dire straits. This has increased the chances of capital flight. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;">&nbsp;<b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">What is the process of collective bargaining? How much have Nepali trade unions complied with the legal provision? </span></b></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Collective bargaining does not come under jurisdiction of the court. Agreements made based on collective bargaining are implemented equivalent to law. Though agreements made are implemented, in most of the cases the major problem is, agreements cannot be made. To resolve such issues, a dispute resolution body needs to be formed. As we are under the tripartite model recognised by the ILO, the personal disputes are resolved by the court while collective disputes are not solved through negotiation between employees and proprietor in the presence of Labour Office. After that, a mediator may be appointed through the consent of both parties who can settle dispute through mediation. In case the mediator fails to settle the issue, employees can file ultimatum to go on a strike. On the other hand, employers can lockup his/her business in case s/he has been unsatisfied by the complaint of employees. So, our labour law does not address effective mechanism for resolving collective issue. It is a lacuna in our law. In the absence of an authentic body to settle collective issues, the private sector is not moving ahead as it should have. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">What are the legalities of industrial strikes? Do you see those legalities followed by unions as well as companies? </span></b></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">The process of strike has not been followed at all. A negligible number of strikes are organised following the legal procedure. Most of them are organised all of a sudden. The process involves prior information about the strike. If the management does not settle the issues, then the issue is taken to the labour office where they can sit for dialogues. Even if the dialogues do not resolve the issue, a mediator can be appointed by the consent of both parties. In case, the mediator fails to settle issues or there is no understanding on appointing a mediator, labourers can go for strike but again a 30 days ultimatum should be given. When the management body does not listen to the demand within the ultimatum, strikes can then be organised. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">It is said that judiciary has been making pro-labour decisions. What is your take on it? </span></b></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Labour issues are not criminal cases. An Indian pioneer on labour law, Gulzarilal Nanda said that if the labour cases are treated on the basis of whoever produces more evidences, you are not trying to give justice to the labourers. Likewise, if a convict gets the benefit of doubt and the judge maintains silence or acts like an umpire to see which party will produce more evidences, then the justice is denied. So, a labour court judge must find out the facts and evidences. The employer always looks to employ workers at minimum facilities and make higher profit. So, the labour law procedure is quite different in nature. In the labour court, a judge must be active enough to guarantee justice. Investors feel that they must have absolute power over employees to protect their investments. In cases against employers that do not fulfil the legal procedure, justice is given in favour of labourers rather than of the employers. In numerous cases it is found that workers are alleged of wrongdoings when actually they have not committed mistakes. Even if they have committed misconduct; they are not given a chance for clarification. In such cases, decisions made by managers are reverted by the court. Therefore, when employees win the case, the industrialists say that verdicts are being labour oriented but it is not true. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp; <br />
	</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">A voice for amendment of labour law is being raised. Do you think the amendment is really needed? </span></b></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Compared to the law of other countries, one thing that needs to be incorporated into the labour law is – making a provision of a tripartite committee or commission to sort out issues that are not resolved through the collective bargaining procedure. The law must mention a certain mechanism to resolve the collective disputes. In least developed countries like Nepal, there is presence of a strong informal sector. A huge number of employed people in these sectors are in the form of manual labours like agricultural workers and household workers. The workers are still working like bonded labours. Therefore the informal sector too should have certain rules and regulations. So, there should be a regulation that addresses their minimum wages, contract system, working hours and provision of social security. As we have moved into a democratic system and become the part of the network of the UN, we have to timely and properly address these issues and control inhuman activities too. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">It is alleged that feeling of insecurity prevails in the labour court. To what extent is it true? </span></b></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;">&nbsp;<span style="line-height: 115%; color: rgb(34, 30, 31);">In my tenure of three years, I have not felt any kind of insecurity as of now. Apart from minor arguments from labourers, there is no interference and threat seen till this day. But as the overall judiciary is said to be insecure at the national level being the part of the overall broad framework of the judiciary, labour court is also insecure from that perspective. As an individual entity, there are no such issues in the labour court.</span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span style="line-height: 115%; color: rgb(34, 30, 31);">&nbsp;</span></span></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span class="A38"><span style="line-height: 115%; font-family: ">‘Trade Unions Contributed only Six Per cent of the Total Strikes’</span></span></span></strong></p>
<p class="MsoNormal">
	<strong><span style="font-size:14px;"><span class="A38"><span style="line-height: 115%; font-family: ">&nbsp;<img alt="bishnu" border="1" height="398" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/bishnu.jpg" vspace="10" width="346" /></span></span></span></strong></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A0">BISHNU RIMAL <br />
	President <br />
	<span style="line-height: 115%; font-family: ">GEFONT</span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:14px;"><span class="A0"><b style="mso-bidi-font-weight:normal"><span style="line-height: 115%; font-family: ">&nbsp;</span></b></span></span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">How many members are there in your union and how do you manage them? </span></b></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">There are more than 353,000 individual members in our union and 29 affiliates altogether. The affiliates recruit members on their own under our co-ordination and connect them with us but we do not subscribe direct membership. We have committees at the local and district levels. And at the entrepreneur level, they choose one male and female candidate each as our representatives. The committee of the registered union becomes our member in a national level. The affiliates are action oriented while the role of GEFONT is that of coordination. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">Why are industrial strikes so recurrent in Nepal? </span></b></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Strikes were frequent between 2006 and 2008 but after 2008, the frequency of industrial strikes has gone down. If you follow the website www.nepalbanda.com, you will find that trade unions have contributed only six percent of the total bandhas in the last year while around 28 percent bandhas were called by employers and the rest was contributed by parties and other organizations. If you are confusing political strikes with trade unions’ strikes, it is a mistake. If counted, there are hardly three companies where unions called strikes namely Surya Nepal, Pizza Hut and Unilever up to now. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">Do you think the trade unions in Nepal are following the right approach in collective bargaining? </span></b></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Since we do not call it collective bargaining across the board, I think the approach that we follow for collective bargaining is proper. We conduct bargaining at the central level committee for minimum standards like wage determination and finalize it there. Collective bargaining is for maximum standards and we do it according to the type of company in question. Multinational companies have high paying capacity so we demand more whereas we demand less from the less earning companies. Before getting into bargaining process, it is essential to find whether the company is in profit or not. There was a huge bargaining at local level when the Khimti Project was firing 89 workers. According to the law, it had to pay two per cent of the total earnings to the workers and the labors’ demand approach was correct. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">Due to the violent strikes and vandalism, private sector employers in Nepal fear to hire Nepali workers. How do you view this? </span></b></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Violent strikes are rare as far as I know. The strike against Surya Nepal is the only example that I can give for vandalism in the private sector. Apart from that, strikes are usually seen at the government service and public sector. Recently, there was a strike at Unilever in Hetauda for a week and the problem was solved immediately after the negotiations. If we go through case-by-case, we may find some cases that nurtured vandalism but in general, employees are not feared to hire Nepali workers. Moreover, I have heard that employees in Nepal are longing to hire Nepali workers but they are not finding any mainly because of the scarcity of the workers in Nepal. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;">&nbsp;<b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">What are the problems that the workers are facing in Nepali industries? </span></b></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Firstly, at the policy level, the main problem that we are facing is the ineffectiveness of the rule of law. Even the industrialists are not providing minimum wages to the workers while the minimum wage is Rs 6,200 only. Unless there is a labor inspection system, we cannot find out whether the rule of law has been followed or not. Our law says that after 240 days of working, a worker is permanent at the company but there are many outsourced labors working for years and the jobs are mostly informal. Secondly, the problem of meager pay has been on the rise. High productivity of the workers can be seen only if they are paid adequately. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Besides, there is no social security in the companies. In any developed country, workers get pension after 20 years of service in a company but this social protection is rare in Nepali companies. More than Rs 200 million has been collected since the government has put one per cent tax on the companies for the social security of the workers. Accident insurance and medical insurance should be implemented but there are no schemes yet. </span></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">The employers here fear that if the workers are made permanent, there will be less productivity. They believe that the workers are more productive when they work in fear. If there were no problems in permanent and temporary jobs, there wouldn’t be strikes in most of the industries. Workers are often agitated because there is low salary, no job guarantee and no social protection. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">Experts are saying that over unionization of labors has affected industries badly. What are your views on it? </span></b></span></p>
<p class="Pa8" style="text-align:justify;text-indent:14.0pt">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Conflict results from the sour relationship between management and workers, not from unionization. It is true that there are more unions in in service sector companies while some companies that provide informal job opportunities do not have unions at all. Unions are not the problems in companies because they solve most problems of the employers. A union solves the problems of each and every worker in the company and in most organizations, union leaders maintain labor relations with the management. The number of the unions is not a problem for an employee or the employer as long as authenticity of the union or the members of the bargaining team selected by the workers themselves is maintained. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">Intra-party/intra-union problems and power struggle are common among Nepali trade unions. You as the President of GEFONT may have realized that as well. What do you think could be the solution? </span></b></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Historically, there has always been a relation between Nepali political parties and trade unions. But it should be noted that Nepali trade unions are formed according to the law. Whether there is one or more than 20 unions in an organization, the employees should acknowledge that there should be a national election for an authentic union. For example, if there are four unions in an organization, the bargaining panel will be formed according to the votes in the election regardless of who the ruler of the union is. It’s only then that the multiplicity of the unions can be managed easily. Problems occur from the employers’ side too because their behavior changes according to the relationship with the union. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">As the trade unions in Nepal are affiliated to one or the other political party, they seem busy in politics than in promoting workers’ interests. How can this be resolved? </span></b></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Unions alone are not affiliated to political parties, employers too are affiliated and involved with the parties. In a multi-party system, affiliation to political parties is common and ideologically, it is correct too. </span></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;"><span style="color: rgb(34, 30, 31);">From the perspective of the laborers, we are purely representing the laborers inside the companies. We are not indulging in any politics, however, our people are affiliated with different political parties. </span></span></p>
<p class="Default">
	<span style="font-size:14px;">&nbsp;</span></p>
<p class="Pa24" style="margin-top:5.0pt;text-align:justify">
	<span style="font-size:14px;"><b style="mso-bidi-font-weight:
normal"><span style="color: rgb(34, 30, 31);">Labor disputes and shutdown of the industries are perceived as a threat to the investors venturing into new businesses in Nepal. How is your union going about it? </span></b></span></p>
<p class="Pa8" style="text-align:justify">
	<span style="font-size:14px;">&nbsp;<span style="color: rgb(34, 30, 31);">Had you gone through the document called ‘Doing Business’, you would find that the labor disputes are in the sixth number among other problems. Companies making high investments in Sunsari- Biratnagar corridor are demanding more labors. The report by World Bank has also put labor problems in seventh among others whereas the number one problem is government’s legal hassles and number two is the problem of taxation. No investor has withdrawn his investment because of the unions or the workers. Recently, we organized the third Labor and Employment Conference in Kathmandu where we jointly made a 15-points declaration regarding the welfare of the workers. We We shared that we do not have anything against the employers; rather, we had a common view that we lacked a proper government bureaucracy. Unions are often dragged between the ineffective government and the political parties which is not right. Investors say labour law is not good in Nepal but they have never blamed workers or the unions for being unfriendly towards investments. <br />
	</span></span></p>
<p>
	<br />
	<br />
	<br />
	<br />
	<br />
	<br />
	<br />
	According to the Central Bureau of Statistics, the country has about 11.7 million workforce and only 1.8 million are in the formal sector and around 3.5 million are in foreign jobs. Rest of them are either unemployed or in informal sector. What do you think should be done to attract more investments that help in reducing labor',
			'published' => true,
			'created' => '2012-10-30',
			'modified' => '2012-12-06',
			'keywords' => '',
			'description' => 'On the eve of celebrating Nepal Investment year 2012/13, over unionisation of labour has continued alarming foreign investors and discouraging local investors to venture into new industries. Multiple unions affiliated to more than one political party exist within a company. Such politicisations of labour unions have resulted in inter union and employee-employers rifts that significantly reduce productivity along with losses of working hours.',
			'sortorder' => '613',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 10 => array(
		'Article' => array(
			'id' => '704',
			'article_category_id' => '40',
			'title' => 'Remittance  : Reducing Poverty',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
<!--[if gte mso 9]><xml>
 <w:WordDocument>
  <w:View>Normal</w:View>
  <w:Zoom>0</w:Zoom>
  <w:TrackMoves/>
  <w:TrackFormatting/>
  <w:PunctuationKerning/>
  <w:ValidateAgainstSchemas/>
  <w:SaveIfXMLInvalid>false</w:SaveIfXMLInvalid>
  <w:IgnoreMixedContent>false</w:IgnoreMixedContent>
  <w:AlwaysShowPlaceholderText>false</w:AlwaysShowPlaceholderText>
  <w:DoNotPromoteQF/>
  <w:LidThemeOther>EN-US</w:LidThemeOther>
  <w:LidThemeAsian>X-NONE</w:LidThemeAsian>
  <w:LidThemeComplexScript>X-NONE</w:LidThemeComplexScript>
  <w:Compatibility>
   <w:BreakWrappedTables/>
   <w:SnapToGridInCell/>
   <w:WrapTextWithPunct/>
   <w:UseAsianBreakRules/>
   <w:DontGrowAutofit/>
   <w:SplitPgBreakAndParaMark/>
   <w:DontVertAlignCellWithSp/>
   <w:DontBreakConstrainedForcedTables/>
   <w:DontVertAlignInTxbx/>
   <w:Word11KerningPairs/>
   <w:CachedColBalance/>
  </w:Compatibility>
  <w:BrowserLevel>MicrosoftInternetExplorer4</w:BrowserLevel>
  <m:mathPr>
   <m:mathFont m:val="Cambria Math"/>
   <m:brkBin m:val="before"/>
   <m:brkBinSub m:val="--"/>
   <m:smallFrac m:val="off"/>
   <m:dispDef/>
   <m:lMargin m:val="0"/>
   <m:rMargin m:val="0"/>
   <m:defJc m:val="centerGroup"/>
   <m:wrapIndent m:val="1440"/>
   <m:intLim m:val="subSup"/>
   <m:naryLim m:val="undOvr"/>
  </m:mathPr></w:WordDocument>
</xml><![endif]--></p>
<p>
<!--[if gte mso 9]><xml>
 <w:LatentStyles DefLockedState="false" DefUnhideWhenUsed="true"
  DefSemiHidden="true" DefQFormat="false" DefPriority="99"
  LatentStyleCount="267">
  <w:LsdException Locked="false" Priority="0" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Normal"/>
  <w:LsdException Locked="false" Priority="9" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="heading 1"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 2"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 3"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 4"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 5"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 6"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 7"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 8"/>
  <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 9"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 1"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 2"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 3"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 4"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 5"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 6"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 7"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 8"/>
  <w:LsdException Locked="false" Priority="39" Name="toc 9"/>
  <w:LsdException Locked="false" Priority="35" QFormat="true" Name="caption"/>
  <w:LsdException Locked="false" Priority="10" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Title"/>
  <w:LsdException Locked="false" Priority="1" Name="Default Paragraph Font"/>
  <w:LsdException Locked="false" Priority="11" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Subtitle"/>
  <w:LsdException Locked="false" Priority="22" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Strong"/>
  <w:LsdException Locked="false" Priority="20" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Emphasis"/>
  <w:LsdException Locked="false" Priority="59" SemiHidden="false"
   UnhideWhenUsed="false" Name="Table Grid"/>
  <w:LsdException Locked="false" UnhideWhenUsed="false" Name="Placeholder Text"/>
  <w:LsdException Locked="false" Priority="1" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="No Spacing"/>
  <w:LsdException Locked="false" Priority="60" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Shading"/>
  <w:LsdException Locked="false" Priority="61" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light List"/>
  <w:LsdException Locked="false" Priority="62" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Grid"/>
  <w:LsdException Locked="false" Priority="63" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 1"/>
  <w:LsdException Locked="false" Priority="64" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 2"/>
  <w:LsdException Locked="false" Priority="65" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 1"/>
  <w:LsdException Locked="false" Priority="66" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 2"/>
  <w:LsdException Locked="false" Priority="67" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 1"/>
  <w:LsdException Locked="false" Priority="68" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 2"/>
  <w:LsdException Locked="false" Priority="69" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 3"/>
  <w:LsdException Locked="false" Priority="70" SemiHidden="false"
   UnhideWhenUsed="false" Name="Dark List"/>
  <w:LsdException Locked="false" Priority="71" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Shading"/>
  <w:LsdException Locked="false" Priority="72" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful List"/>
  <w:LsdException Locked="false" Priority="73" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Grid"/>
  <w:LsdException Locked="false" Priority="60" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Shading Accent 1"/>
  <w:LsdException Locked="false" Priority="61" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light List Accent 1"/>
  <w:LsdException Locked="false" Priority="62" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Grid Accent 1"/>
  <w:LsdException Locked="false" Priority="63" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 1 Accent 1"/>
  <w:LsdException Locked="false" Priority="64" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 2 Accent 1"/>
  <w:LsdException Locked="false" Priority="65" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 1 Accent 1"/>
  <w:LsdException Locked="false" UnhideWhenUsed="false" Name="Revision"/>
  <w:LsdException Locked="false" Priority="34" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="List Paragraph"/>
  <w:LsdException Locked="false" Priority="29" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Quote"/>
  <w:LsdException Locked="false" Priority="30" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Intense Quote"/>
  <w:LsdException Locked="false" Priority="66" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 2 Accent 1"/>
  <w:LsdException Locked="false" Priority="67" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 1 Accent 1"/>
  <w:LsdException Locked="false" Priority="68" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 2 Accent 1"/>
  <w:LsdException Locked="false" Priority="69" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 3 Accent 1"/>
  <w:LsdException Locked="false" Priority="70" SemiHidden="false"
   UnhideWhenUsed="false" Name="Dark List Accent 1"/>
  <w:LsdException Locked="false" Priority="71" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Shading Accent 1"/>
  <w:LsdException Locked="false" Priority="72" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful List Accent 1"/>
  <w:LsdException Locked="false" Priority="73" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Grid Accent 1"/>
  <w:LsdException Locked="false" Priority="60" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Shading Accent 2"/>
  <w:LsdException Locked="false" Priority="61" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light List Accent 2"/>
  <w:LsdException Locked="false" Priority="62" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Grid Accent 2"/>
  <w:LsdException Locked="false" Priority="63" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 1 Accent 2"/>
  <w:LsdException Locked="false" Priority="64" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 2 Accent 2"/>
  <w:LsdException Locked="false" Priority="65" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 1 Accent 2"/>
  <w:LsdException Locked="false" Priority="66" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 2 Accent 2"/>
  <w:LsdException Locked="false" Priority="67" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 1 Accent 2"/>
  <w:LsdException Locked="false" Priority="68" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 2 Accent 2"/>
  <w:LsdException Locked="false" Priority="69" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 3 Accent 2"/>
  <w:LsdException Locked="false" Priority="70" SemiHidden="false"
   UnhideWhenUsed="false" Name="Dark List Accent 2"/>
  <w:LsdException Locked="false" Priority="71" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Shading Accent 2"/>
  <w:LsdException Locked="false" Priority="72" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful List Accent 2"/>
  <w:LsdException Locked="false" Priority="73" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Grid Accent 2"/>
  <w:LsdException Locked="false" Priority="60" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Shading Accent 3"/>
  <w:LsdException Locked="false" Priority="61" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light List Accent 3"/>
  <w:LsdException Locked="false" Priority="62" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Grid Accent 3"/>
  <w:LsdException Locked="false" Priority="63" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 1 Accent 3"/>
  <w:LsdException Locked="false" Priority="64" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 2 Accent 3"/>
  <w:LsdException Locked="false" Priority="65" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 1 Accent 3"/>
  <w:LsdException Locked="false" Priority="66" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 2 Accent 3"/>
  <w:LsdException Locked="false" Priority="67" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 1 Accent 3"/>
  <w:LsdException Locked="false" Priority="68" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 2 Accent 3"/>
  <w:LsdException Locked="false" Priority="69" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 3 Accent 3"/>
  <w:LsdException Locked="false" Priority="70" SemiHidden="false"
   UnhideWhenUsed="false" Name="Dark List Accent 3"/>
  <w:LsdException Locked="false" Priority="71" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Shading Accent 3"/>
  <w:LsdException Locked="false" Priority="72" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful List Accent 3"/>
  <w:LsdException Locked="false" Priority="73" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Grid Accent 3"/>
  <w:LsdException Locked="false" Priority="60" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Shading Accent 4"/>
  <w:LsdException Locked="false" Priority="61" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light List Accent 4"/>
  <w:LsdException Locked="false" Priority="62" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Grid Accent 4"/>
  <w:LsdException Locked="false" Priority="63" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 1 Accent 4"/>
  <w:LsdException Locked="false" Priority="64" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 2 Accent 4"/>
  <w:LsdException Locked="false" Priority="65" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 1 Accent 4"/>
  <w:LsdException Locked="false" Priority="66" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 2 Accent 4"/>
  <w:LsdException Locked="false" Priority="67" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 1 Accent 4"/>
  <w:LsdException Locked="false" Priority="68" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 2 Accent 4"/>
  <w:LsdException Locked="false" Priority="69" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 3 Accent 4"/>
  <w:LsdException Locked="false" Priority="70" SemiHidden="false"
   UnhideWhenUsed="false" Name="Dark List Accent 4"/>
  <w:LsdException Locked="false" Priority="71" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Shading Accent 4"/>
  <w:LsdException Locked="false" Priority="72" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful List Accent 4"/>
  <w:LsdException Locked="false" Priority="73" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Grid Accent 4"/>
  <w:LsdException Locked="false" Priority="60" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Shading Accent 5"/>
  <w:LsdException Locked="false" Priority="61" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light List Accent 5"/>
  <w:LsdException Locked="false" Priority="62" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Grid Accent 5"/>
  <w:LsdException Locked="false" Priority="63" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 1 Accent 5"/>
  <w:LsdException Locked="false" Priority="64" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 2 Accent 5"/>
  <w:LsdException Locked="false" Priority="65" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 1 Accent 5"/>
  <w:LsdException Locked="false" Priority="66" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 2 Accent 5"/>
  <w:LsdException Locked="false" Priority="67" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 1 Accent 5"/>
  <w:LsdException Locked="false" Priority="68" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 2 Accent 5"/>
  <w:LsdException Locked="false" Priority="69" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 3 Accent 5"/>
  <w:LsdException Locked="false" Priority="70" SemiHidden="false"
   UnhideWhenUsed="false" Name="Dark List Accent 5"/>
  <w:LsdException Locked="false" Priority="71" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Shading Accent 5"/>
  <w:LsdException Locked="false" Priority="72" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful List Accent 5"/>
  <w:LsdException Locked="false" Priority="73" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Grid Accent 5"/>
  <w:LsdException Locked="false" Priority="60" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Shading Accent 6"/>
  <w:LsdException Locked="false" Priority="61" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light List Accent 6"/>
  <w:LsdException Locked="false" Priority="62" SemiHidden="false"
   UnhideWhenUsed="false" Name="Light Grid Accent 6"/>
  <w:LsdException Locked="false" Priority="63" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 1 Accent 6"/>
  <w:LsdException Locked="false" Priority="64" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Shading 2 Accent 6"/>
  <w:LsdException Locked="false" Priority="65" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 1 Accent 6"/>
  <w:LsdException Locked="false" Priority="66" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium List 2 Accent 6"/>
  <w:LsdException Locked="false" Priority="67" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 1 Accent 6"/>
  <w:LsdException Locked="false" Priority="68" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 2 Accent 6"/>
  <w:LsdException Locked="false" Priority="69" SemiHidden="false"
   UnhideWhenUsed="false" Name="Medium Grid 3 Accent 6"/>
  <w:LsdException Locked="false" Priority="70" SemiHidden="false"
   UnhideWhenUsed="false" Name="Dark List Accent 6"/>
  <w:LsdException Locked="false" Priority="71" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Shading Accent 6"/>
  <w:LsdException Locked="false" Priority="72" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful List Accent 6"/>
  <w:LsdException Locked="false" Priority="73" SemiHidden="false"
   UnhideWhenUsed="false" Name="Colorful Grid Accent 6"/>
  <w:LsdException Locked="false" Priority="19" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Subtle Emphasis"/>
  <w:LsdException Locked="false" Priority="21" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Intense Emphasis"/>
  <w:LsdException Locked="false" Priority="31" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Subtle Reference"/>
  <w:LsdException Locked="false" Priority="32" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Intense Reference"/>
  <w:LsdException Locked="false" Priority="33" SemiHidden="false"
   UnhideWhenUsed="false" QFormat="true" Name="Book Title"/>
  <w:LsdException Locked="false" Priority="37" Name="Bibliography"/>
  <w:LsdException Locked="false" Priority="39" QFormat="true" Name="TOC Heading"/>
 </w:LatentStyles>
</xml><![endif]--><!--[if gte mso 10]>
<style>
 /* Style Definitions */
 table.MsoNormalTable
	{mso-style-name:"Table Normal";
	mso-tstyle-rowband-size:0;
	mso-tstyle-colband-size:0;
	mso-style-noshow:yes;
	mso-style-priority:99;
	mso-style-qformat:yes;
	mso-style-parent:"";
	mso-padding-alt:0in 5.4pt 0in 5.4pt;
	mso-para-margin-top:0in;
	mso-para-margin-right:0in;
	mso-para-margin-bottom:10.0pt;
	mso-para-margin-left:0in;
	line-height:115%;
	mso-pagination:widow-orphan;
	font-size:11.0pt;
	font-family:"Calibri","sans-serif";
	mso-ascii-font-family:Calibri;
	mso-ascii-theme-font:minor-latin;
	mso-hansi-font-family:Calibri;
	mso-hansi-theme-font:minor-latin;
	mso-bidi-font-family:"Times New Roman";
	mso-bidi-theme-font:minor-bidi;}
</style>
<![endif]--></p>
<p class="MsoNormal">
	<span style="font-size:16px;"><span style="line-height: 115%;"><img alt="remit" border="1" height="284" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/remittance.jpg" vspace="10" width="449" /><br />
	<br />
	<br />
	Income received as the Nepali workers’ remittances working abroad has become an automatic instrument for poverty reduction in Nepal. Remittance has been recognised as a key to solve various economic ills afflicting the country. Moreover, it has raised some obvious questions. For instance, long the national economy can solely depend on the source of remittance to sustain itself? Is it possible to use the remitted money to improve social livelihood of the Nepali people or, can it be used in more productive sector? Can our policymakers think beyond the box of remittance economy?</span></span></p>
<p class="MsoNormal">
	<span style="font-size:16px;"><span style="line-height: 115%;">&nbsp;</span></span></p>
<p class="MsoNormal">
	<span style="font-size:10.0pt;line-height:115%">55 New Business Age | September 2012</span></p>
<p class="MsoNormal">
	<span style="font-size:10.0pt;line-height:115%">&nbsp;<br />
	<br />
	<img alt="coverstory" border="1" height="339" hspace="5" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/coverstory_1.jpg" vspace="5" width="300" /><br />
	</span></p>
<p class="MsoNormal">
	<span class="A8"><span myriad="" style="font-size:24.0pt;line-height:
115%;font-family:">COVER STORY</span></span></p>
<p class="Pa9" style="text-align:justify">
	<span class="A13"><span style="font-size:
59.0pt;color:windowtext">T</span></span><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">he total households receiving remittances in Nepal stood at 55.8 per cent in the year 2010-11 as revealed by the findings of Nepal Living Standards Survey (NLSS)- III released by the Central Bureau of Statistics (CBS). This is a sharp rise from the year 2003-04 when only 31.9 per cent households in Nepal received remittances. Another remarkable statistic in the report was the 18 per cent decline in absolute poverty in the six years between 2003-04 and 2009- 10. According to the report, only 13 per cent Nepalis now remain below the absolute poverty line (the benchmark being 2,200-calorie intake per day per person). Nepal ranks sixth among the countries in terms of Remittances-to- GDP ratio as stated in the World Bank Report-2011. It rose from Rs 47.5 billion in 2001-02 to Rs 231.73 billion in 2009- 10. Remittances-to-GDP ratio almost doubled from 10.3 per cent in 2001-02 to 19.6 per cent in 2009-10. Economists estimate that this figure will rise to 20 per cent in 2012-2014. <br />
	</span></p>
<p class="Pa10" style="text-align:justify">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">It is estimated that approximately 2.2 million Nepalis are working as migrant workers in various countries. Nearly 90 per cent of migrant workers have found employment in Qatar, Malaysia, Saudi Arabia, the UAE, and Kuwait. Among them, 10 per cent of migrant labors are female. According to Bal Bahadur Tamang, the President of Foreign Employment Association of Nepal, the growing construction business in the Gulf countries has created a demand for large number of Nepali workers. “Qatar is hosting a showpiece World Cup Football tournament in 2022 and therefore, the amount of construction work happening there has increased the demand of Nepali workers substantially,” informed Tamang. <br />
	<br />
	Increasing remittance flow has emerged as a favored poverty alleviation strategy in developing countries, particularly in Nepal. Policymakers believe that the financial contribution from migrant workers has provided impetus to development activities. They also opine that the scope of such revenue should be further enhanced. Nara Bahadur Thapa, Chief Manager of Nepal Rastra Bank at Biratnagar said, “The robust relationship between the growth in remittance and the reduction in poverty has evolved on account of a significant growth in the number of rural poor people seeking jobs in the Gulf countries.” </span></p>
<p class="Pa10" style="text-align:justify">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">“Annually, Nepal is receiving Rs 200 billion as remittance,” shared Dr Ganesh Gurung, a Remittance Economist. Based on the data of the Department of Foreign Employment, 1,500 people leave the country for foreign employment every day on an average as of August 2011. Quite naturally, the country has also been receiving proportional amount of remittances from these migrant workers employed abroad. From mid-July to mid-August 2011, the number of Nepalis going abroad for jobs was 45,165. This heavy reliance on foreign employment has shifted the Nepali economy from an agriculture-based economy towards a remittance-based one. </span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">The NLSS, 2010-11 reported that the common Nepalis’ access to basic facilities has improved over the years. Despite political upheavals and unrest, the average household income of Nepalis has increased by more than four-fold to Rs 202,374 over the span of 15 years due to increased receipt of remittances. Thapa shared that the remittance thus received is widely spent on daily consumption, followed by loan repayment and household property instead of capital formation. A Nepal Rastra Bank (NRB) report says that 78.9 per cent of the remittance is used on daily consumption, whereas 7.1 per cent of the remittance is used to repay loans followed by 4.5 per cent on household property, 3.5 per cent on education and only a minimal 2.4 per cent is used for capital formation. According to Dr Gurung, the increased remittance per household has not only increased consumption pattern but changed the social structure too. The nominal per capita consumption expenditure in aggregate increased from Rs 15,848 in 2003-04 to Rs 34,829 in 2010, at an annual average growth rate of 14 per cent. The survey also identified urban hills (9 per cent) and Kathmandu (11 per cent) having the least poor population while the highest population identified as poor live in the mountains (42 per cent) and rural hills in the Mid and Far-West regions (37 per cent).</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">According to Tamang, a significant chunk of the money received via remittance is being spent on imports and real estate instead of it being invested in productive sectors. The main challenge does not lie in receiving remittance but in channelizing it into productive use. Therefore, remittance should be included in the national development agenda to monitor its use. Though the government has given permission to manpower agencies to open foreign currency account in Nepali commercial banks, the government’s responsibility does not end here. Apart from monitoring and facilitating the use of this income, the government should encourage migrants to hold their income in financial assets within the country rather than abroad.</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">“Income received from remittance source has become an automatic instrument for poverty reduction in Nepal as both the government and the private sector have failed to create adequate number of jobs,” said Thapa. If we compare the domestic savings-to- GDP ratio, which is currently around 10 per cent, and national savings-to- GDP ratio standing at 36.7 per cent, the difference is largely due to remittance. Against the national savings-to-GDP ratio at 36.7 per cent, the total fixed investment-to-GDP ratio is 19.6 per cent, reflecting the failure of Nepali society to make productive use of remittance driven national savings. As of mid-June 2012, foreign exchange stood at Rs 427 billion, sufficient <span style="mso-spacerun:yes">&nbsp;</span>nough to <span style="mso-spacerun:yes">&nbsp;</span>cover merchandise and services import of around 10 months. This reflects two things. First, remittance is an important source of foreign exchange earnings, underpinning macroeconomic stability of Nepal. <br />
	</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">Second, the magnitude of foreign exchange indicates that both the government and the private sector have failed to make productive use of foreign exchange accumulated from remittance. Gurung opines that there is no question of utilising remittance for income generating activities for families living below the poverty line. In their case, remittance will take care of consumption. However, the families managing to save out of remittance can be encouraged to invest in income generating activities that could be an issue of micro management of remittance. Similarly, families engaged in agricultural activities and receiving remittance in excess of their consumption requirements should be encouraged to invest in high yielding crops and animal husbandry. This will help boost the agricultural production and consequently, their incomes. <br />
	</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">On the other hand, families residing in urban and semi-urban areas should be encouraged to invest in small services such as tailoring, taxi driving and undertaking petty businesses. For this to happen, the government can help establish multipurpose urban cooperatives. Lila Prasad Sitaula, Executive Director at Foreign Exchange Management Department of Nepal Rastra Bank, said, “The government, together with the NRB has introduced few important policies to utilize remittance productively. One of those is the issuance of remittance bond targeting migrant workers. Along with it, the NRB is formulating a policy to encourage banks and financial institutions for opening up branches in the rural areas, thus, bringing money in the banking system and channelize it in the productive sector. Furthermore, some provisions have been made to allow remittance companies to manage their forex balance in a more profitable manner, added Sitaula.</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">The government also started issuing foreign employment bond for mobilizing funds and making productive use of remittance since 2009-10 but so far, it has failed to gain popularity among the Nepali migrant workers abroad. According to Chandra Dhakal, Chairman of Nepal Remitters’ Association, remittance is the major factor in improving Nepal’s position in Human Development Index and improving poverty level. Remittance has played a major role in improving livelihood of millions of Nepalis. It has helped people have better access to health, education and sanitation. Dhakal added that the time has come to think about the productive investment of remittance for economic development of the country because capital has been a major constraint. <br style="mso-special-character:line-break" />
	<br style="mso-special-character:line-break" />
	</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">&nbsp;The Monetary Policy of 2012-13 has encouraged and facilitated those companies wishing to establish remittance business in various regions and countries. “We have realized the need for further expanding money transfer agencies to the countries where the supply of remitting service is few or not in existence,” shared Sitaula. Additionally, necessary bylaws have been introduced governing money transfer business activities. The government should prepare proper plans and policies in order to encourage the migrant workers to use formal channels instead of using illegal channels like ‘hundi’. Besides, the government should support the recruitment agencies in receiving recruitment charges, visa charges etc through proper banking channels which should automatically reduce the use of illegal banking channels.</span><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:"><br />
	<br />
	International Money Express (IME) was the first Nepali financial institution starting its services to control the flow of remittance through banking channel twelve years ago. And since the last few years, commercial banks through their representatives and agents have also been involving in money remitting business. As per a recent report of central bank, the total remittance for the first 11 month of FY 2011-12 stood at Rs 320.38 billion showing a growth of 39.6 per cent compared to a growth of 10.1 per cent during the corresponding period of the previous year. Dhakal said, “Though we don’t have any data related to remittance coming through remittance companies, we can estimate that more than 70 per cent of it is channeled through remittance companies.” According to him, remittance companies are doing their best in increasing their network and enhancing their service to bring more remittances through formal channels. The central bank and the government should cooperate and facilitate remittance companies in this noble endeavor, he said.</span> <span myriad="" style="font-size:10.0pt;mso-bidi-font-family:"><br />
	<br />
	“Commercial banks are coming into this business and making it more competitive, however, there is a huge misunderstanding in the scope of work for remittance companies and commercial,” said Dhakal. The present policies have been formulated on the assumption that remittance companies will bring the foreign currency and sell it to commercial banks so that both will be benefited. It is an irony that remittance companies are compelled to sell foreign currency to commercial banks, with whom they are competing at source. Since there is huge disparity in facilities available to remittance companies and commercial banks in terms of foreign currency, the central bank needs to review its policy to ensure sustainability of remittance companies, which are playing an instrumental role in Nepal’s inward remittance. On the other hand, the comfortable reserve position in the country leads to sufficient liquidity in the banking system that is being channelized into productive sectors. Moreover, the increase of foreign exchange reserves allows moving towards gradual liberalization of foreign exchange market.</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">“Preserving the value of foreign exchange is the main concern of the NRB,” said Sitaula. According to him, the central bank has been managing its foreign currency assets keeping it in major international currencies and different asset portfolios in accordance with the principle of portfolio diversification and minimizing currency risk. “A chunk of reserves is invested in highly liquid securities especially sovereign bonds and rest is placed with foreign central banks, BIS and different highly rated foreign commercial banks based on the ratings of international rating agencies such as Standard &amp; Poor’s and Moody’s,” shared Sitaula. While safety and liquidity constitute the main objectives of reserve management in Nepal, return optimization becomes an embedded strategy within this framework, he added.</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">Remittance increases foreign currency availability in the domestic market and raises national savings. Availability of foreign currency, in turn, facilitates financing of essential import and can avert possible balance of payments (BoP) crisis. Despite the rising trade deficit, Nepal witnessed a record current account as well as BoP surplus in the last year because of substantial flow of remittances. Had remittance flows stagnated last year, Nepal would have witnessed deficit in the current account and lesser BoP surplus, said Sitaula. Remittances alone can finance about 90 percent of merchandise trade deficit of the country.</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">These facts reveal a crucial role remittances play in attaining macroeconomic stability in the country. Though increasing remittance has its own advantages, it is also true that over dependency on it in the end will eventually lead to economic failure if the flow of remittance is disrupted. “Of course, nothing would be better than bringing development projects with sufficient funding to utilize the labor force in Nepal itself. For this, the long-term focus ought to be the development of entrepreneurial capabilities of the Nepalis so that remittances could be turned into productive investment that brings higher growth and employment generation,” said Gurung.</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">However, having said that, remittance has been the only hope in recent times to rescue the faltering economy from the low-level equilibrium trap when the implementation of capital expenditure programme is likely to go on a wild goose chase. Remittance has been imperative for survival, poverty reduction, and eliminating impoverished condition of life in the country. At the same time, the government has to resolve these problems, as remittance is one of the growing and most crucial sectors of the economy.</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">&nbsp;</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">&nbsp;</span></p>
<p class="Pa1">
	<span class="A8"><span style="font-size:24.0pt;color:windowtext">COVER STORY</span></span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">&nbsp;</span></p>
<p class="MsoNormal">
	<span class="A49"><span myriad="" style="font-size:23.0pt;line-height:
115%;font-family:">‘Remittances can have Long-term Impact if Channeled into Productive Investment’<br />
	<br />
	<br />
	<img alt="ganesh gurung" border="1" height="313" hspace="5" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/ganesh-gurung.jpg" vspace="5" width="300" /><br />
	</span></span></p>
<p class="Pa1">
	<span style="font-size:16px;"><span class="A5"><span style="color: windowtext;">DR GANESH GURUNG </span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:16px;"><span class="A5"><span color:="" style="line-height: 115%; font-family: ">&nbsp;Remittance Economist</span></span></span></p>
<p class="MsoNormal">
	<strong><span style="font-size:16px;"><strong>&nbsp;</strong><br />
	&nbsp;</span></strong></p>
<p class="Pa23" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">How do you view the contribution of remittance to the reduction of poverty in Nepal?</span></strong></p>
<p class="Pa10" style="text-align:justify">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">This, in fact, is an interesting aspect. The post conflict political situation has not witnessed major economic growth and hence unemployment and underemployment is an ever growing phenomenon. The political unrest decelerated the pace of industrial expansion and halted plenty of small and medium enterprises all over the country creating unemployment throughout the country. In that situation, a huge number of migrant workers amplified the number because of which, foreign employment became an emerging business in Nepal’s context. </span></p>
<p class="Pa10" style="text-align:justify">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">In my opinion, remittance has played a vital role in poverty reduction. Various reports and planning documents published in recent times have attributed the dramatic fall in absolute poverty to the inflow of remittances in Nepal. The percentage of all households receiving remittances in Nepal during the year 2010/11 was 55.8 per cent. This is a sharp rise from the year 2003/04 when it stood at 31.9 per cent. There has been an 18 per cent decline in absolute poverty in the six years between 2003/04 and 2009/10. Therefore, according to me, foreign employment is a major economic phenomenon in Nepal and its relation to the economic growth of the country is integral. </span></p>
<p class="MsoNormal">
	 </p>
<p class="Pa23" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">What is the trend of use of remittance in Nepal in general households? What is the ratio of its use in productive and unproductive sectors? How do you analyze such trends? </span></strong></p>
<p class="Pa10" style="text-align:justify;text-indent:14.0pt">
	<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">I believe that there are also some long-term opportunities brought about by foreign employment. Children of the foreign employment workers are getting quality education paid for by the remittances from their parents. The nation can benefit in the long term out of this trend as skilled and educated manpower is produced for the economy.<br />
	<br />
	The remittance sent by the migrant workers can be used to further generate wealth in the country. Besides spending on consumption, it has to be invested in productive sectors, which would bring about some positive change on the major macroeconomic variables of the country. Remittances can produce long term impact only if it is channeled into productive investment. Going by the current trends of consumption in Nepal, if the remittances are soaked up by consumption only and are not turned into investments, the short term boost provided by it in the economy will not be sustainable. Productivity will decline and the economic choices get tougher if the situation is not addressed in time and is stalled being shortly content with the remittance-based income. More remittance money is spent on consumption than in any other aspects. Only 2.4 per cent of remittance money is spent for capital formation in our country.</span> <span myriad="" style="font-size:10.0pt;mso-bidi-font-family:"><br />
	<br />
	Due to increase in revenues from remittances, the currency of a country becomes stronger compared to that of other nations resulting in exports becoming more expensive for other countries to buy. This can make the manufacturing sector less competitive. Thus, with the increase in the purchasing capacity of households receiving remittance, there is high demand of consumption and imported goods. There has been an appreciation of real exchange rate due to rise in the price of non-tradable with respect to tradable. Furthermore, there has been an erosion of manufacturing sector entailing to their reduced competitiveness. </span></p>
<p class="MsoNormal">
	 </p>
<p class="MsoNormal">
	 </p>
<p class="MsoNormal">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">How do you compare the remittance figures between today and five years ago?</span></strong></p>
<p class="Pa10" style="text-align:justify;text-indent:14.0pt">
	<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">Despite the huge contribution of remittance to GDP, Nepal’s economic growth rate has never exceeded 4 per cent except in 2005 although the indication is that remittance will go up in the years to come. A remittance share of 20 per cent of the total GDP should have created enough employment opportunities, but the unemployment rate still stands at 42 per cent. Furthermore, there appears to be an inversely proportional relationship between employment abroad and industrial growth. For instance, industrial production growth rate was only 1.8 per cent in 2011 whereas from 2002 to 2005, the growth rate was 8.7 per cent when remittance inflow was far less. In this ratio, the remittance pattern is in the increasing trend if we compare the figures of 2010/11 and 2004/05. However, the challenge is to channelize the remittance in productive sector. </span></p>
<p class="MsoNormal">
	 </p>
<p class="MsoNormal">
	<strong>&nbsp;</strong></p>
<p class="Pa23" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">What is the contribution of remittance in GDP? </span></strong></p>
<p class="Pa23" style="margin-top:5.0pt;text-align:justify">
	 </p>
<p class="Pa10" style="text-align:justify">
	&nbsp;<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">It is estimated that the number of Nepali migrant workers is officially 1.4 million and the number of undocumented migrant workers is estimated to be the same. Annually, Nepal is receiving Rs 200 billion as remittance and its contribution to GDP is about 20 per cent. According to World Bank report - 2011, Nepal ranks sixth among countries in whose GDP remittance holds a very high share. It rose from Rs 47.5 billion in 2001/02 to Rs 231.73 billion in 2009/10. Remittance-to-GDP ratio almost doubled from 10.3 per cent in 2001/02 to 19.6 per cent in 2009/10. Therefore, we can say that there has been a positive impact of remittance in GDP. </span></p>
<p class="MsoNormal">
	 </p>
<p class="Pa23" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">How successful has the state become to utilize the remittance income in the development activities? </span></strong></p>
<p class="Pa10" style="text-align:justify">
	<strong>&nbsp;</strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">It is rather disappointing that the state has not been able to utilize the remittance to the optimal level. Very less has been done in this aspect. With a huge number of migrant workers working across the globe, remittances are emerging as a new way for alleviating poverty in the developing and least developed countries. </span></p>
<p class="Pa10" style="text-align:justify">
	&nbsp;<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">Due to unhealthy investment environment in the home country, remittance money has not been used productively which has made Nepal a consumption oriented economy rather than an investment oriented one. This has slowed the pace of development activities in the country. Presently, 78.9 per cent of remittance money is used for daily consumption while only 2.4 per cent is being used in the productive sector. So, the government should create an investment friendly environment in order to use the remittance money in the productive sector. </span></p>
<p class="Pa10" style="text-align:justify">
	&nbsp;<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">In my opinion, the migrant workers should be trained and well informed about what they can do with the money they earn at destination countries. The recruiting agencies should take them in confidence that even after they return to their country, they could have a secure future. Different plans and policies have to be made to create investment friendly environment for these workers. In addition, proper investment environment in the home country acts as a backup in case of emergencies oversees and even during financial crisis. Similarly, the government should introduce measures to encourage savings among migrant workers and their remittance recipient families. </span></p>
<p class="MsoNormal">
	 </p>
<p class="Pa23" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">What is your vision to utilize the expertise of the private sector as well as the state to utilize the earning from remittance? </span></strong></p>
<p class="Pa10" style="text-align:justify;text-indent:14.0pt">
	<strong>&nbsp;</strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">Private sector has a great role to play here. They are the ones who should be making attractive and feasible business ventures that are appropriate for migrants. Migrant workers do not know about the viable projects where their money can be invested. Therefore, in collaboration with these migrant workers, the private sector should establish business ventures that are not only viable but also fulfill the need of the country. Thus, both will have a win-win situation.<br />
	<br />
	People recruited for foreign must be provided several types of training that can enhance their productivity to get better jobs. Proper trainings should be provided to these workers to gain required skills in the destination country. Another major area where private companies are key players is the remittance receiving procedures. There are dozens of private money transfer companies that are providing the service and transferring money through legal and formal channels. The spread of such private services to even the rural areas of the country suggests increasing demand for their services and profitability potential. </span></p>
<p class="MsoNormal">
	&nbsp; <br />
	 </p>
<p class="Pa23" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">What is the situation of Labor Desk and Welfare Fund in the present situation? Is there enough transparency? <br />
	<br />
	</span></strong></p>
<p class="Pa10" style="text-align:justify;text-indent:14.0pt">
	<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">The Labor Desk has acted more as an extended bureaucracy on the part of the government. The Welfare Fund has collected Rs one billion as of September 2011. However, no significant work has been accomplished to properly utilize this amount. There is less transparency regarding the fund collected thus far. In my opinion, the fund should be utilized to provide trainings, skill-enhancing workshops, and information required for foreign employment. This way, the migrant workers will be well equipped with required skills and well informed about the destination country. This will automatically minimize the risk of the labors being cheated or discriminated at the host nation. </span></p>
<p class="MsoNormal">
	<strong>&nbsp;</strong></p>
<p class="MsoNormal">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">What is the contribution of remittance in Balance of Payments?</span>&nbsp; <br />
	</strong></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">Nepal was compelled to borrow $42.5 million from the International Monetary Fund under its rapid credit facility to address BoP deficit one-and-a-half years ago. However, the acceleration in the growth of remittance along with the improvement in the service account has helped maintain a comfortable balance of payments (BoP) situation. After remaining in deficit for two years, the country’s BoP turned surplus in the second last month of the last fiscal year and has continued to grow since. In the same period last year, the BoP had recorded a deficit of Rs 5.72 billion.</span></p>
<p class="MsoNormal">
	<strong>&nbsp;</strong></p>
<p class="MsoNormal">
	<strong><strong>&nbsp;</strong></strong></p>
<p class="Pa23" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">An initiative of the government-foreign employment bond has said to have failed miserably. How can such initiatives be made successful?</span></strong></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">In my opinion, it is necessary to create a mechanism that provides incentives to the stakeholders so that they are keen to sell on the one hand and on the other, interest rate and other facilities given are not attractive for the migrant workers. Thus, the government should make the bond an attractive package and provide them some more incentive so that it is comparatively profitable for them to buy.</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">Foreign employment bond is one of the key instruments that the government has adopted to raise internal loans. However, lack of awareness and complicated procedures are responsible for the low subscription. The first foreign employment bond, issued in fiscal year 2009-10 had seen subscription worth Rs 4.6 million of the total issue of Rs one billion at 9.5 per cent interest. Likewise, last year too, bonds worth only Rs four million of the total issue worth Rs five billion were sold.</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">The repetitive failure of the bond to attract enough investment from the migrant worker community has been attributed to the absence of proper marketing channels. The failure of the last two batches had got NRB to look into diverse markets allowing even Non Resident Nepalis (NRN) and returnee migrant workers to purchase the bond instead of only focusing on migrant workers in the Gulf countries and Malaysia. The layman is missing out on booking good returns by investing in bonds due to lack of awareness about investing in government securities.</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">&nbsp;</span></p>
<p class="Pa1">
	<span class="A8"><span style="font-size:24.0pt;color:windowtext">COVER STORY</span></span></p>
<p class="Pa1">
	<span class="A8"><span style="font-size:24.0pt;color:windowtext"><span style="mso-spacerun:yes">&nbsp;<br />
	<img alt="bala bahadur tamang" border="1" height="293" hspace="10" src="http://www.newbusinessage.com/ckfinder/userfiles/Images/BAL-BAHADUR-TAMANG.jpg" vspace="10" width="300" /></span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:18px;"><span class="A5"><span color:="" style="line-height: 115%; font-family: ">BAL BAHADUR TAMANG <br />
	President <br />
	Foreign Employment Association</span></span></span></p>
<p class="MsoNormal">
	<span style="font-size:18px;"><span class="A5"><span style="line-height: 115%; font-family: ">&nbsp;</span></span></span></p>
<p class="MsoNormal">
	<span class="A5"><span myriad="" style="font-size:10.0pt;line-height:
115%;font-family:">&nbsp;</span></span></p>
<p class="MsoNormal">
	<strong><span class="A5"><span myriad="" style="font-size:10.0pt;line-height:
115%;font-family:">&nbsp;</span></span></strong></p>
<p class="Pa23" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">Which are the countries currently demanding Nepali labors on a big scale? What kind of wages do these migrant workers earn abroad? </span></strong></p>
<p class="MsoNormal">
	<strong>&nbsp;</strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">Most of the world’s estimated 150 million migrants are people searching for improved economic opportunities abroad. Nepal has not been able to escape this phenomenon either. Economic migration to the Middle East from countries in South Asia and other parts of the world was spurred-on by the oil boom in the early 1970s. The reasons behind the migration to the Gulf countries are almost same in Nepal as other parts of the world. Foreign labor migration has developed in such a way over the decades that it has shifted Nepal’s agricultural-based economy towards a remittance based one.</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">Nepalis labors are demanded mostly in countries like Malaysia, Dubai, Saudi Arabia and Qatar. Most of the Nepali labors ranging from unskilled, semi-skilled and skilled are equally opting to receive foreign employment to these countries. The minimal wage rate for unskilled labor is 800, semi-skilled is 1,000 and for skilled labor is 1,200 Saudi Riyal. Apart from it, some European countries are also demanding skilled Nepali labors. However, the Middle East nations stand above in this aspect.</span></p>
<p class="MsoNormal">
	<strong>&nbsp;</strong></p>
<p class="Pa23" style="margin-top:5.0pt;text-align:justify">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">Why is it that the Nepali manpower agencies have not been able to send skilled manpower to the developed countries? How can this problem be resolved? </span></strong></p>
<p class="MsoNormal">
	<strong>&nbsp;</strong><span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">There is a demand of skilled workers in the international labor market. However, there is a vast difference while comparing the educational and technical standards of Nepali labors with those of the other countries. It is believed that Nepali workers are accepted in East and South Asia as well as the Gulf countries only because they come cheap and do whatever job is given to them. They lack required technical skills which makes it difficult for them to get visas for recruitment in the developed nations.</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">I strongly believe that the government should improve the curriculum in schools so that it can provide more practice-based knowledge. Apart from it, the government should also conduct consultation meetings with the experts, occupational groups, trade unions and foreign employment enterprises to make rules and regulations for the promotion and management of foreign employment occupation.</span></p>
<p class="MsoNormal">
	 </p>
<p class="MsoNormal">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">How do you view the conduct of manpower agencies operating in Nepal? What are the measures that your association is initiating to give this industry more credibility?&nbsp;&nbsp; </span></strong><br />
	<br />
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">The main objective of the association is to monitor the manpower agencies providing foreign employment services, for their efficacy and transparency. We are working to make foreign employment business safe, well managed and decent as well as protect the rights and interests of the foreign bound workers and foreign employment entrepreneurs. There are many incidences of fake employment contracts, visas and forged documents etc. The result is that many Nepalis become stranded in foreign countries or are deported from these destinations where they go for work.</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;line-height:115%;mso-bidi-font-family:
">A large number of unlicensed agencies exist in the manpower market in Nepal today. Estimates suggest that more than 200 unlicensed agencies are clandestinely involved in this business and bypass all official channels. For example, there are some manpower agencies charging more than Rs 2-3 lakhs per person for a position of manual labor in the Gulf countries or Malaysia. However, the actual cost should be much less. The association is closely monitoring the manpower agencies to make them follow the code and conduct of FEA. <br />
	</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">A high-level advisory committee with the participation of the Ministries of Labor and Finance, the National Planning Commission and foreign employment organizations should jointly work, in order to expand foreign employment opportunities and increment the reliability of agents. The association is preparing a draft of proposal concerning the trainings that is to be provided to the workers seeking foreign employment opportunities in the days ahead.</span></p>
<p class="MsoNormal">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">How can ‘Hundi’ transaction be controlled? Why have manpower agencies not been able to encourage the migrant workers to use formal channels for remittance flow?</span></strong></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">Remittance is one of the important sources of income. The contribution of remittance on Gross National Product is 23.6 per cent. In some cases, it seems that the process of remittance is lengthy and costly. The government should prepare proper plans and policies in order to encourage the migrant workers to use formal channels for remittance purpose. It should provide orientation classes and distribute booklets mentioning the disadvantages of using illegal banking channels like hundi, for instance. The government should also support the recruitment agencies in receiving recruitment charges, visa charges etc through proper banking channels and thereby automatically reduce the use of illegal banking channels. Currently, about 25 per cent of remittance flow is being carried out through hundi. The only way we can control hundi transactions is through easy banking access and close monitoring.</span></p>
<p class="MsoNormal">
	 </p>
<p class="MsoNormal">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">What is your suggestion to direct the inflow of remittance exclusively from banking channels?</span></strong></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">We have to make the migrant workers understand that huge amounts can be invested in micro, technological and small and medium enterprises. This not only generates employment opportunities, but also stimulates demand for goods and services leading to increment in household income and acquisition of real estate. We can do this by providing trainings to migrant workers before they leave for their destination countries. We have to make them realize that their money would be invested in securing their future and they would have a stake in government projects. It will definitely encourage them to use the formal channels of remittance flow. Apart from it, the easy mechanism for remittance flow through banking channel has to be set up accordingly. Only then, the migrant workers would be encouraged to use the banking channel to send their money to Nepal.</span><br />
	<br />
	 </p>
<p class="MsoNormal">
	<strong><span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">How do you think the families back in Nepal are utilizing the money received from migrant workers?</span> <br />
	</strong></p>
<p class="Pa10" style="text-align:justify">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">Instead of the money going to productive sectors, a significant chunk of the remittance is being spent on imports and real estate. Households that owned houses have decreased while those renting houses have increased. The houses of migrant workers have been modernized replacing thatched roof with steel roofs. Access to power has substantially increased too so are the households with safe drinking water, toilets and LPG for cooking. Consumption expenditure on food, housing, and education has increased resulting in a rise in the living standard. However, less money has been invested for capital formation at the macroeconomic level. </span></p>
<p class="MsoNormal">
	 </p>
<p class="MsoNormal">
	<strong>&nbsp;<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">It is said that the Foreign Employment Bond issued by the government has failed due to the uncooperative behaviors of manpower agencies. What is your take on it? What is your suggestion to best utilize the remittances sent by the migrant workers?</span><br />
	</strong></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">It is very unfair to say that manpower agencies have shown uncooperative behavior regarding the Foreign Employment Bond. Actually, there has not been enough publicity of the bond to the migrant workers. Besides, the migrant workers do not have much purchasing power as they have many financial obligations that need to be fulfilled with limited income.</span></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">As of now, remittance is being used in unproductive areas like building houses and other unnecessary products. It would be much better if remittance could be used in productive sector like education, hydro power etc.</span></p>
<p class="MsoNormal">
	<strong>&nbsp;</strong></p>
<p class="Pa23" style="margin-top:5.0pt;text-align:justify">
	<strong>&nbsp;<span myriad="" style="font-size:10.0pt;mso-bidi-font-family:">The welfare fund has collected around Rs one billion as of September 2011 but it has not been utilized or any productive work. What are the necessary steps that can be taken to properly utilize this amount?</span></strong></p>
<p class="MsoNormal">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">According to the Foreign Employment Act 2064 BS, the Foreign Employment Promotion Board is expected to use the amount collected under the Welfare Fund, in conducting foreign employment awareness programs in 72 districts. I, being a member of the said board, raise these issues to the government to address the problems faced by the migrant workers.</span></p>
<p class="Pa10" style="text-align:justify">
	<span myriad="" style="font-size:10.0pt;
mso-bidi-font-family:">In my opinion, the board has to provide loans with minimum interest to those working abroad. If their families who are in Nepal get loans, there is a good chance that they will invest such amount in the p</span></p>',
			'published' => true,
			'created' => '2012-10-10',
			'modified' => '2012-10-31',
			'keywords' => '',
			'description' => 'Income received as the Nepali workers’ remittances working abroad has become an automatic instrument for poverty reduction in Nepal. Remittance has been recognized as a key to solve various economic ills afflicting the country. Moreover, it has raised some obvious questions.',
			'sortorder' => '600',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 11 => array(
		'Article' => array(
			'id' => '660',
			'article_category_id' => '40',
			'title' => 'Drug Drive : The Rising Business Pharmaceutical Companies In Nepal',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	<strong>By Sushila Budhathoki <br />
	</strong></p>
<p>
	<strong><br />
	</strong></p>
<p>
	<strong><br />
	</strong></p>
<p>
	<br />
	<span style="font-size:14px;"><strong>Drug Drive : The Rising Business Of Pharmaceutical Companies In Nepal</strong></span></p>
<p>
	 </p>
<p>
	<br />
	<br />
	<img alt="coverstory July 2012" border="1" height="226" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/drugs.jpg" vspace="5" width="400" /><br />
	<br />
	Nepal’s pharmaceutical expense is at par with other South Asian countries, thanks to the increase in the number of pharmaceutical companies and their production. In 2008, the total per capita pharmaceutical expenses was US$ 6.96 while the total amount of pharmaceutical expenses stood at Rs 13.09 billion in Nepal. Mahesh Gorkhali, President of Association of Pharmaceutical Producers Nepal (APPON) says Nepali companies are growing at around 15-20 percent annually. The growth has resulted in around 42 per cent command of the market by Nepali products with strong presence and distribution network of marketers in the rural and remote areas. <br />
	<br />
	<br />
	A ‘Market Study Report on Pharmaceutical Products in Nepal’ conducted in 2011’ depicts the shining business of Nepali pharmaceutical industries. According to the report, Nepal experienced significant growth in medicine production in Asia when the growth rate was 11 per cent globally in the year 2009. Nepal obtained annual growth rate of pharmaceutical products at 19.52 per cent even ahead of India who saw 13 percent growth during the same period. According to the report, the total turnover of Nepali companies was approximately Rs 6.8 billion where the company registering lowest sales turnover was Rs 20 million and the highest at about Rs 600 million. The World Health Organization’s report ‘The World Medicines Situations 2004’ listed Nepal among 84 countries that produced pharmaceutical finished products from imported ingredients whereas India was categorized among 17 countries that had innovative capacity. <br />
	<br />
	<br />
	Pradeep Jung Pandey, President of Lomus Pharmaceutical Pvt Ltd says that Nepali companies are capable of producing some of the segments out of big variants of medicinal products. He adds, “We have the potential of increasing the market share at a fast pace.” Most of the Nepali allopathic medicines are of oral dosage forms of tablets, capsules, liquid, syrup, powder for oral suspension while topical preparation like cream, ointment and lotion are also produced. If vaccines, contraceptives, ARV (Anti Retroviral), large volume drugs and few others are excluded, Nepali companies tend to acquire big market share, say experts. Radha Raman Prasad, Director General and Chief Drug Administrator at Department of Drug Administration (DDA) states that medicines can be imported like other goods from the global market. “When the market is dictated by the Nepali industries, the foreign companies that cannot compete will automatically exit,” he says. <br />
	<br />
	<strong><br />
	Demand, Supply and Investment <br />
	</strong><br />
	<br />
	<img alt="" border="1" height="228" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/drugs1.jpg" vspace="5" width="300" /><br />
	<br />
	Demand of Allopathic medicines is high in Nepal. There are altogether 45 Nepali companies operating in the market with 4,677 brands and thousands of products. According to the market study 2011, public expense on pharmaceuticals was Rs 2.96 billion in the year 2008. Similarly, total private expense on pharmaceutical products was Rs 10.06 billion. <br />
	<br />
	<br />
	The size of Nepali medicine market is estimated at Rs 18 billion and the Nepali companies command 42 per cent market share. Manufacturing of oral antimicrobials like penicillin, β-lactam, Non penicillin, antifungals, anthelminthic and antiviral (Simplex) is common while some are engaged in producing non-steroid pain killers, nutritional supplements, enzymes, haematinics, oral steroids, cardiovascular (heart and blood pressure), diabetes, psychiatry (mental disorder) etc. <br />
	<br />
	<br />
	Many Nepali and foreign companies are importing and supplying pharmaceutical products. Their role is significant for fulfilling the demand of various kinds of medicines in Nepal. According to DDA, 257 foreign pharmaceutical companies acquired licenses to sell their allopathic medicines in the year 2067/68. Similarly, 11,769 medicines are registered with DDA including 7,092 foreign and 4,677 Nepali products. There are altogether 1,544 wholesalers and 8,110 retailers throughout the country. <br />
	<br />
	<br />
	The estimated investment in the pharmaceutical industry of Nepal is around Rs 735 million to Rs 1.47 billion. Mahesh Gorkhali, President of Association of Pharmaceutical Producers Nepal (APPON), explores the need of high investment for the establishment of a pharmaceutical Company. He says, “For a good company mainly producing tablets, capsules and liquids, around Rs 25-30 million is required as an investment depending upon the choice of machinery equipments, building, location etc. Establishing an industry in city areas is usually costlier than in the terai or hilly regions.” Nepali industries are not API (Actual Pharmaceutical Ingredients) manufacturers; they import raw materials from other countries. The cost of the raw materials is also increasing investment in the pharmaceutical industries. <br />
	<br />
	<br />
	<strong>Emerging Pharmaceuticals <br />
	</strong><br />
	The number of Nepali allopathic companies has reached 58, according to the DDA. Altogether, 11 new allopathic companies have been registered in the FY 2068/69 whereas only two allopathic companies were registered in the previous year. A number of pharmaceutical companies have been established in different districts like Dang, Bharatpur, Sunsari, Jhapa, Bhaktapur, Kathmandu, Nawalparasi, Birgunj, Lalitpur, Bara and Parsa with investment of billions of rupees (see table). According to the DDA, pharmaceutical companies registered in the FY 2068/69 have proposed a total investment of 1.83 billion Rupees including investment from both herbal and allopathic companies. <br />
	<br />
	<br />
	<strong>Job Destination <br />
	</strong><br />
	<img alt="" border="1" height="220" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/drugs3.jpg" vspace="5" width="300" /><br />
	<br />
	<br />
	Pharmaceutical business has employed thousands of people in pharmaceutical production, distribution and marketing. There are 4,200 medical representatives, 2,474 pharmacists and more than 13,000 professionals employed with various pharmaceutical companies. Regular human resource like managers, accountants, computer operators, receptionist, cleaners, drivers, kitchencrew, HR and admin officers also find work with these organisations. Pharmaceutical companies also provide internship to hundreds of students every year who are mostly recruited in the very companies at a later stage. Sanju Acharya, Administrative Assistant at Nepal Pharmacy Council, opines that there is a huge demand of pharmacy graduates in the pharmaceutical sector. Pharmacy professionals are of two categories; those who have graduated in Pharmacy and above up to PhD level and the ones who complete three year Diploma in Pharmacy under the Council for Technical Education and Vocational Training-CTEVT program. Pharmacy students are highly in demand at Pharmacy colleges as teachers and laboratories and hospitals as researchers or lab assistants. By law, a hospital must own a pharmacy operating 24 hours, which also provides opportunity to these students. Graduates from the Institute of Medicine (IOM) and Kathmandu University are mostly found applying for foreign colleges in search of greener pastures. Having seen the better job opportunities, many colleges have started to include pharmacy as a subject in their curriculum. There are around 16 pharmacy colleges affiliated to Tribhuvan University, Pokhara University and Purbanchal University. Together, they produce pharmacy graduates for the industry with an annual intake of around 600- 650 graduates yearly. Kathmandu University runs B Pharm, M Pharm, Pharm D and PhD programs while CTEVT runs three year Diploma in Pharmacy program at 24 different institutions, with an annual intake of 960 persons. The undergraduates are mostly utilized in community pharmacies. <br />
	<br />
	<br />
	<strong>High Competition <br />
	</strong><br />
	<br />
	The market share of Nepali companies in the urban set up is approximately 20 per cent and the rest 80 per cent in the rural markets. The reason behind this is credited to high competition among Nepali pharmaceutical companies and limited customers or prescribers, in spite of progressive marketing and promotion of the medicines. It clearly depicts that if the share of Nepali products increases in the city areas, their total share in the pharmaceutical market will experience a significant growth ultimately. However, new industry registrations too signal to follow the same trend which industrialists fear would lead to further competition. Government authorities state that the import of large volumes of drugs from other countries is due to the scarcity of varieties of medicines in the market. On the other hand, Industrialists accuse the government of importing many similar products from India which they say is also one of the reasons behind severe competition. Most of the medicines are ‘me too’ products which has compelled high competition between Nepali companies as well as the imported ones. Most pharmaceutical products are related to a particular disease or a group of diseases (therapeutic segment), and are not spread in diverse therapeutic segments. Apart from that, products like Albendazole, Amoxicillin, Azithromycin, Ciprofloxacin, Fluconazole, Paracetamol, Ibuprofen, Hyoscine, Metronidazole, Ofloxacin, etc are manufactured by around 20 to 30 companies. Similarly, around a dozen of companies produce the cardiovascular and diabetes medicines. “There should have been competition on varieties and quality of the medicines but some Nepali companies are desperately competing because of the similar products,” says freelance market researcher Rajan Raut. Similar products from foreign countries find their stand in the market even tougher as some of the Nepali products have even substituted imported products. <br />
	<br />
	<br />
	<img alt="coverstory" border="1" height="771" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/drugs12.jpg" vspace="5" width="400" /><br />
	<br />
	<br />
	<strong>Monitoring and Inspection <br />
	</strong><br />
	<br />
	The DDA – that has 31 staffs which include 13 drug inspectors of different levels – has been facing a hard time in operating effectively. Such a limited manpower is considered a very low number to maintain the growing number of pharmaceutical industries, wholesalers and retailers. With little human resource to speak of, DDA runs different programs like marketing authorization, inspection, import control, licensing, market control, medicine advertisement and promotion, quality control and clinical trial. Quality inspection of medicines including laboratory reagents, surgical items, bandage, sutures, catheters etc are also some areas the DDA has been found lacking at. National Medicine Laboratory is the only public sector laboratory which monitors quality of the medicines through samples collected by the DDA. However, it doesn’t publicize the results publicly. Lack of good distribution practice and storage practice seems a common problem in many places. This is the reason why consumers often complain about consuming outdated medicines or shortage of essential medicines, blood, oxygen etc. Lack of proper monitoring system of pharmaceutical product is feared to grow ineffectiveness. No medicine company is found reporting its medicinal errors. As per the law, up to Rs 300,000 is to be paid by the manufacturer as compensation if medicine causes harm to the consumer. Baburam Bhattarai, President of Nepal Chemist and Druggist Association urges the need of regulating unregistered medical stores because according to him, they contribute towards creating health hazards. He says, “The government monitoring system has not been so effective. Besides, the current political situation is also fostering such business.” There is no specified division or section in DDA for WHO-GMP inspection either. Although the DDA has insisted that it has not found a single case of counterfeit drug, doctors from different districts bordering India fear its presence in the Nepali market. High prices of medicines have always been a controversial issue. DDA has fixed the actual price for up to 10 medicinal products including saline, painkillers and oral dehydrates. Shyam Adhikari, Drug Inspector at the DDA says they are looking at a mechanism to ascertain the prices of Nepal made medicines as well as the imported ones in the coming days. Recently a ‘Price Monitoring Committee’ has been formed with the participation of members from the DDA, pharmaceutical industry and consumers’ representatives. However, the companies insist that they keep the profit margin scientifically with the approval of the Government of Nepal. Pandey points that the Nepali medicines are priced either at par or a little cheaper than those of their Indian counterparts. Citing the example of a paracitamol tablet, he says, “A single unit of citamol tablet costs Rs 2 in Pakistan and India while it costs only one rupee in Nepal.” Pharmaceutical companies do not produce drugs in a large volume neither do they run with full capacity. Nepali pharmaceutical companies are using 20 to 90 per cent of their respective capacities for production and operate about 8 hours daily which is said to be the major reason behind the high production cost of the medicines. <br />
	<br />
	<br />
	<strong>Investment in Research &amp; Development <br />
	</strong><br />
	<br />
	There are only two or three companies that have been producing biological products. Most of the demand of injectables and biological drugs is fulfilled through imports. Essential medicines which require high technology are donated to Nepal by different international aid agencies from abroad. They also provide vaccines for expanded programs of immunization and medicines for the treatment of tuberculosis, leprosy, HIV/AIDS and sexually transmitted infections (STI), malaria, kala-azar and filariasis etc, for free. Nepali companies are producing around 33 per cent of essential medicines mainly producing therapeutic drugs. Industrialists are apprehensive about invest in research &amp; development (R&amp;D) because of the current political instability and law and order situation, say analysts. Most of the Nepali companies have limitations in terms of technical capability and innovation. On the other hand, foreign companies including multinational ventures have access to latest technologies and are engaged in import of medicines. However, there is no technical collaboration between the multinational ventures and Nepali companies. Industrialists too agree that Nepali pharmaceutical companies should conduct varieties of research and fulfil the demand of high tech medicines in Nepal. They accuse the government for not supporting them adequately as R&amp;D requires high investment, manpower and technology. <br />
	<br />
	<br />
	<strong>The Way Forward <br />
	</strong><br />
	<img alt="" border="1" height="200" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/drugs4.jpg" vspace="5" width="300" /><br />
	<br />
	Many Nepali companies are manufacturing high quality products of international standards and fostering the growth of the Nepali medicine market. Zinc tablet, which is useful for treating ringworm disease in children and popular among international companies, is a product of Deurali Janata Pharmaceutical (DJP). Radha Raman Prasad, Director at DDA, seems satisfied with the quality of Nepali pharmaceutical products. He says, “Few samples have been found lacking quality in the market due to some reasons but I think the overall quality of Nepali medicines is at par with international standards.” Experts involved in the business of medicinal products suggest drug producers to work collectively towards exporting Nepali medicines. Prasad admits that export is not just limited to the quality of the drug. He says that every country has some clauses and Nepal can fulfil those clauses. Some of the Nepali companies are even trying to export drugs to Singapore and Malaysia. “We are very rich in resources for pharmaceutical products, all we need is skilled manpower and the technology. Provided these aspects, we have huge potential for export,” he adds. The much awaited National Drug Policy has been drafted by the DDA. According to Prasad, efforts have been made during the preparation of the draft to address the issues of pharmaceutical industries. He says, “The draft focuses on new areas of thrust, in comparison to the previous policy which focused on export. It has a provision of contract manufacturing for technology input, providing incentive for R&amp;D activities, manufacturing, clinical research and attracting foreign countries for R&amp;D.” From a human resource perspective, students who have studied bio pharmacy abroad have started returning to Nepal. This development promises to enable companies to operate various researches. In August 2011, DDA permitted contract manufacturing of pharmaceutical products to the manufacturing contractors owning WHO-GMP certificate and licenses of the products. The Department of Commerce and Supplies and District Administration Offices are conducting inspections on a regular basis to find out sales of expired drugs and also making their findings public. GMP and GLP (Good Laboratory Practice) standards are meant to pave the way for assuring efficacy and quality of the drugs in the international market and are expected to ease the export of the products. Currently, there are 26 companies that are manufacturing pharmaceutical products by maintaining GMP standards. The rest are also in the process of obtaining GMP as the DDA has urged all non-GMP certified companies to come under GMP certification by the end of the year. <br />
	<br />
	<br />
	<img alt="" border="1" height="457" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/drugs_11.jpg" vspace="5" width="401" /><br />
	<br />
	<strong>COVER STORY <br />
	</strong><br />
	<br />
	<strong>‘The Growth of Nepali Pharmaceutical Industries is Quite Appreciable’ <br />
	</strong><br />
	<img alt="" border="1" height="330" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/BABURAM-BHATTARAI.jpg" vspace="5" width="300" /><br />
	<br />
	<strong>BABURAM BHATTARAI <br />
	President <br />
	Nepal Chemist and Druggist Association <br />
	(NCDA) <br />
	<br />
	</strong><br />
	<br />
	<strong>How do you see the growth of Nepali pharmaceutical industries in recent times? <br />
	</strong><br />
	<br />
	The growth of Nepali pharmaceutical industries in recent time is quite appreciable. Around 42 per cent home demand is fulfilled by them so it can be considered satisfactory. I think the Nepali medicines are doing good business because the products are qualitative and the demand is increasing on a regular basis. I see a golden future for Nepali pharmaceutical products. <br />
	<br />
	As far as my knowledge is concerned, the level of consumption for most of the products made in Nepal is satisfactory and so is their supply system. However, most of the companies are producing the same types of medicine which has created unhealthy competition. <br />
	<br />
	<br />
	<strong>How is the production and export-import business of pharmaceutical products in Nepal? <br />
	</strong><br />
	<br />
	The history of allopathic medicine in Nepal is less than 100 years old. Medicine was used with the start of the modern medical system and during that time, pharmacy products were imported from different countries while such services were limited to only the big cities. The situation has changed now and we have many pharmaceutical companies established in our own country. Imported as well as home grown products are available even in the remote areas of the country today. However, it has not been smooth yet and the mishandling and misuse of drugs is a great threat. <br />
	<br />
	<strong><br />
	Counterfeit drugs is said to be one of the biggest challenges faced by the pharmaceutical industry. What is NCDA doing towards it? <br />
	</strong><br />
	<br />
	I agree with this statement to some extent. Basically, there are two reasons behind the availability of counterfeit drugs. The first one is that we share a open border with India and the second is that there are so many unregistered medical stores all over the country. The government monitoring system has not been effective enough. I don’t think that the NCDA member firms are involved in the supply of such medicines. The government should regulate these unregistered medical stores and bring them under the purview of the legal system. NCDA, on its part, is planning to release the list of registered medical stores and products available at these stores, on its website. It is always ready to support government initiatives to control the availability of counterfeit drugs. <br />
	<br />
	<br />
	<strong>Consumers often complain that the medicine prices vary from pharmacy to pharmacy. It is also said that the margin of profit is kept very high in pharmaceutical products. What do you have to say about such practices? <br />
	</strong><br />
	<br />
	I cannot agree with your statements. NCDA was established with the mission to supply qualitative, effective and safe drugs at affordable prices and we are always conscious regarding the uniformity of medicine prices. However, there may be some misuses from unregistered stores despite all our efforts and commitments. NCDA is committed to endorse the sale of medicines at their justified prices. However, if there are any complaints on account of price manipulation, please do inform to any of our NCDA branches so that we can regulate such pharmacies. <br />
	<br />
	<br />
	As for the margin of profit being high in pharmaceutical products, this is nothing but plain rumor. We are keeping the profit margin scientifically with the approval of the Nepal Government. <br />
	<br />
	<br />
	<strong>A great amount of medicines are sold on a daily basis without the doctors’ prescriptions. How risky is this for public health? <br />
	</strong><br />
	<br />
	This is a serious question that you have brought up. We all are quite aware about the health service standards in our country .We have a very limited numbers of doctors and that too, they are available only in the urban areas. Therefore, scores of villagers do not have access to services provided by doctors. This explains the situation of no prescriptions where there are no doctors. You have to acknowledge the fact that the patients have to get medicines anyway. Nowadays, the paramedics (HA, CMA &amp; ANM) are dispensing medicines in the remote areas. The government is not bothered about this problem and many serious health hazards occur due to the state’s apathy towards health services. <br />
	<br />
	<br />
	<strong>The shortage of general medicines in rural areas often inconveniences many families in Nepal. What’s your take on this? <br />
	</strong><br />
	<br />
	Although our business is a service business, there is a profit motive as well. The few pharmacy assistants and professionals that we have in the country confine themselves to the densely populated areas because they want to do good business. However, there are so many remote areas where there is no storage of general medicines but the problem is that the pharmacy dispensers are not available in such areas. I have also repeatedly drawn the attention of the concerned authorities to run orientation training targeting these areas so that the problem of dispensing medicines can be solved to a large extent. <br />
	<br />
	<br />
	<strong>How wealthy are we in terms of human resources especially in the production, marketing and distribution of pharmaceutical products? <br />
	</strong><br />
	<br />
	As far as the availability of human resources is concerned, let me assure you that many pharmacists and pharmacy assistants are produced every year. The number of pharmacy colleges is also increasing. Most of the pharmacists are employed in industries and academics whereas the pharmacy assistants are engaged in dispensaries. But the tragedy is they are not available in the remote areas. <br />
	<br />
	<br />
	<strong>The Nepali pharmaceutical industries asked the government to stop importing Indian drugs sometime ago. Can it be considered reasonable in a liberal market economy? <br />
	</strong><br />
	<br />
	Nepal is a small country in comparison to our neighbors and the market of any product is limited. It is not bad to promote indigenously produced medicines until our economy is competitive enough to export. Billions of rupees have been invested in the pharmaceutical industries. I think it’s the duty of the government to support these companies by whatever means possible. <br />
	<br />
	<br />
	<strong>What is the possibility for exports of Nepali drugs abroad? What are the challenges in this regard? <br />
	</strong><br />
	<br />
	I don’t see any possibility of Nepali medicines for export in the current context. Even though all the companies of Nepal follow the WHO GMP standard, different countries may have different technical standards. The private sector effort to export medicines may not be an effective one. The government initiation is the primary requisite and a must to realize export efforts. <br />
	<br />
	<br />
	<strong>COVER STORY <br />
	<br />
	<br />
	‘The Overall Quality of Nepali Medicines is at Par with International Standards’ <br />
	</strong><br />
	<br />
	<img alt="" border="1" height="330" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/RADHA-RAMAN-PRASAD.jpg" vspace="5" width="300" /><br />
	<br />
	<strong>RADHA RAMAN PRASAD <br />
	Director General <br />
	&amp; Chief Drug Administrator <br />
	Department of Drug Administration <br />
	</strong><br />
	<br />
	<br />
	<strong>How do you see the growth of Nepali pharmaceutical industry in recent times? <br />
	</strong><br />
	<br />
	New industries are entering into the market but most of them are producing ‘me too’ drugs. The competition is heightening among such kind of drugs. The trend of new industry registration shows that producers are willing to produce similar kind of products that already exist in the market. Such a trend is more common than producing vital drugs and competing with imported products which may help reduce imports and market share of imported drugs. Although new industries have taken industry establishment reference letter for producing large volume drugs, further progress is not seen in the actual establishment of industries. It is very important to produce large volume drugs with quality but little progress has been made towards it. Even though producers are promising to do it, it has not happened till date. <br />
	<br />
	<strong><br />
	New industries are being established every year. Do you see potential in them to make the country self sufficient in drugs and reduce imports? <br />
	</strong><br />
	<br />
	It is not that they do not have the capacity to produce to the extent of self sufficiency but it is limited to specific drugs. The environment for producing numerous drugs to the extent of self sufficiency has already been created but not for all medicines. Nepali companies have a market share of 43 per cent. If vaccines, contraceptives, ARV (Anti Retroviral), large volume drugs and few others are excluded, Nepali companies will have a bigger market share. Some companies have an almost equal market position as Indian companies. Ethical promotions and marketing strategies have helped them create a niche in those sectors. Nepali drug industries have their presence in almost every part of the country. <br />
	<br />
	<br />
	<strong>Around 60 per cent of the drugs market is covered by the foreign companies. How can the share of Nepali industries be increased? <br />
	</strong><br />
	<br />
	The consumers of medicines are mostly the prescriber groups. So, the confidence of the doctors and prescribers needs to be won with ethical marketing and by offering qualitative drugs. This will help to increase the market share. However, only over-the-counter sales and promotion through pharmacies cannot deliver good results compared to ethical promotions. <br />
	<br />
	<br />
	<strong>Although imported drugs are said to be expensive than locally produced ones, why aren’t Nepali medicines preferred by the prescribers? How can Nepali products be promoted? <br />
	</strong><br />
	<br />
	It is necessary to look minutely into actual pricing. Some local drugs may be cheaper but it is difficult to say that products from established brands are actually cheaper. Such products are priced similar to the imported drugs. Quality assurance is the most important factor for promoting Nepali industries. Numerous producers and their associations as well as the DDA have moved towards quality assurance through various measures like complying with the WHO GMP standards. All the stakeholders are moving ahead keeping in mind quality as their central motive. It is a matter of satisfaction that Nepali industries are committed to quality assurance and they too are producing international standard drugs. Even though few samples have been found lacking quality in the market due to some reasons, I think the overall quality of Nepali medicines is at par with international standards. Many industries are now shifting to new locations, upgrading their technologies and carrying out renovation of their production units. Once quality is promised to the consumers, the market share will definitely increase. <br />
	<br />
	<br />
	<strong>It is often said that substandard medicines are being imported and expired medicines sold in pharmacies. What is your take on this situation? <br />
	</strong><br />
	<br />
	At times, it’s not only the drugs imported from India but also the Nepali drugs that are found to be below standard. However, we cannot generalise the situation and say that all products lack quality. There have been cases like discovering some particles on tablets and solidified dry syrup but these are exceptions. We have not found the entire batch of a particular medicine failing in case of one or two samples that are found defective. If the temperature is not adjusted as per the requirement during storage, some medicines change colour naturally over time. A pharmaceutical company produces drugs which is transferred to distributors, then to retailers and finally to the consumers. If the quality is not assured in the supply chain, some complications may arise despite the producer maintaining optimum quality. The producers are slowly getting conscious about it and the DDA too is committed to move towards this direction. <br />
	<br />
	<br />
	Regarding the sales of expired drugs, it is very important to maintain a good pharmacy and dispensing practice. The pharmacy workers must properly look at the prescriptions and scrutinise the medicines before selling them and also give proper information to the buyers. When this system is not practiced, there is a chance of expired drugs getting sold. Substandard and expired drugs must be filtered at the time of sales. At present, there are inspections carried out by the Department of Commerce &amp; Supplies and District Administration Offices to detect sales of expired drugs. Such activities have definitely brought a lot of awareness among consumers and also controlled such incidences. <br />
	<br />
	<br />
	<strong>Counterfeit drugs is also said to be one of the biggest challenges faced by the industry. What is DDA doing towards it? <br />
	</strong><br />
	<br />
	We have not found counterfeit drugs as of now. It’s true that we have found some medicines that are not registered here but they are not counterfeit in the true sense of the term. Such unregistered drugs are confined to around four-five types which have high difference in their prices such as Ciprofloxacin, Omeprazole and some aphrodisiac drugs. We have been carrying out awareness campaigns asking customers to mandatorily take bill on the purchase of drugs which will prevent buying of unauthorised drugs. A conscious citizen must as for bill on purchase of medicines and also seek information about the medicines. <br />
	<br />
	<br />
	<strong>What is the level of competition of Nepali pharmaceutical companies among themselves as well as with the foreign companies? <br />
	</strong><br />
	<br />
	The competition has always been there but it should now focus on quality while competing with ‘me too’ drugs in the market. Earlier, cardiac medicines were not produced within Nepal but now we have them. We also did not have the doctors’ confidence about higher antibiotics but now they prefer Nepali products. These are definitely very good signs. We have been monitoring and conducting inspection of Nepali industries, overseeing their quality and standard etc so we encourage using Nepali drugs with confidence. This confidence has also led Nepali industries beginning to tap the foreign market in recent times. <br />
	<br />
	<br />
	<strong>Raw materials as well as finished drugs are being imported at present. Which one is beneficial for our market situation? <br />
	</strong><br />
	<br />
	The Nepali industries are compelled to import raw materials to produce drugs here because we are not API (Actual Pharmaceutical Ingredients) manufacturers. Therefore, it is necessary to import raw materials. In the current global context too, there is no base to deny import of any products. When the market is dictated by the Nepali industries, the foreign companies that cannot compete will automatically exit. <br />
	<br />
	<br />
	If Nepali companies can produce drugs here, the human resource can be rightly utilised. The availability of human resource is cheaper in Nepal than anywhere else. Qualified human resource is being produced within the country and at the same time, semiqualified human resource is equally available. We have a condition to import quality raw materials at competitive prices. It also creates employment not only in the production line but also in the marketing of products. The industries also pay taxes to the state so from that perspective, local industries must be promoted. <br />
	<br />
	<br />
	<strong>It is said that there is huge potential for export of medicines to India along with other markets. How much have we cashed in on this potential? <br />
	</strong><br />
	<br />
	That potential has not been adequately explored as of now. A few industries that have reached a certain level of success in the local market have started looking towards those markets. All the drug producers must collectively move towards this direction to explore the potential. <br />
	<br />
	<br />
	<strong>COVER STORY <br />
	<br />
	</strong><br />
	<strong>‘We have Gained Trust from the Consumers because of our Quality Products’ <br />
	<br />
	<br />
	<img alt="" border="1" height="214" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/MAHESH-GORKHALI.jpg" vspace="5" width="300" /><br />
	<br />
	MAHESH GORKHALI <br />
	President <br />
	Association of Pharmaceutical <br />
	Producers of Nepal (APPON) <br />
	</strong><br />
	<br />
	<br />
	<strong>How do you see the growth of Nepali pharmaceutical industry in recent times? What is the kind of investment required to establish a pharmaceutical industry at present? <br />
	</strong><br />
	<br />
	As per an estimate, we are growing at around 15 to 20 per cent annually. The cost of establishing a pharmaceutical industry in the country generally depends on the number of segments that the investors target to operate with. Pharmaceutical industries cover different segments like – tablets, capsules, liquids, injectables etc. If an industry tries to cover all these segments, high investment is required. At the same time, low investment can enable an industry to operate with a single segment. As per our calculation, anywhere from Rs 25 to 300 million investment is required for a company producing tablets, capsules and liquids depending upon the choice of the machinery equipments, building, location etc. Establishing an industry in city areas is usually costlier when compared to the terai or hilly region. <br />
	<br />
	<br />
	<strong>How is the production and export-import business of pharmaceutical products doing in Nepal? <br />
	</strong><br />
	<br />
	There are altogether 45 Nepali companies operating in our market. Investors generally produce materials which they can sell even if they have a high production. There is a wide variant of medicines available in the market and we are capable of producing some of these, for example, Paracitamol tablets which are popular as citamol in Nepali households. To meet the remaining demand, we import a good amount of medicines from India, Bangladesh and some other countries. The export potential of Nepali medicines has not been tapped as yet. Nepali pharmaceutical companies occupy around 40-45 per cent market share while the rest is of foreign companies. Our companies can increase their market share only if we could expand our businesses massively. If we do not want to be contended only in the national market, we must grow and focus on exports. <br />
	<br />
	<br />
	<strong>How favorable is the government’s policy regarding the pharmaceutical industry? <br />
	</strong><br />
	<br />
	We don’t find a clear-cut policy of government for the development of Nepali pharmaceutical industries. As such, the pharmaceutical market is rapidly growing internationally and we are obliged to introduce and produce newer medicines or molecules to survive in the market. Since we lack manpower in developing newer molecules, we try to import them as soon as they are developed. Department of Drug Administration (DDA) under the Ministry of Health regulates our companies but it usually hesitates to provide a license whenever we apply to import a new molecule. It says that the molecule is not mentioned in Pharmacopeia - a book where every medicine is featured. Actually, medicines are featured in Pharmacopeia sometime later after the invention. It’s the responsibility of the government to either perish or nourish the pharmaceutical sector as the citizens of this country have the right to have proper medications. By permitting to import newer molecules, providing incentives or soft loans and declaring tax holidays for some years will definitely create good environment for the pharmaceutical sector. The government must also act as a responsible body by addressing problems such as the shortage of powerhouse, in consultation with the stake holders. I think that the Ministry of Health has so many responsibilities and hence, they may not be able to look after the manufacturing industries properly. Nonetheless, I believe they will formulate some good policies in the near future to encourage new investors when they realize our potential as a growing industry. <br />
	<br />
	<br />
	<strong>What are the challenges of the Nepali pharmaceutical industry in meeting the demand of pharmaceutical products in the market? <br />
	</strong><br />
	<br />
	Around 250 companies are involved in importing medicines from other countries so the biggest challenge we have is the faith of the consumers on Nepali products. The pharmaceutical market normally grows with the increase in the prescriptions or the number of the prescribers. We have gained that kind of trust from our consumers because of the quality products we deliver. All the leading doctors and medical experts prescribe Nepal made products which means the main challenge is already taken care of. Another challenge is to introduce newer molecules. <br />
	<br />
	<br />
	We need some lab testing which are often tedious, time consuming and expensive. We need to maintain refresh standard for which we don’t have the facilities but that can be procured. Furthermore, we have to develop our human resources including the marketing professionals so we are conducting different trainings and workshops to improve their capabilities. <br />
	<br />
	<br />
	<strong>What is the benefit of importing pharmaceutical products from India? What kind of competition have domestic factories been facing with hundreds of Indian products and companies in the domestic market? <br />
	</strong><br />
	<br />
	While moving from illness to wellness in the case of human health especially, pharmaceutical products have proved to be one of the essential elements in curing diseases. However, we don’t produce all kinds of medicines. For instance, we don’t produce saline water which is considered as an urgent medication for many diseases. We import it mainly from India as medicines such as this are beneficial to human health. <br />
	<br />
	<br />
	Competition between companies is natural in every business and pharmaceutical industries are no exception. Competition with importing companies is ethical in our business. However, there seems to be a fierce competition between the Nepali companies because of similar medicinal products and limited customers. Everybody wants to promote his own brand and the more number of companies, the more number of brands are there. <br />
	<br />
	<br />
	<strong>Although imported drugs are expensive than locally produced ones, why aren’t Nepali medicines prescribed much? <br />
	</strong><br />
	<br />
	This is untrue as majority of the doctors are prescribing our medicines. This is the reason why we are having 40- 45 per cent market share despite having competition from so many foreign companies. There has been a good promotion of our medicines and the doctors prioritize them whenever they prescribe the medicines to the patients. <br />
	<br />
	<br />
	<strong>How wealthy are we in terms of human resources especially in the production, marketing and distribution of pharmaceutical products? <br />
	</strong><br />
	<br />
	Initially, we had a real problem with human resource be it the marketing or production areas. It was very hard to train young graduates especially those without a science background. Thus the promotion of the products used to be a difficult task in the past. <br />
	<br />
	<br />
	In production also, there were not enough graduates who could earlier meet our criteria. However, there are 17 - 18 colleges now with pharmacy as a major subject. They are producing a good number of bachelors every year that can be utilized in pharmaceutical industries. We don’t have scarcity of such manpower now. <br />
	<br />
	<br />
	However, we don’t have quality manpower who could import newer molecules from foreign countries. Good companies have been providing trainings for their employees and sending them to different countries like Japan, Bangladesh and India for their capacity enhancement. They are improving and we hope that we will produce the required manpower for this sector as well. <br />
	<br />
	<br />
	<strong>It is said that the margin of profit is kept very high in pharmaceutical products. What do you have to say about that? <br />
	</strong><br />
	<br />
	Even though it seems so, it is not true. Actually, certain products have really high margins mainly because of the high expenses involved in their production. To produce a single medicine, we import different raw materials including chemicals and packaging materials. Besides, producing quality medicine is a very lengthy and time consuming process. There are other costs involved too which make medicines more expensive, for example, the marketing aspect. Whatever is the margin, the fact is that the product must be sold because without the sale of a product, there can be no profit. <br />
	<br />
	<br />
	<strong>It is said that there is a huge potential for export of medicines to India along with other markets. How much have we cashed in on this potential? <br />
	</strong><br />
	<br />
	Let me give you an example when my company used to export medicines in India a few years ago. We had applied to the Indian authorities for exporting medicines to which they agreed and we started to send our medicines. However, despite having all the certification and documents of our products, they would put our stock in their quarantine office once it reached Raxaul in India. They would say that approval can be provided only after some lab testing but by the time they did so, it would be already six months late. Another three months would be spent for lab testing so it’s only after nine months that we would be able to get the approval to supply our medicines in the Indian market. The same process would apply for each consignment. After all this, the Indian retailers would not agree to keep medicines having less than six months of validity. It continued for two years and we had a business of Rs 50-60 million only. After two years, we could not undergo the criteria once they applied a new system for Nepali companies. It became costlier and that is when we stopped exporting our products. However, we are again targeting India for the expansion of our products and hopefully, we will be successful in our endeavour. <br />
	<br />
	<br />
	<strong>Raw materials as well as finished products are being imported at present. Is it beneficial for our market? <br />
	</strong><br />
	<br />
	Yes, it is. We cannot produce medicines without raw materials and finished products since we don’t have the big plants to produce chemical and other essential materials. We don’t need to produce raw materials ourselves because of the limited market we have. Unless we expand our market, we can continue to import these items. <br />
	<br />
	<br />
	<strong>COVER STORY <br />
	</strong><br />
	<br />
	<strong>‘Maintaining GMP and GLP Standards will give Credibility to our Products Internationally’ <br />
	<br />
	<br />
	<img alt="" border="1" height="204" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/MOHAN-PRASAD-AMATYA.jpg" vspace="5" width="300" /><br />
	<br />
	MOHAN PRASAD AMATYA <br />
	Chief <br />
	National Medicine Laboratory <br />
	<br />
	<br />
	</strong><br />
	<strong>What is the major function of the National Medicine Laboratory? <br />
	</strong><br />
	<br />
	Our main objective is to ensure that safe and effective medicines are available in the Nepali drug market. Though it is the Department of Drug Administration (DDA) that awards license to pharmaceutical factories, it is our responsibility to test and evaluate the standard of their laboratories and drugs and refer them for the registration. Factories should obtain market license for each of their products. We develop Reference Standard and make it available to the pharmaceutical companies and laboratories. We also inspect retail and wholesale pharmacies to check the quality of drugs. The price monitoring of the marketed drugs is within our scope of work and we deploy drug inspectors for this task. They visit the market on a regular basis, purchase drugs from the pharmacies and bring it to us. We inspect quality, composition, packaging and every other detail of these drugs. If such drugs are found below the standard, we report it to the DDA which recalls these products from the market. Similarly, we visit laboratories and inspect products of foreign countries before importing them to Nepal. <br />
	<br />
	<br />
	<strong>Pharmaceutical companies also have their own laboratories. How good are they? <br />
	</strong><br />
	<br />
	A pharmaceutical company must set up its own laboratory. We visit their laboratories and conduct a thorough inspection. Aspects like hygiene of the lab and precautions taken for the safety of its manpower, availability of equipments and trained manpower, location of the lab and its space, structure of the building, availability of water and other resources are taken into account while giving approval to the laboratories for production. We visit them regularly even after the approval Therefore, we must say that existing labs have been maintaining the required standard. Of course, there is a lot of scope for improvement and it’s a continuous process. All in all, they are good. <br />
	<br />
	<br />
	<strong>Out of 49 pharmaceutical factories operating in Nepal, only 26 have been producing pharmaceutical products under the World Health Organisation’s (WHO) Good Manufacturing Practice (GMP). Why is this number so low? <br />
	</strong><br />
	<br />
	It’s been about 8 years that Nepal became a member of the WTO. However, our pharmaceutical companies were established long before we got associated with the WTO. At that time, our aim was to encourage people to invest in the pharmaceutical sector so that the country can gradually substitute imported medicines. The procedure to obtain operating licenses was not that strict. Now that the country has entered an agreement with the WHO to maintain its GMP standard, we could not ask them to upgrade their laboratories and manufacturing units overnight. It requires huge capital for a company to be at par with the international GMP standard. The DDA has been asking the existing factories to upgrade themselves time and again by allowing a certain time-frame to them. In fact, the DDA has directed all existing pharmaceutical companies to upgrade themselves by the end of this year. Because of this provision, many companies have applied for GMP and few of them have already received the certification. However, there are still some companies that have not applied for this process. I believe the DDA will take adequate measures against such factories in the future. <br />
	<br />
	<br />
	<strong>Have all the pharmaceutical companies been maintaining Good Laboratory Practices (GLP)? <br />
	</strong><br />
	<br />
	It is very essential to maintain GLP to establish a pharmaceutical industry. Companies that do not maintain GLP are not allowed to begin production. Before any pharmaceutical product is produced, we check whether the laboratory has used standard raw material and put the lab in the suitable location and purchased good quality machines or not. When the product is made, we analyse its composition, packaging, punching, amount of active drug in the medicine and its storage. These aspects fall under GLP and we make sure that factories are up to the mark on each of these aspects before granting it permission to operate. To make our existing factories concerned about GLP, we conduct trainings on this aspect regularly. <br />
	<br />
	<br />
	<strong>What special benefits will we have by producing pharmaceutical products in line with the WHO’s GMP and GLP guidelines? <br />
	</strong><br />
	<br />
	Maintaining GMP and GLP standards will give credibility to our drugs in the international market. It will eventually pave way for the export of our products. Though there are only 26 pharmaceutical manufacturing companies that have been producing products maintaining GMP standard, about five companies are in the process to get the certification. We will be visiting their manufacturing plants and the laboratories to refer for the certification. <br />
	<br />
	<br />
	<strong>So, we do have an opportunity to export our products. <br />
	</strong><br />
	<br />
	Export is not just limited to quality of the drug. Every country has a specific policy about importing drugs from another country. If our country can fulfil those clauses, we won’t have problem in exporting our products. Even India that has been exporting its products to almost all corners of the world, is willing to import drugs from us. But it has set some clauses regarding drugs import. If we can fulfil these clauses, India can be a potential market for our medicines. Therefore, export is more related to the policy of a specific country. Some of our companies are trying to export drugs to Singapore and Malaysia as well. We are very rich in resources for pharmaceutical products. All we need is skilled manpower and the technology. Provided these aspects, we have huge potential for export. <br />
	<br />
	<br />
	<strong>What sort of drugs are we strong in and where do we still need to do research? <br />
	</strong><br />
	<br />
	The domestic production has been able to fulfil 60 per cent of the current demand. For the remaining 40 per cent, we have to be dependent on imports. We are strong in therapeutic drugs but we still have to be dependent on imports for injectable drugs and biological products. It takes a huge capital and expert manpower to produce such drugs. The labs need to be sterilised and made aseptic to produce these medicines. Even the building has to be designed in a specialised way for such drugs. There are only two or three companies that have been producing biological products. Most of the demand for injectable and biological drugs is fulfilled through imports. <br />
	<br />
	<br />
	<strong>What is the status of human resource in the pharmaceutical sector? <br />
	</strong><br />
	<br />
	In the last few years, pharmaceutical sector has been witnessing a growth in the quantity of trained manpower. The existing four universities of our country have been producing manpower for this sector. Kathmandu University (KU) has been operating classes of pharmacy at the Bachelor, Masters and the Doctorate levels. Tribhuvan University (TU) also runs a bachelor level programme while Purbanchal Univeristy (PU) has given affiliation to about 19 colleges to operate pharmacy classes. Similarly, Pokhara University also has a Bachelor of Pharmacy programme. So, around 500 students graduate in this sector annually. <br />
	<br />
	<br />
	<strong>Where do these graduates get job placement? <br />
	</strong><br />
	<br />
	A large number of students with Bachelor degree in pharmacy open their own pharmacies while some others work in pharmaceutical factories, laboratories and hospitals. A few of them pursue a teaching career but most graduates from the Institute of Medicine (IOM) and Kathmandu University go abroad in search of greener pastures. The flow of application for establishing pharmaceutical factories was high a few years back but the present political situation has been a hindrance in establishing new factories. Therefore, the graduates find the overseas market better for greater exposure. If the country could emerge from the present political turmoil, they too can find employment opportunities in their own country. <br />
	<br />
	<br />
	 </p>',
			'published' => true,
			'created' => '2012-08-15',
			'modified' => '2012-10-10',
			'keywords' => '',
			'description' => 'Nepal’s pharmaceutical expense is at par with other South Asian countries, thanks to the increase in the number of pharmaceutical companies and their production. In 2008, the total per capita pharmaceutical expenses was US$ 6.96 while the total amount of pharmaceutical expenses stood at Rs 13.09 billion in Nepal',
			'sortorder' => '558',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 12 => array(
		'Article' => array(
			'id' => '650',
			'article_category_id' => '40',
			'title' => 'Open Skies Of Nepal',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	<strong>By Pinaki Roy <br />
	<br />
	</strong><br />
	<img alt="coverstory july" border="1" height="217" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/coverstory(1).jpg" vspace="5" width="400" /><br />
	<br />
	<br />
	The flow of international passengers in the first quarter of 2012 has been impressive enough to raise optimism among the concerned stakeholders. The statistics between January and March 2012 is an indication that international air service and passenger movement to and from Nepal is set to register a significant increase this year compared to 2011. A total of 717,182 international passengers (see table) availed air services via Tribhuvan International Airport (TIA) – the only international airport of Nepal – in the first three months of 2012, says Raj Bahadur Maharjan, Director at TIA’s Flight Approval Department. <br />
	<br />
	<br />
	There has been an increase of 84,459 passengers when compared to the first quarter of 2011, thereby registering a growth of 13.35 per cent over the same period of the previous year. Monetarily speaking, the total annual international flight service business in Nepal is worth an estiamted Rs 80 billion. <br />
	<br />
	<br />
	Ratish Chandra Lal Suman, General Manager at TIA, says, “The number of passengers has increased in the first quarter of this year also because of new airlines coming into operation and providing added air services.” He attributes the increment both to the increase in inbound tourists and the outbound migrant workers to different countries. Even though GMG Airlines towards the end of 2011 and Kingfisher Airlines in February 2012 ceased to operate in Nepal, their absence was promptly compensated by Indigo (October 2011) and RAK Airways (February 2012). <br />
	<br />
	<br />
	The number of flights that served these passengers was 5,693 (up by 9.69 per cent from 5,190 flights during the same period last year). While 2,846 flights made outbound journeys, the number of flights that landed at the TIA stood at 2,847. A total of 368,934 passengers flew out of Nepal while another 348,248 landed in the country from January to March this year, a growth of 11.48 per cent and 15.40 per cent respectively when compared to the same period of 2011. In the first quarter of the previous year, 330,954 passengers took outbound flights while another 301,769 passengers entered Nepal via inbound flights making a total of 632,723 passengers who availed international air services from January to March 2011. <br />
	<br />
	<br />
	This growth is certainly encouraging coming at a time when the International Air Transport Association (IATA) left this year’s global airline profit forecast unchanged at $3 billion, or 0.5 per cent of industry revenues. At a summit of airline chiefs being held this year in Beijing, this stable outlook masks a widening gap between regions with “only North and South America set to improve and the rest of the world seeing reduced profitability.” <br />
	<br />
	<br />
	<strong>The Year Gone By <br />
	</strong><br />
	<br />
	International air passengers flying via the Nepali sky crossed 2.7 million for the first time in 2011. These passengers travelled via Nepal with 28 international airlines operating in Nepal last year, according to Maharjan. He said that additional airlines such as IndiGo, added frequency of flights and passenger occupancy increased the number of air passengers using the Nepali route. The year 2011 saw 2.7 million international passengers flying out and landing in the country on board 22,791 flights. A total of 28 airlines flew 2,700,027 passengers (see table) for the year, says Maharjan. This was an increase of 10.81 per cent in comparison to 2010 when 2,436,558 passengers availed international air services in Nepal. <br />
	<br />
	<br />
	While 1,407,512 passengers flew out of the country, the passengers entering the country numbered 1,292,515. A total of 11,393 flights departed while 11,398 flights entered Nepal during the period making a total of 22,791 flights for the year. The only new airline that started operations in 2011 was Indigo. Qatar Airways carried the most number of passengers – 277,796 on 2,374 flights while Jet Airways was second with 272,560 passengers on 2,191 flights. Nepal Airlines Corporation was third with 202,041 passengers on 1,619 flights. <br />
	<br />
	<strong><br />
	Migrant Worker: The Main Market </strong><br />
	<br />
	<br />
	With more Nepalis departing for jobs abroad and increase in tourist movement, international airlines operating in Nepal have witnessed this rise in passenger movement in recent times. The airline companies claim that they are equally focusing on all the segments, which include business travellers, tourist, VFR (visiting-friends and relatives) and workers. However, it’s no secret that migrant workers comprise around 80 percent of the total passengers availing international air services in Nepal. Most of the international airlines flying to and from Nepal are more focused on manpower markets rather than the tourism markets. Of the total international flights, the airliners carry only 20 per cent tourists, observe industry analysts. <br />
	<br />
	<br />
	<strong>Contribution to Tourism </strong><br />
	<br />
	<br />
	International carriers from India accounted for the largest share of inbound tourism in Nepal in the previous year. According to TIA, Indian carriers flew around 48 per cent of all tourists visiting Nepal in 2011 – dubbed as Nepal Tourism Year (NTY). Indian travellers alone grew by 39 percent to 145,338 in 2011, a 26.67 percent share in total tourist arrivals to Nepal. As per TIA statistics, five Indian airlines—Spice Jet, Jet Airways, Air India, Jet Lite and Kingfisher—figured among the top 10 carriers bringing tourists to Nepal. The total tourist arrivals via air numbered 544,985 in 2011 that entered Nepal on board 28 international airlines. <br />
	<br />
	<br />
	Indian budget airline Spice Jet – that started flying to Nepal in October 2010 – was the largest carrier of tourists into Nepal in 2011, accounting for 15.28 percent of the arrivals. Jet Airways and Air India were the second and third largest tourist carriers respectively accounting for 12 percent and 8 percent tourist arrivals. Two legacy carriers—Thai Airways and Qatar Airways—fell in the inbound tourism rankings in 2011. While Thai’s market share shrunk to 8 percent from 11 percent in the previous year, the share of Qatar Airways slipped to 7 percent. Etihad Airways and Gulf Air, two more carriers from the Middle East, lost their slots in the top 10 list in 2011. <br />
	<br />
	<br />
	The healthy growth of Indian tourists to Nepal attracted yet another Indian private airliner Indigo Airlines that started New Delhi-Kathmandu flights in October last year making it the sixth Indian private airliner flying between Nepal and India. Currently, Air India, Jet Airways, Jet Lite, Spice Jet and Indigo fly around 130 flights a week between Kathmandu and various Indian destinations while Kingfisher Airlines has stopped flying to Nepal for the last few months. Needless to say, the increase in the number of Indian airliners flying to Kathmandu has encouraged the aviation sector in Nepal immensely and boosted the country’s tourism prospects. A total of 207,961 tourists entered Nepal via air in the first four months of 2012, a growth of 23.1 per cent over the same period last year. A total of 168,958 tourists had entered Nepal from January to April in 2011. <br />
	<br />
	<br />
	<strong>Direct Flights <br />
	</strong><br />
	<br />
	Broadly, any business or industry can be categorised either as monopoly or market-oriented. Due to the inherent nature of international air transport industry, every country enjoys certain exclusive rights, which indirectly helps them monopolise some air routes. This right, if exercised, could be of tremendous benefit to a country like Nepal. “Direct flights between Nepal and other countries can play a key role in bringing increased number of tourists into our country,” an industry insider opines. <br />
	<br />
	<br />
	For instance, none of the 27 airlines flying into Nepal have the right to operate direct long distance flights between Nepal and lucrative destinations like Europe, Japan and Australia. They can operate only connecting flights whereas Nepal gets the sole privilege of operating direct international flights from the country. As foreign travellers have no choice of direct air connectivity, air travel costs become higher while coming to Nepal. Mihin Lanka, a Sri Lanka-based airline has expressed its interest to operate direct flights between Colombo and Kathmandu. This was conveyed to Prime Minister Baburam Bhattarai by Lankan President Mahinda Rajapaksa on the sidelines of the recently concluded environmental summit in Rio de Janeiro, Brazil. Air Service Agreement (ASA) between Nepal and Sri Lanka allows Sri Lanka-based airlines to operate up to 14 flights a week in the Colombo-Kathmandu-Colombo sector. <br />
	<br />
	<br />
	<strong>State of the National Carrier </strong><br />
	<br />
	<br />
	The status of the national carrier – Nepal Airlines Corporation (NAC) – in terms of international flight operations is disappointing to say the least. Around 95 percent of the international aviation market in Nepal is in the hands of foreign air operators. “Our market share is worth less than Rs 4 billion out of the international flight service business of Rs 80 billion annually,” says NAC Spokesperson Saroj Kasaju. The market share of NAC shrank to an all-time low in 2011 in terms of tourist carriage. The national flag carrier held the 10th position with a mere 3.05 percent while it had a market share of 4.87 percent in 2010. The eroding market share of NAC, according to travel trade entrepreneurs, is due to its inability to expand its fleet while the fact remains that the prerequisite for business expansion in airline industry is acquisition of aircraft, especially for operation in the lucrative international sector. In 2001, NAC was a leading carrier accounting for 28 percent of inbound tourists. <br />
	<br />
	<br />
	With more international airlines entering the Nepali skies and NAC’s track record of flight delays, travel agencies say the national flag carrier has become the last choice among visitors. Currently, NAC operates its international flights with two ageing Boeing 757s, either one of which is usually offline due to technical glitches and periodic C-checks. The carrier now flies to only five international sectors – Dubai, Doha, Bangkok, Kuala Lumpur and Hong Kong – down from 21 destinations in 12 countries with four Boeings till 1993. The airline now plans to start flights to Damam in Saudi Arabia. It also plans to start flying to Kuala Lumpur seven-days-aweek besides launching direct flights to Doha, Qatar. <br />
	<br />
	<br />
	The corporation currently spends Rs 1.39 billion on repairs alone for the two planes – Boeing 757-9N ACA Karnali and ACB Gandaki – which it has in its ‘fleet’ right now, says Kasaju. “Out of the estimated income of Rs 4.52 billion from international flights in the current fiscal year, 23 per cent of the total amount has gone into the repairs of the two Boeings,” he adds. The cost of repairs has gone up considerably in the last five years due to the fast ageing of the two Boeings. This expense is several times more than what the private carriers spend on repairs and maintenance which is six to 10 per cent of their earnings from flights. <br />
	<br />
	<br />
	A strong and competitive national flag carrier can serve as a key vehicle of the country’s economic and tourism development. Kasaju says, “NAC has become a factory without machines due to lack of aircraft but hasn’t gone in loss yet.” He cautions though that the corporation can land in major financial trouble if aircraft is still not added to its fleet. <br />
	<br />
	<br />
	However, all is not lost as Kasaju reiterates that the corporation is still making profit thanks mainly to its ground handling business. The corporation provides such service to 23 foreign airlines that fly to Nepal. From a domestic perspective, the corporation is expected to get five units of 19-seater aircraft and three units of 56-seater aircraft from China on grants and concessional loan. The airline management is scared of an imminent demise of the company as its current basis of survival – ground handling business – is in jeopardy due to a move by the Civil Aviation Authority of Nepal (CAAN) to possibly involve the private sector and allow competition. <br />
	<br />
	<strong><br />
	Ground Handling Services at TIA </strong><br />
	<br />
	<br />
	CAAN is currently holding discussions with other government agencies and stakeholders to allow the private sector to operate ground handling services at the TIA. It informed that it may soon allow private firms to operate ground handling services during the night time. Currently, NAC that provides ground handling services to almost all international airlines currently earns Rs 2 billion a year of which 10 percent is paid to CAAN as royalty. CAAN says that many international airlines and customers have complained about NAC’s ground support service. The complaints are mainly two: thefts and tampering with passengers’ luggage and higher ground handling charges of NAC in comparison with other international airports in the region. It is hopeful that the introduction of a private firm will enhance quality and manage congestion at TIA. “The Civil Aviation Authority Act 1996 and National Civil Aviation Policy 2063 state that the ground handling service should be competitive. Besides, the agreement with the corporation also does not restrict CAAN from appointing a private firm to manage ground handling services,” says Suman. He adds, “Due to NAC’s monopoly, the ground handling charges in our country are the most expensive in this region.” <br />
	<br />
	<br />
	The addition of one more ground handling service provider is expected to bring in competition and end the monopoly thereby resulting in quality service at lower service charge, adds Suman. TIA currently has the capacity to serve 8.2 million passengers a year and can serve up to 1,350 international passengers on an hourly basis. “We have not been able to serve to our total potential due to organisational inefficiencies. The number of flights out of TIA is less than half the capacity that we can accommodate,” Suman says. Meanwhile, NAC officials deny the charges and claim that the incidents of baggage theft and breakdown are minimized to internationally acceptable level. They also allege that some of these complaints are actually due to the fault of CAAN and other government agencies involved in the business such as the immigration department. According to them, some problems are due to lack of adequate infrastructure such as insufficient apron space for parking the craft which are forced to wait in the taxiway for long periods. Besides, inadequate number of boarding gates cause delays in boarding and confuse passengers on the correct conveyer belts to deliver the luggage are frequently out of order while the luggage weighing machines are not repaired on time. Insufficient number of toilets and chairs in the passenger waiting area add to passenger woes further. <br />
	<br />
	<br />
	The NAC management says that it’s not only the ground handling services that are expensive in Kathmandu. It gives examples of the fuel price and the charges that CAAN levies on account of aircraft landing, parking and navigation. The charges for CUTE used for passenger check-in too are high in Nepal than elsewhere, argue NAC executives. They point that the ground handling services in many other countries such as Thailand, UAE, Qatar, Malaysia and Hong Kong are provided by their national flag carriers either on their own or through subsidiaries. In Thailand, even the flight catering service is provided by the party that is recommended by Thai Airways, they say. <br />
	<br />
	<strong><br />
	Trans-Himalaya 2 Airspace <br />
	</strong><br />
	<br />
	Considering the increased air traffic at the TIA, CAAN is planning to operate the international airport 24 hours a day. This is expected to help in managing the increasing air traffic. Besides, it is also seeking an alternative location nearby Kathmandu for shifting the domestic airport from TIA to address the congestion. Likewise, it is also going to extend the domestic terminal building and make a separate car parking area for arriving passengers. <br />
	<br />
	<br />
	Nepal plans to ask India for the development of Trans-Himalaya 2 airspace (Hong Kong-Kunming- Guwahati-Kathmandu) connecting Southeast Asia, the Middle East and Europe in view of the increasing air traffic demand in Nepal. The route is one of the most lucrative routes for Nepal and if opened, it will be the shortest way from China and the Far East to the Middle East and Europe. The air distance from Kathmandu to Hong Kong will also be reduced. Implementation of this airspace will allow international airlines to fly over Nepali airspace, which means savings in fuel and distance for carriers flying this route and revenue for Nepal. “The airspace was discussed during Prime Minister Baburam Bhattarai’s visit to Delhi,” says Suresh Acharya, Joint Secretary at the Ministry of Culture, Tourism and Civil Aviation (MoTCA). According to him, India is positive about opening the proposed route. He adds that separate discussions need to be held with the Chinese government with regard to permission from the Chinese side for the opening of Trans-Himalaya 2 airspace. The opening of this proposed air route will have hundreds of international airlines use Nepali airspace and help the country to develop as a hub. CAAN officials add that the proposed route would be the shortest and could establish Nepal as an international transit point and result in enhanced air revenue for the country. The second international airport that the government has planned to construct in Nijgadh of Bara would be the greatest beneficiary in the event this air route comes into operation. Similarly, for aircraft entering Nepal’s air space, CAAN proposes Biratnagar (in the eastern region), Bhairahawa (in the western region) and Nepalgunj (in the mid-western region) as the three crossborder airspaces. Currently, Nepal has three incoming air routes—Simara, Kakkarbhitta from Paro in Bhutan and the Nonim air route from China. The Kathmandu-Mahendranagar-Delhi (L626) is the outgoing air route for international flights. Nepal is seeking new airspaces to ease traffic congestion, enhance information transmission, traffic regulations, emergency recovery of aircraft during accidents and automatic message switching system in its aviation sector. <br />
	<br />
	<br />
	The proposed route is more direct, safer, economical and efficient for flights between Europe, the Middle East and East Asia. These routes will reduce the congestion of westbound traffic flows across the Bay of Bengal. Experts claim that access to this international air space would give Nepal a huge opportunity to develop as a hub like India, the Maldives, Pakistan and Sri Lanka in South Asia. Maximum coverage of Nepal’s air space on long distance international flights via this proposed route could bring great benefits to the country if brought into operation <br />
	<br />
	<strong><br />
	The Way Forward </strong><br />
	<br />
	<br />
	As per the estimates of the International Civil Aviation Organisation (ICAO), an investment of US$ 100 in the air transport industry produces benefits worth US$ 325 for the economy, and 100 additional jobs in the air transport sector results in 610 new jobs across the wider economy. It further suggests that the air transport component of civil aviation accounts for more than 4.5 percent of the global GDP. As for the numbers, three carriers – AirAsia X, Malaysia Airlines and BB Airways – start operations in 2012. AirAsia X has already started operations while Malaysia Airlines and BB Airways are planning to operate international flights from September this year. It’s courtesy the competition among airlines on Kathmandu-Kuala Lumpur route as these three carriers unveiled plans to operate on the sector. The growing movement of Nepali migrant workers to and from Malaysia is one of the reasons luring airlines to fly on this sector. Statistics released by the Department of Foreign Employment shows that an average of 350 Nepali workers left for the Malaysian capital on a daily basis in the last fiscal year. While Malaysia Airlines is the national carrier of Malaysia, AirAsia X is a Malaysia-based budget carrier. ASA between Nepal and Malaysia allows Malaysian carriers to operate up to 21 flights a week. On the other hand, BB Airways is an upcoming local carrier promoted by TBI Group of Non Resident Nepalis (NRNs) in Japan which has already unveiled plans to operate scheduled flights on seven international routes including Kuala Lumpur. <br />
	<br />
	<br />
	There is an unlimited potentiality of the development of tourism and civil aviation sectors in the country. A well-equipped fullfledged international airport – where long-haul flights from Europe and America could directly land and take off – is needed for the development of the aviation and tourism sectors. In this context, a proposed fullfledged airport at Nijgadh can be an international hub for air transit and contribute substantially to the overall economy of Nepal. Nepal Investment Board (NIB) has already taken the initiative on projects related to the upgradation of TIA, and construction of a new airport in Nijgadh. It is estimated that the TIA upgrade will cost Rs 52.80 billion while the construction of the new airport in Nijgadh will cost Rs 45 billion. <br />
	<br />
	<br />
	<br />
	<br />
	<br />
	<strong>‘Gulf Air Provides Excellent Connectivity to a Large Number of Nepali Workers’ <br />
	<br />
	<br />
	<br />
	<img alt="" src="http://www.abhiyan.com.np/images/uploaded/renji-kurian-th_1343383001.jpg" /><br />
	<br />
	RENJI KURIAN THOMAS </strong> <strong><br />
	Country Manager <br />
	Gulf Air <br />
	<br />
	</strong> <br />
	<br />
	<strong>Can you share the rate of increase in passengers flying to and from Nepal over the years? <br />
	</strong> <br />
	There has been a steady growth of passengers over the years. As one of the major international airlines operating in Kathmandu, we have seen nearly a 20 per cent increase in the number of passengers in the first quarter of the year 2012. The latest report of Tribhuvan International Airport (TIA) also has our airlines figuring among the top four international airlines that have seen the strongest growth in passengers’ movement. Having started our operation in July 1998, we are now operating 12 flights between Bahrain and Kathmandu weekly. <br />
	<br />
	<br />
	<strong>How do you assess the quality of air service infrastructure in Nepal? <br />
	</strong> <br />
	The quality of air service is very good as the airport takes care of landings and take-offs for as many as 27 international airlines. However, there is always a scope for improvement with the increase in tourism traffic in Nepal. The airport has been working to improve its facilities further as such. <br />
	<br />
	<br />
	<strong>How has been the demand on the number of flights over the years? How are you managing the supply to meet the demand? <br />
	</strong> <br />
	The demand on this route is increasing steadily. By increasing our frequencies as well as operating large aircrafts periodically, we manage to accommodate more passengers. Gulf Air provides excellent connectivity to a large number of Nepali workers in the gulf region, particularly Saudi Arabia. We operate larger aircrafts as per the situation, especially when the demand is high. <br />
	<br />
	<br />
	<strong>What are your unique selling propositions? How aggressively are you marketing them? <br />
	</strong> <br />
	We have got the biggest network in the gulf region and several USPs to our credit. One of them is our schedule with excellent connectivity, for example, our split schedule of flights between Bahrain and Kathmandu offers very good travel options as it allows travelers to choose their own flight timings. In addition, Gulf Air’s seamless connectivity to Europe and the Far East via the Bahrain hub is an ideal choice for European customers travelling to Nepal or the Far East. Moreover, we are currently operating one of the youngest fleet with an average age of 5.2 years. This A320 fleet which operates between Bahrain and Kathmandu, offers ergonomically designed seats for travelers with maximum comfort, full flatbed seats on Falcon Gold class and the latest in-flight entertainment. <br />
	<br />
	Internationally, we are the first airline in the world to offer ‘Sky Hub’ that offers hi-speed broadband internet, mobile phone connectivity, live TV telecast, popular entertainment programs, sports channels and an array of movies, music and games. In addition to that, Gulf Air’s unique Sky Nanny and Sky Chef Services have received positive feedback from the customers. These services have helped us win the best ‘family friendly airline’ from US-based publications and the ‘best cabin crew’ award ranking from an IATA survey. <br />
	<br />
	<br />
	<strong>Airlines flying to Nepal are said to have very few business class seats. Is it true that airlines do not see prospects for business class market here? <br />
	</strong> <br />
	The aircrafts that we fly to Kathmandu are the same as the ones that fly on our other routes. We use a combination of narrow and wide body aircraft for flights to Kathmandu, depending on the traffic. We agree that the potentiality of business class market is not high in Nepal when compared to other regions. However, we offer 16 Falcon Gold Business class seats on our A320 fleet which has a configuration of 136 seats in total. The gold business class has full flat seats and several modern features for those who prefer stylish and luxurious travel. <br />
	<br />
	<br />
	<strong> What are your expansion plans? <br />
	</strong> <br />
	We do continuously look at the number of the passengers and market demands and decide accordingly. As said earlier, we have increased our frequencies and are also periodically operating larger aircraft to meet the seasonal and expanding market. <br />
	<br />
	<br />
	<strong>Most of the flights made to Nepal are targeting migrant workers. How sustainable is this policy? <br />
	</strong> <br />
	As mentioned in the TIA report, increased labor traffic accounts for around 80 percent of seat demand in all international airlines. All international carriers connecting to Nepal saw a robust increase due to this reason. We cater both to migrant workers and tourists. However, the majority of our traffic to Kathmandu is the migrant workforce working in the gulf countries. We foresee this trend to continue for some time to come. <br />
	<br />
	<br />
	<strong>What are your operational difficulties and facilities in Nepal? <br />
	</strong> <br />
	There are no operational difficulties except the weather of course. As you know, we are sometimes forced to divert our flights to nearby Indian airports due to unfavorable weather conditions such as dense, fog etc especially during winter. However, with our split schedule flights, we have better timings for landing in Kathmandu. <br />
	<br />
	<br />
	<strong>How are you managing your ground handling staff and crew members? <br />
	</strong> <br />
	We have Nepali speaking cabin crew in our team, who are deployed on the Kathmandu route most of the time so that our Nepali customers could feel at home. Almost all our staffs at the airport and city office are Nepalis. <br />
	<br />
	<br />
	<strong>How do you see the prospects of Nepal’s tourism sector? How is your airline contributing to it? <br />
	</strong> <br />
	Tourism is one of the main industries in Nepal. The Nepal Tourism Year 2011 was quite successful. Through International air passenger movement, Nepal grew 13.35 percent in the first three months of 2012 with high migrant workers and tourist traffic. Kathmandu is one of the major tourist destinations with thousands of foreigners visiting the country for a variety of reasons. <br />
	<br />
	The tourism sector is bound to expand as more and more people opt for unique and affordable destinations such as Nepal. We are able to connect more passengers than others to travel to Kathmandu via our Bahrain hub. The tourism campaigns or promotions by Nepali tourism authorities in the gulf countries can further help an increment in the tourist traffic to Nepal. I am proud to say that Gulf Air too has a role to play in the tourism development of Nepal as we cater to a large number of European tourists who find it convenient to fly with us. <br />
	<br />
	<br />
	<br />
	<strong>‘An International Airport at Nijgadh can help Establish Nepal as a Transit Hub’ <br />
	<br />
	<br />
	<br />
	<img alt="" src="http://www.abhiyan.com.np/images/uploaded/tri-ratna-manan_1343383130.jpg" /><br />
	<br />
	TRI RATNA MANANDHAR </strong> <strong><br />
	Director General <br />
	Civil Aviation Authority of Nepal (CAAN) <br />
	</strong> <br />
	<br />
	<strong><br />
	What is the current scenario of International flights operating in Nepal? </strong><br />
	<br />
	Earlier, we had altogether 28 operators conducting international flights. Among them, three operators namely GMG Airlines, Kingfisher Airlines and Bahrain Air postponed their flights. Simultaneously, three other operators namely BB Airways – a Nepali airliner – along with two airliners from Malaysia, Air Asia X and Malaysian national carrier Malaysia Airlines were included. Air Asia X is operating from July 3 while BB Airlines is to commence from September this year. That is to say, some airlines are withdrawing their flights while some others are commencing their operations soon. However, the numbers of operators are back to 28 as it was before. There are 33 other airlines waiting in the wings with their air service agreements (ASAs). <br />
	<br />
	<br />
	<strong>The infrastructure bottleneck is often the constraint to provide international standards services to the airlines flying to Kathmandu. What exactly is the situation? <br />
	</strong> <br />
	We must accept this fact. We are not being able to develop the infrastructure as per the growth of air traffic movements. That is why we are very often facing air traffic congestion at TIA. To address such problems, we are conducting various measures. First of all, a TIA Capacity Enhancement Project is going on with support from an ADB loan of US$ 70 million. CAAN itself is investing another US$ 30 million in the project. This US$ 100 million project will address the extension, expansion, and development of TIA which includes the civil infrastructures such as runway and taxiway extension, construction of additional parking bay etc. The development of equipment is another component that is also in our priority. These components are ATC automation and communication and navigation equipment. These tasks are part of the capacity enhancement project. We are also planning to separate domestic operators and shift them somewhere close to Kathmandu. Dhulikhel seems to be a possible location and a detailed feasibility study is being conducted for that purpose. We are looking at this alternative so that we can use the present TIA only for International operation. <br />
	<br />
	<br />
	<strong>How is CAAN addressing air traffic issues like landing and take-off, flow of flights and routes etc? <br />
	</strong> <br />
	We have some problems in the international air route and we are inviting Indian authorities to Nepal to hold discussions on this very soon. <br />
	<br />
	<br />
	<strong>How improved has the passenger handling capacity of TIA become in the recent years? <br />
	</strong> <br />
	We are continuously trying to improve our services. But I can’t say that the improvements are significant because of the limited facilities. Even the space is the same as we have been using before. Upon the completion of the ADB project, we would be able to enhance the passenger handling capacity and provide other facilities accordingly. <br />
	<br />
	<br />
	<strong>What happened to the plan of making TIA operational for 24-hours-a-day? <br />
	</strong> <br />
	We are continuously exercising to operate that way. But there are certain things to be considered like manpower planning, reliability of the radar etc which are essential in making TIA operate for 24-hours-a-day. Besides CAAN, the immigration authorities and the security establishments also need to be prepared for it. <br />
	<br />
	<br />
	<strong>What is the overall air service infrastructure situation of Nepal? <br />
	</strong> <br />
	In terms of airports and airport facilities, we (the Ministry of Culture, Tourism and Civil Aviation and CAAN) are aggressively involved in improving and increasing airport infrastructure. The project for constructing Gautam Buddha Regional International Airport at Bhairahawa is in the pipeline. The revised estimated cost for the project is US$ 77 million. Another project for a regional international airport in Pokhara is also proceeding for which China Exim bank has shown an interest to invest in. <br />
	<br />
	<br />
	<strong>How many of our airports are capable of handling international flights in terms of runways and other infrastructures in Nepal? <br />
	</strong> <br />
	Airports in Bhairahawa, Nepalgunj and Pokhara are capable for conducting cross border flights with India. They can operate in Indian cities like Lucknow, Varanasi, Delhi and Patna. As for fullfledged international operations, we only have TIA to look up to. <br />
	<br />
	<br />
	<strong>Experts say that lack of direct international flights from major tourist destinations have resulted in great loss for our tourism sector. What is CAAN doing about it? <br />
	</strong> <br />
	The entire aviation sector understands the value of direct international flights. The scenario of constructing Nijgadh International Airport has emerged due to this need. It’s been so many years that we are talking about constructing it but there is no achievement on this front so far. If the nation really wants to promote the tourism sector on a massive scale, a full-fledged international airport is a must as the present international airport (TIA) is not a full-fledged one. It has many constraints because of the terrain, runways and lack of other infrastructures. That is why it is not possible to operate long haul flights from the US and Europe. Landing a big aircraft is another impossibility given the present circumstances. If the tourists from countries in Europe and the US could travel directly to Nepal, it would have been convenient to us as well as the tourists. For instance, it takes a minimum of two stops and one has to spend more than 24 hours to travel from Europe to Kathmandu. All the pleasure and excitement is gone because the tourists feel exhausted and tired due to long flights. The travellers have to spend more hours in transit than on board the flights. <br />
	<br />
	We are unaware of the exact tourism potentiality of Nepal. The President of International Civil Aviation Organization (ICAO) visited Nepal recently. He was shocked to hear that we were able to bring only about 700,000 tourists against our target to bring in one million tourists during Nepal Tourism Year 2011. <br />
	<br />
	We will not be able to develop our tourism sector as desired if we depend entirely on TIA only. By constructing a full-fledged international airport at Nijgadh will not only enable us to operate long haul international flights but also help establish Nepal as a transit hub like Hong Kong and Bangkok. <br />
	<strong><br />
	<br />
	What do you have to say about the fifth freedom rights of international airliners operating in Nepal? </strong> <strong><br />
	</strong> <br />
	We assure such rights in the Air Service Agreement (ASA) with international operators. The recent controversy with Air Arabia on the fifth freedom rights is meaningless. As per the provision of an ASA between Nepal and UAE, it is their right to seek so. If the international operators do not get their fifth freedom rights, they cannot run their businesses. We can’t even imagine building the Nijgadh Airport leaving aside such rights. Fifth freedom rights will help develop Nepal establish itself as a transit hub. But these controversies are hardly true for some other international airlines. More than 90 per cent international airlines are enjoying fifth freedom rights, for instance, Druk air is operating a flight between Kathmandu and Bhutan via Delhi. <br />
	<br />
	<br />
	<strong>‘Dragonair is Bringing a lot of People into Nepal’ <br />
	<br />
	<br />
	<br />
	<img alt="" src="http://www.abhiyan.com.np/images/uploaded/thomas-bellamy_1343383224.jpg" /><br />
	<br />
	THOMAS BELLAMY </strong> <strong><br />
	Manager - Nepal <br />
	Hong Kong Dragon Airlines Ltd <br />
	</strong> <br />
	<br />
	<strong><br />
	Can you share the rate of increase in passengers flying to and from Nepal over the years? <br />
	<br />
	</strong> Dragon air started its operation in Nepal in 1989. The service was halted in 2001 and re-launched in 2007. We have gradually increased our frequency and now have daily flights. We have increased the aircraft size with the increase in passenger numbers. We are taking more passengers to China, Japan, Australia and the US. These are the big destinations for us. Dragonair is also bringing a lot of people into the country especially during the peak tourist season from September to April. <br />
	<br />
	<br />
	<strong>How do you assess the quality of air service infrastructure in Nepal? <br />
	</strong> <br />
	There have been some good changes at the TIA recently – for example, the new check-in desks and screens that have been installed at the international terminal. We hope for more improvements to be made in the future. It is very important to have a very strong main airport here in Kathmandu to act as a hub for inbound Nepali tourism. <br />
	<br />
	<br />
	<strong>What is the demand on the number of flights over the years? How is Dragon Air managing the supply to meet the demand? <br />
	</strong> <br />
	We have the capacity to meet the growing demands. There is enough demand to utilise the capacity and thus, we increased the frequency to a daily flight in September 2011. We are quite optimistic about Nepal and will continue to monitor such situations. From the tourism perspective, a lot depends on the stability of things here in Nepal. If Nepal can get good coverage in other countries, the travel agents and airlines will be more willing to promote Nepal and the number of passengers will increase as well. <br />
	<br />
	<br />
	<strong>How cooperative have the Nepali government institutions been in helping meet the market demands? <br />
	</strong> <br />
	I think the intentions are good. There are obviously a few constraints in Nepal, but many of these will fall off in a more stable environment. For now, we just need to continue working together to improve wherever we can and to focus on the positives. The Airlines Operating Committee which comprises airport representatives from most of the major carriers in Nepal continues to work with the relevant authorities to look for improvements wherever possible. <br />
	<br />
	<br />
	<strong>What are your unique selling points? How aggressively are you marketing them? <br />
	</strong> <br />
	One of the unique selling points of Dragonair is having Hong Kong as its hub. We have fantastic connections, and together with our sister airline Cathay Pacific, we are capable of connecting passengers to over 160 destinations worldwide. In Hong Kong, the minimum connecting time with Cathay Pacific has been reduced to 50 minutes which gives passengers more choice and convenience. There are many destinations from Hong Kong within a relatively short distance – half of the world’s population within five hours. On the long-haul side of things, we connect to New York four-times-daily. We look at the possible frequency rather than relying solely on our capacity. We want to give passengers more choice, which means provide more departure time wherever sustainable. <br />
	<br />
	Dragonair’s world-class service and quality products have long been recognised – we’ve won the Best Airline – China category for six consecutive years in the respected Skytrax passenger survey and we were also voted the “World’s Best Regional Airline” in 2010 and 2011. Dragonair’s major strength is China. We fly to 19 destinations in mainland China and operate about 400 flights a week. Adding to it, our sound safety record, well-trained and professional staff, and good on-time performance are the positive sides to focus on. <br />
	<br />
	<br />
	<strong>Airlines flying to Nepal are said to have very few business class seats. Is it true that airlines do not see prospects for business class market here? <br />
	</strong> <br />
	Asia has shown its ongoing potential and resilience in the face of the current global economic downturn. Until now, Nepal has widely been regarded as a leisure travel destination. We are optimistic that, with stability, business and industry here can grow and along with it, the demand for business travel will rise. We actually have a decent number of business class seats on our Airbus A330 aircraft, but it would of course be nice if passengers originating from Kathmandu could fill more of those seats. <br />
	<br />
	<br />
	<strong>What are your operational difficulties and privileges received in Nepal? <br />
	</strong> <br />
	The weather is always a challenge for airline operations and it is no exception here in Nepal. We have worked with the authorities and our own engineering teams to overcome the constraints we face here, so as to ensure timely operation as much as possible. This is particularly important in the context of the airport operating hours (the airport closes after midnight). The ever increasing number of tourists would definitely benefit from further improvements at the airport, and we will continue to support positive initiatives from the authorities in that direction. <br />
	<br />
	<br />
	<strong>It is said that operating in Nepal is very cheap despite having poor infrastructure. What are its advantages? <br />
	</strong> <br />
	While operational cost is one of the many factors, we look at running our business anywhere. We see Nepal more for its market potential i.e. its attractiveness as a destination and travel demand to other countries like US, Australia, Japan, Korea and of course Hong Kong and China. <br />
	<br />
	<br />
	<strong>What are your expansion plans? <br />
	</strong> <br />
	We continue to look forward to opportunities in Nepal and act accordingly in terms of available possibilities. We will increase frequency if we continue to see good growth in passenger numbers at sustainable yields. Basically, we will react to the situation, and we’re optimistic that the outlook for Nepal is bright. <br />
	<br />
	On a larger scale, Dragonair is adding six aircraft: four Airbus A320s and two Airbus A330s to the fleet this year - expanding the size of the Dragonair fleet from 32 to 38. Two additional A320s and one A330 have already entered the fleet this May. In terms of Dragonair’s network this year, we launched flights to Jeju on 01 May (three flights per week), to Chiang Mai on 01 July (four flights per week) and to Kolkata, India in winter 2012 (four flights per week). Flights were also resumed to Taichung on 14 May (twice daily), to Guilin on 01 May (daily), and Xian on 01 Apr (daily). <br />
	<br />
	<br />
	<strong>‘Thai Airways was the First Airline to Operate Jet Service to Nepal’ <br />
	<br />
	<br />
	<br />
	<img alt="" src="http://www.abhiyan.com.np/images/uploaded/chantouch-srini_1343383315.jpg" /><br />
	<br />
	CHANTOUCH SRINILTA </strong> <strong><br />
	General Manager <br />
	Nepal &amp; Bhutan <br />
	Thai Airways International Public <br />
	Company Limited <br />
	</strong> <br />
	<br />
	<br />
	<strong>You are going to complete 44 years of operation in Nepal. How has been the journey so far? <br />
	</strong> <br />
	The history of Thai Airways International in Nepal dates back to 1968 when the inhabitants of Kathmandu had their first glimpse of THAI’s 72-seater French built Caravelle SE210 aircraft which touched the unfamiliar runway of Tribhuvan International Airport (TIA). We are going to complete 44 years of our operation in Nepal this year. <br />
	<br />
	THAI was the first-ever airline to operate jet service from Kathmandu and the airline that opened up the forbidden Himalayan Kingdom as a new tourist destination to the world. It was a spectacular and memorable event in the Nepali Aviation history. <br />
	<br />
	THAI also introduced the first computerized reservation system in Kathmandu in February 1985 and provided this facility to its leading travel agents since 1990. Royal Orchid Lounge at the TIA used to be the only lounge operated by THAI in the 1990s. However, after Nepal Government adopted liberal sky policy, many other international airlines joined the race. Our monopoly market share has been diluted a little bit but we are enjoying the competition. It has given us the opportunity to prove ourselves as the first choice carrier in terms of our fleet size and service standards. <br />
	<br />
	<br />
	<strong>What is the demand status on the number of flights over the years? How are you managing the supply to meet the demand? <br />
	</strong> <br />
	Being a pioneer and well renowned carrier, THAI always had the strategy to adjust the number of flights as per market demand. In the beginning, we operated once a week flight between Bangkok and Kathmandu and soon after that, one more flight was added to cope with the high demand of passengers. THAI started daily flights with A300-600 aircraft since the end of October 1997. In the context of growing demand of air seats to/from Nepal, we added three more flights in 2008. Based on the request of different tourism related associations like NATTA, PATA, HAN and NTB, we began to run 10 flights per week. Now we have seven flights a week with a configuration of 30 business class and 279 economy class seats. <br />
	<br />
	<strong><br />
	Thailand has been one of the most popular destinations for outbound tourism for the Nepalis. What is Thai Airways’ contribution to it? <br />
	</strong> <br />
	Thai Airways has played a leading role in the development of tourism not only in Thailand but also in helping Nepal in worldwide promotion as a major tourist destination through various media like our in-flight magazine “Sawadee” and Royal Orchid Holiday Packages tours. Besides performance, punctuality, and silk class services to our valued customers, we have joined hands with the Tourism Authority of Thailand by frequently organizing different events like Trade Fairs, Educational/ Medical fairs, familiarization trips for agents and media, Thai Food festivals, Thai Puppet shows etc. We also offer attractive packages and special fares for students and leisure travelers. <br />
	<br />
	<br />
	<strong>How has Thai Airways been promoting Nepal at the international level? <br />
	</strong> <br />
	Thai Airways was the first airline to operate jet service to Nepal and introduce this country to the world. These days, many airlines are inspired to operate their services in this country due to our successful operation for the past 44 years. THAI had actively participated in “Visit Nepal Year 1997” and spread good word all over to promote “Nepal Tourism Year 2011” as well. We joined hands with the organizers of Asian Mountain Bike championship in 2008 by offering special fares to the participants all around the world. In addition, we organized a big puja same year to introduce Lumbini to the pilgrims from all around the world. This year, we are going to sponsor the famous Nepali musical group “Sur Sudha” to perform in Thailand. <br />
	<br />
	<br />
	<strong>How cooperative are the Nepali Government institutions in helping meet the demands from this market? <br />
	</strong> <br />
	Thai Airways has been getting a very constructive support from the government bodies in Nepal. This is one of the reasons behind our uninterrupted service for the past 44 years. We have always been able to bring into operation the required number of flights connecting Kathmandu and Bangkok as per our market demand. This cooperation is good for both the countries in terms of tourism, economy, education and other sectors. We are thankful to the Nepal Government, NAC, CAAN, TIA, ATC, NTB, NATTA and PATA for the continued support extended towards THAI. <br />
	<br />
	<br />
	<strong>Most of the flights made to Nepal are targeting migrant workers. How sustainable is this policy? <br />
	</strong> <br />
	Labor traffic does not occupy a major business of our flight operations, it is only a partial business of our total occupancy. Since the very beginning, we have had different segments of traffic like the royalties, frequent flyers, government officials, diplomats, expats, students and the tourists. Labor traffic is also part of our business but as I said we don’t depend heavily on it. <br />
	<br />
	<br />
	<strong>What are the operational difficulties and facilities in Nepal? <br />
	</strong> <br />
	Lack of proper infrastructure, unstable government, political instability and unhealthy competition among budget airlines are the drawbacks hindering smooth operation of the renowned carriers such as THAI. <br />
	<br />
	<br />
	<strong>Operating in Nepal is said to be cheap. What is your experience? <br />
	</strong> <br />
	We do not think operating in Nepal is cheap. On the contrary, it is one of the most expensive in terms of ground handling, parking and landing, ground space, rental, ramp, fuel and all kind of other charges. <br />
	<br />
	<br />
	<strong> How are you managing your ground handling staff and crew members? <br />
	</strong> <br />
	THAI has its own handling service in Nepal. It has never compromised in quality services; therefore, we have our own operational, ground handling and administrative staff directly under the THAI set up of course. <br />
	<br />
	<br />
	<br />
	<br />
	<br />
	<strong><br />
	</strong></p>
<p>
	<strong>GSAs that Fuel the Business <br />
	<br />
	<br />
	By Gaurav Aryal </strong><br />
	<br />
	<br />
	Around 85 per cent of international airlines operating in Nepal have made their presence felt through a number of GSAs <br />
	<br />
	<br />
	International airline companies operating in Nepal prefer having a presence through their General Sales Agents (GSA) rather than having their local office stationed in the country. Around 85 per cent of international airlines operating in Nepal have made their presence felt through GSAs. Out of the 28 international airlines currently in operation, only four of them, namely Thai Airways, Air India, Qatar Airways and Etihad Airways have their country offices in Nepal. A source at a leading travel agency under the condition of anonymity said “It’s not only offline but also the online airlines that are operating through their GSAs in Nepal.” <br />
	<br />
	<br />
	Sunil Sharma, Managing Director at Society Travel Service Pvt Ltd said that offline GSAs could be of any number as travel agents have Special Prorate Agreement (SPA) with offline airlines on a code sharing basis. He said that such offline airlines carry transit passengers flying from Nepal to various sectors and destinations around the world. Sharma, who is also a GSA of RAK Airways said, “It would be a major headache for airline companies to have their office setup here and run after various things ranging from policies to issues regarding aviation fuel. The airlines feel it would be a waste of time as the documentation procedure here is difficult along with the bureaucratic hassles. GSAs have the knowhow about local issues and it would be easier for the airlines to operate through GSAs who are handed over with specific duties and responsibilities.” <br />
	<br />
	<br />
	Similarly, it is believed that the GSAs have a greater knowledge on the local market as they are the local partners that have been in existence for a long time. “GSAs bear expenses, mobilise local staff, have detailed information about the local market, and having a GSA is cost effective than having an airline office established here. So, the international airlines prefer having GSAs rather than setting up their local offices of their own,” said the source. GSAs, usually the agent for sales of air tickets, are also the partner for marketing the airlines they represent. The source said that airlines and agents in Nepal jointly carry out marketing campaigns for the airlines. According to the source, the travel agencies are lured to work as GSAs because they receive override commissions along with additional commissions and other benefits like travel certificates, and staff trainings among others. Sharma also said that GSAs work on override commission and set up office, hire staff required at the corporate office and even at the airport. However, ground handling is not allowed to be performed by GSAs as it is taken care of by Nepal Airlines Corporation for every airline other than Thai Airways and Air India. “The majority of the clientele of GSAs are anybody going abroad, be it tourists, migrant workers, students, business persons, visitors, expatriates and everybody else who is travelling,” said a source at a leading travel agency. The source added that the ratio of Nepalis to foreigner passengers is 75:25 per cent. Sharma said that the companies that work as GSAs for passenger segment are also the Cargo Sales Agents (CSA) with the respective airlines. Sources said that GSAs have been operating in Nepal for over three decades now. <br />
	<br />
	<br />
	However, sources said that it is difficult to exactly pin point the size of the GSA market and their respective market share because everything depends on the demand and supply of flights. They added that the demand and supply keeps on varying constantly. <br />
	<br />
	<br />
	The number of international air passengers flying to and from Nepal has increased over the years and so has the number of flights. In the first three months of this year, 717,182 international air passengers travelled via Nepal. According to the data of Nepal Tourism Board, 207,961 tourists arrived in Nepal via air route from January to April 2012. It is a 23.1 per cent increment from 168,958 tourist arrival during the same period of 2011. The major reason behind the increment in air passengers is the increase in tourist inflow and migrant workers going abroad in search of job opportunities, according to Ratish Chandra Lal Suman, General Manager at Tribhuvan International Airport. President Tours and Travels (PTT) represents around half-a-dozen airlines as their GSA. Gulf Air, Qantas Airways, Kenya Airways, United Airlines, Air Mauritius, Indigo Air are some of the airlines that it represents but PTT is the passenger sales agent for United Airlines and Indigo Air. Similarly, Zenith Travels Pvt Ltd, another travel agency represents Bahrain Air, Sri Lankan Airlines, Spice Jet, Turkish Airlines and Qatar Airways Cargo as their GSA. <br />
	<br />
	<br />
	<strong>New Airlines in Nepali Sky <br />
	<br />
	<br />
	By Dipa Baral <br />
	</strong><br />
	<br />
	AirAsia X has already started operations while Malaysia Airlines and BB Airways are planning to operate international flights from September this year <br />
	<br />
	<br />
	Nepal is on the way to become an international air hub, thanks to the rise in the number of tourists and labour traffic in the past few years. AirAsia X, the budget carrier of AirAsia, has already started operations from July 4 this year while Malaysian national carrier Malaysia Airlines and Kathmandu based BB Airways are planning to operate international flights from coming September. Besides, some prominent countries have shown interest to sign Air Service Agreements (ASAs) or to review the past ASAs with Nepal. AirAsia X has started scheduled flights between Malaysian capital Kuala Lumpur and Kathmandu two times a week i.e. Tuesdays and Thursdays and has plans to add two more flights from September this year. The airline has priced its ticket at Rs 11,000 (exclusive of taxes) for one way trip. “The ASA between Nepal and Malaysia allows Malaysian airliners to operate 21 flights a week. But, AirAsia X has taken the permission to operate seven flights a week at the most,” said Suresh Acharya, Head of Air Services Agreement, Airlines and Airport Operation Division at the Ministry of Culture, Tourism and Civil Aviation (MoTCA). <br />
	<br />
	<br />
	BB Airways, promoted by TBI Group of Non Resident Nepalis (NRNs) in Japan, will also operate flights from September 13 this year. The company has already brought a Boeing 757-200 (ER) on wet lease that will operate nine flights a week to Doha and Malaysia. “We will bring another aircraft of the same category after a month of our formal operation and operate 17 flights a week,” said Shishir Bhatta, CEO of BB Airways. The company will also add Singapore and Bangkok to its destinations after getting another aircraft on lease. <br />
	<br />
	<br />
	BB Airways had acquired a license for international operations from the MoTCA in the first week of January 2012. “We are aiming to promote Nepali identity all over the world through our international air service and aspire to place Nepal in the global travelling map,” said Bhatta. The airways has not made public its flight rates yet but informed that the ticket booking will be available both online and via travel agencies. <br />
	<br />
	<br />
	The third airline in the pipeline to commence international air service in Nepal is Malaysia Airlines, the national flag carrier of Malaysia. “It’s been more than a year since Malaysia Airlines obtained operating license from the ministry. It has plans to start flights from coming September,” said Acharya. The airline has a permission to operate seven flights a week between Nepal and Malaysia. Similarly, four countries— Vietnam, America, Australia and Indonesia—have shown interest to sign ASAs with Nepal while United Kingdom (UK), Jordan, Pakistan, Bhutan and United Arab Emirates (UAE) want to review their past ASAs. “We have not been able to translate the talk into action because of Nepal’s vague stance on fifth freedom. When the world is practicing freedom right up to the ninth, we are still arguing over granting fifth freedom right,” said Acharya. In December 2010, the government had to bar Air Arabia from exercising its fifth freedom right to fly on the Kathmandu- Kuala Lumpur sector at the eleventh hour following pressure from Nepal Airlines Corporation (NAC). The national flag carrier had claimed that the decision will make serious impact on its business. The case is now pending in the Supreme Court. “Rather than restricting the government from signing deals with international airlines, it must concentrate on its own capacity building and adopt aggressive marketing strategy,” said Acharya. He underscored the need of networking, partnership and alliance with other airlines to sustain in the present world. However, if NAC had believed that Air Arabia’s fifth freedom right would jeopardise its existence, it is yet to see what impact the entry of these three new airlines will make. “Once the new airlines commence operation, the competition will become even tougher because they will certainly end NAC’s monopoly in catering to the labour traffic. But, we cannot hold the market for NAC as the country has been practicing liberal sky policy. It is high time that NAC improved its services and got ready for competition,” said Acharya. <br />
	<br />
	<br />
	The MoTCA has also issued a 45-day public notice on May 25 inviting domestic operators to apply for international operation. The notice has invited applications for a chartered and a cargo flight each. Companies having paid-up capital of Rs 500 million and security bond of Rs 5 million can apply for the license by paying Rs 50,000 to the ministry and avail the document of Terms of Reference (ToR). The companies should also pay Rs 50,000 per route as royalty. <br />
	<br />
	<br />
	“So far, Siddartha International Airlines has applied to operate a chartered flight. But we hope to get some more applications as there is still enough time to apply,” said a high level official at the MoTCA. <br />
	<br />
	<br />
	<strong>Five Airlines: One Destination <br />
	<br />
	<br />
	By Sushila Budhathoki </strong><br />
	<br />
	<br />
	Nepal experienced the formal beginning of aviation in 1949 when a lone 4-seater Indian Beechcraft Bonanza aircraft arrived in Kathmandu <br />
	<br />
	<br />
	With 27 per cent arrivals and 14 per cent departures out of the total passenger movement in the year 2011, the airline companies originating from India contribute a large chunk of the international passenger movement in Nepal via its flights to Kathmandu. According to the TIA passenger manifest, the airlines from India registered passenger arrival numbering 354,738 out of the total of 1,292,515 passengers that landed in Nepal and 377,867 departures out of the total 1,407,512 departing passengers. Nepal experienced the formal beginning of aviation in 1949 when a lone, 4-seater Indian Beechcraft Bonanza aircraft arrived in Kathmandu. And after a decade, Himalayan Aviation Dakota had the first charter flight between Calcutta (now Kolkata) and Kathmandu. Airlines from India came into business operation from 1953. More than half-a-century of existence in the Nepali sky, Indian airliners still prove to be among the leading carriers that bring substantial number of passengers to Nepal. Ranjan Pokhrel, Head of the International Relations Department at CAAN, says, “If we look into the history of Nepali aviation, we find that the Indian airliners have made a significant contribution to Nepal’s aviation development.” He adds, “Indian airliners are important not only for the aviation sector but also to the economic, social and cultural aspects of Nepal. They are contributing towards providing transport facilities, bringing Indian tourists and strengthening the high level political relationship between Nepal and India from the beginning.” Currently, there are five Indian carriers - Air India, Jet Airways, Jet Lite, Indigo Airlines and Spice Jet - operating between Nepal and India. Kingfisher Airlines, once a major operator on the Kathmandu-Delhi route, has postponed its many international flights including the Kathmandu sector. Air India now operates 32 flights in a week which includes a daily flight between Kathmandu and Delhi and 4 flights a week on the Kathmandu-Kolkata and Kathmandu-Banaras routes. Similar is the story of another Indian carrier Jet Airways which operates a daily flight each on the Delhi-Kathmandu and Mumbai-Kathmandu sectors. Jet Lite, Spice Jet and Indigo have one flight each on the Delhi-Kathmandu route on a daily basis. <br />
	<br />
	<br />
	Nepal Airlines Corporation (NAC), the only Nepali airlines which pioneered flights to Indian cities has now postponed its flights since November 2011. It used to fly to Patna, Calcutta, Mumbai and Bangalore earlier. In the last two decades, NAC has not added any new aircraft. Pradip Karki, Director of Traffic Management at NAC, however, assures that flights to Indian destinations will resume soon. He says NAC must resume flights to India with a new fleet and the government should support the idea. He adds, “We have discussed and signed an MoU with the aircraft manufacturing company to either buy or lease aircraft. There may be Airbus A320 - a 150 seater or A330 - a 250 seater that will operate flights to India in the future.” Most Indian carriers are said to be low cost carriers (LCCs) when compared to other airlines. The fare for the economic class seats starts at Rs 6,300 while business class seats cost a maximum of Rs 34,000 on the Kathmandu-Delhi route. Many other international airlines have started to fly in the same route and the competition has grown stronger. TK Saha, the Country Manager at Air India says that his team is happy with the sector. “In spite of severe competition by other international airlines as well as Indian competitors, we are maintaining and operating our flights with an average of 74 per cent occupancy,” he adds. <br />
	<br />
	<br />
	Nepali and Indian aviation authorities reviewed the Air Service Agreement (ASA) in 2009 to permit Nepali airline companies to fly 24 destinations in India. As per the reviewed ASA, airlines from Nepal can incre',
			'published' => true,
			'created' => '2012-08-10',
			'modified' => '2012-08-22',
			'keywords' => '',
			'description' => 'The flow of international passengers in the first quarter of 2012 has been impressive enough to raise optimism among the concerned stakeholders. The statistics between January and March 2012 is an indication that international air service and passenger movement to and from Nepal is set to register a significant increase this year compared to 2011.',
			'sortorder' => '550',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 13 => array(
		'Article' => array(
			'id' => '642',
			'article_category_id' => '40',
			'title' => 'Infrastucture :The Basis To Development',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	<img align="left" alt="cover story" border="1" height="431" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/infra.jpg" style="margin:10px; padding:10px;" vspace="10" width="390" />The state of infrastructure in Nepal is far from promising at present, observe experts. While the government is primarily responsible for developing infrastructure in the country, it has more or less failed to live up to expectations largely due to its incapability of making use of available resources and money power. The governmentâ€™s inability to use the management acumen of the private sector has made matters worse. In recent times, the private sector has made its presence felt in developing infrastructure at its own level, especially in the communication and hydropower sectors.</p>
<p>
	According to the world global competitiveness report, in 2009/10, Nepal was placed in 131st position out of 133 countries in the quality of infrastructure. In 2010/11, Nepalâ€™s position further declined to 139th position, the lowest in the fray. This shows a severe need of quality infrastructure and upgrade of the existing ones in the country.</p>
<p>
	However, figures for basic infrastructure in other sectors are miserable, to say the least. At present, 890 people use one kilometre of road while 87 per cent of energy demand is still met through traditional sources. The government has prioritised infrastructure development from the beginning of planned development in 1956. Nepal spends around 60 to 70 per cent of around Rs 11 billion GDP annually, for infrastructure.</p>
<p>
	<strong>Private Sector Participation</strong></p>
<p>
	Private sector participation in development of physical infrastructures was formally realised only with the promulgation of act that facilitated private sector investment in 2006. From 1990 to 2007, the private sector invested US$ 404 million in just eight projects of low income category according to World Bank statistics. Out of these, five were in energy and three in telecom sector. The government realising the importance of the private sector involvement in developing infrastructure projects has adopted models like BOT (Build-Operate- Transfer), BOOT (Build-Own-Operate- Transfer), Design-Build-Operate (DBO), Design-Build-Maintain (DBM) etc. These models are in use for foreign partnerships mostly in hydropower projects.</p>
<p>
	 </p>
<p>
	 </p>
<p>
	 </p>
<p>
	<img align="middle" alt="cover story" border="1" height="125" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/cove5.jpg" vspace="5" width="200" /></p>
<p>
	<strong>Public-Private Partnership</strong></p>
<p>
	While the government suffers from capital crunch, the private sector has a profit maximising motive on top of its agenda. Therefore, a model of public-private partnership (PPP) seems to be a viable proposition for infrastructure development purpose. Purusottam Man Shrestha, National Project Manager of Public-Private Partnership for Urban Environment (PPPUE) observes that PPP model remedies the weaknesses of developing projects independently by the private sector or government. He adds, â€œIn the course of maximising profit, the private sector may disregard the interest of general public where the profit tends to get low.</p>
<p>
	Similarly, public sector is not seen as efficiently handling the projects and managing them, which can be best done by the private sector. The model of PPP can create a win-win situation for both the private and public sector partners.â€ With this model of development, possible losses can be minimised with the government backing while revenue collection can be best utilised with prudent management skills. In Nepal, few projects in sectors like drinking water, waste management, urban sanitation, solar street lights, bio-gas, urban transportation management like parking space, bus terminal management etc are under consideration, according to Shrestha. All these are projects are at a micro level, mostly developed in coordination with local government-like municipalities.</p>
<p>
	Large projects under PPP model like Kathmandu-Terai Fast Track, West-Seti A 750 MW project etc have been much discussed but are yet to see the daylight. Shrestha believes projects of small nature can be most suitable at the moment considering the financing capacity of the private sector. Solid waste management, drinking water, health related waste management, transmission line are taken as the best projects under this model.</p>
<p>
	Health and education are two other sectors that are considered appropriate for this model. R B Rauniar, the Managing Director of Interstate Multi-Modal Transport Pvt Ltd opines PPP is the best model of infrastructure development where there is a possibility of generating revenue as well as the development of basic infrastructure. He further says the frequent changes in policy and lack of national commitment on the political parties and leaders in the government has become the largest barrier for this model to be successful. Experts believe Nepal is yet to make preparations and work out so that this model will be the method of developing required infrastructures for the country.</p>
<p>
	<strong>Physical Infrastructures <br />
	</strong></p>
<p>
	Whether the private sector will invest or not in the development industry is dependent on the suitable investment climate and market for a particular infrastructure. The private sector can invest and develop in physical infrastructure like roads where there are alternatives. Alternative and fast track roads, bridges carry potential for private sector where they collect toll from the users. But private sector road developments like toll roads need huge investment which is difficult to manage by the business community alone.</p>
<p>
	In hydropower and communication sector, there has been encouraging private sector participation. Small and midsized hydropower projects are being developed by this community. In the communication sector, there are large players like Ncell, UTL, and new comers like Smart Telecom and Hello Nepal making their strong presence. Mega projects like the new international airport at Nijgadh in Bara, Kathmandu-Terai expressways and railway lines, mega hydro projects etc are not less viable. The proposed new international airport at Nijgadh could be one of the promising projects.</p>
<p>
	<strong><img align="left" alt="cover story" border="1" height="200" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/serv.jpg" style="margin:10px; padding:10px;" vspace="10" width="300" />Service Infrastructures <br />
	</strong></p>
<p>
	The private sector is seen active in developing and operating service infrastructures that are much needed for the general public. Private schools, colleges and hospitals have set a level of quality of services which their public counterparts are unable to compete with. Shrestha said that the issues witnessed in these sectors like over commercialisation can be solved if the PPP model can be used in these areas. He said that this model will help to expand the service over a larger area and larger group of service recipients. This model prevents these basic services from being too profit oriented.</p>
<p>
	<strong>Prospects <br />
	</strong></p>
<p>
	The private sector is demanding the development of basic infrastructure, however, very little is heard about the private sector taking initiative in sizeable physical infrastructure projects. Manakamana cable car is one prominent exception in this regard. In fact this project stands testimony that Nepalâ€™s private sector can develop infrastructure projects into profitable ventures. Experts believe there are numerous possibilities where private sector investors can take infrastructure as an investment opportunity. Small and medium projects in urban areas related to parking space, waste management and drinking water are attractive for this sector and identified as easy to develop too, according to Shrestha.</p>
<p>
	There are projects that garner profitable returns similar to that of any other business endeavours they have been traditionally carrying out. Some believe that development projects can be independently carried out by the private sector while some disagree with it. The latter opine that hard infrastructure development is the primary function and duty of the government. Till date, only 300 MW of total installed capacity of hydropower is produced but the demand is for 1100 MW. Besides, there is a huge market in India too. This underlines a great potential and demand for physical infrastructure.Pradeep Gangol, the Executive Manager of the Independent Power Producersâ€™ Association (IPPAN) reasons, â€œThe private investment is all the more important in poor countries like Nepal, which have limited resources to invest in infrastructural sectors like power, telecommunication, and transportation. If the private sector invests in hydropower, the government can allocate more funds for sensitive sectors like health and education.â€</p>
<p>
	<strong>Bottlenecks</strong></p>
<p>
	The biggest problem that infrastructure development faces is the financing issue. With the interest rate tremendously high, the rate of return becomes too low for anybody to find an interest in financing infrastructure projects.</p>
<p>
	Gangol says that time consuming procedure to acquire approval for forest use, environmental approval, procurement and use of explosives and land acquisition for projects also make it difficult to initiate projects. In the hydropower sector, the major problem is the constant price offered by Nepal Electricity Authority (NEA) to independent power producers for the last ten years while the bank interest rates are going up continuously.</p>
<p>
	<strong>The Way Forward</strong></p>
<p>
	The private sector players accept they are not in a position to develop large scale physical infrastructure at present. Availability of capital to finance these projects is the major hurdle. Though the business community has realised the potential of investing in infrastructure, they are doing so only in areas like hydropower and telecommunication. If the private sector is allowed to bring in foreign soft loan, developing large hydropower or similar revenue generating projects will be possible.</p>
<p>
	Similarly, Shrestha suggested that the donor agencies should involve themselves in PPP financing as well in addition to financing government projects like the ones at present. The Nepali financial market is still not oriented to PPP projects or infrastructure development. So a special tool can be devised for collecting capital from this market.</p>
<p>
	Similarly, general public can also be encouraged to invest in infrastructure projects. The governments in the developing countries like Nepal mostly have the budgetary constraints to commence the development projects. Therefore, PPPs can prove to be the alternative source of infrastructure investment. To attract and invite the private sector, first of all, the government must devise a viable project and put a certain amount of money.</p>
<p>
	Development partners too must look at such projects along with the government projects which will also help make greater impact of the donor funding. It is definite to take few more years when the private sector will gain confidence and prepare itself to develop infrastructure. Though there are hopes and prospects, it is certain that much time is required to see if private sector owned development projects actually become a reality. &nbsp;</p>',
			'published' => true,
			'created' => '2012-02-24',
			'modified' => '2012-08-23',
			'keywords' => '',
			'description' => 'In 2009/10
Nepal was
placed in 131st
position out of
133 countries
in the quality of
infrastructure.
In 2010/11,
Nepalâ€™s position
further declined
to 139th position.Projects of small
nature can be
most suitable
at the moment
considering
the fi nancing
capacity of the
private sector.',
			'sortorder' => '542',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	),
	(int) 14 => array(
		'Article' => array(
			'id' => '641',
			'article_category_id' => '40',
			'title' => 'The Government Should Play A Proactive And Facilitating Role',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p>
	Pradeep Gangol is the Executive Manager of the Independent Power Producers Association, Nepal (IPPAN). IPPAN has been consistently advocating and lobbying for investor friendly environment in Nepalese power development. Gangol is also a senior hydropower engineer and has more than two decades of experience to his credit in planning, surveying and designing of hydropower projects. During his long career, he was also involved in the reconnaissance and feasibility level design of micro and small hydropower projects, river training projects and slope stabilisation projects. In an interview with New Business Age, Gangol shared his views on prospects and constraints of developing hydropower based on private sector investment.</p>
<p>
	<strong><img align="left" alt="cover story" border="1" height="500" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/cove4.jpg" style="margin:10px; padding:10px;" vspace="10" width="378" />What is the prospect of private sector investment in Nepalese hydropower sector?</strong></p>
<p>
	The prospect of private sector investment in Nepaleses hydropower sector is indeed great. The enormous power potential in Nepal and the huge market for it, both domestically and in neighbouring countries make Nepal a lucrative destination for domestic and international investors. The private investment is all the more important in poor countries like Nepal, which have limited resources to invest in infrastructural sectors like power, telecommunication and transportation. If the private sector can invest in hydropower, the government can allocate more funds for sensitive sectors like health and education. However, the government of Nepal has to do a lot to improve the investment climate in Nepal so as to lure investors to invest in Nepalese&nbsp; hydropower sector.</p>
<p>
	<strong>Hydroelectricity sector has been attracting some private investors for developing projects. How can the private sector investors be encouraged to invest further in this sector? <br />
	</strong></p>
<p>
	The Government of Nepal has to think in a more liberal way and announce a series of incentives that will make Nepalese power sector the most lucrative for investment in the world. Such measures/incentives will eventually lead to the construction of numerous small, medium and large hydropower projects all over Nepal, and help create employment for millions of people. It will also generate billions of rupees, through royalties, for the government and local DDCs and VDCs and help local people become prosperous through purchase of shares. Besides, it can accelerate local development through CSR activities like access roads, heath posts, schools, trails, irrigation canals, vocational and technical training etc. The government should keep in mind that investment will flow where there is an opportunity for profit.</p>
<p>
	<strong>Is it the issue of returns or are there any other reasons for private sector being hesitant to invest in infrastructure? <br />
	</strong></p>
<p>
	In spite of enormous potential for hydropower development in Nepal and possibility of huge power market in India, investors are still shying away from investing into Nepalese power sector. Besides rate of return issues, Nepal has to make sure that it has open access to the Indian market through a government-to-government agreement.</p>
<p>
	And the government has to assure that there will be policy stability at least for a reasonable period of time, say 10 years. Last year, for example, the department of electricity development (DoED) made changes in its rules and regulations four times within a year. Such frequent changes in rules and regulations and policies do not help in enthusing investors to invest in Nepalese power sector. Furthermore, it is a very time consuming process to acquire documents related to forest clearance, EIA, procurement and use of explosives. Land acquisition for projects is also equally difficult. Now-a -days, it is becoming increasingly difficult to manage local expectations.</p>
<p>
	<strong>Do you see the possibility of developing projects independently by private companies? <br />
	</strong></p>
<p>
	Nepali power companies can develop small power projects (up to 25 MW) independently. For bigger projects, however, they have to enter into joint ventures with foreign power companies or investors. The government should encourage more and more domestic investors to invest in hydropower, by way of equity investment.</p>
<p>
	<strong>Why do you think commercial banks are hesitating to invest in this sector?</strong></p>
<p>
	It is a very strange situation that though Nepal is facing an unprecedented 19 hoursa- day of load shedding, the commercial banks are reluctant to invest in the power sector. The main reason is that the power purchase agreement (PPA) rates have remained virtually stagnant over the last 10 years. During the same period, the prices of construction materials like cement, steel rods, copper wire, fuel costs, and labour charges have increased exponentially.</p>
<p>
	To make matters worse, the bank interest rates have also increased from 10 per cent to 15 per cent. The government is still hesitant to make suitable adjustments in PPA rates and thats why the PPA rates reflect market conditions. For example, if a farmer finds that the cost of producing potatoes is Rs 20 per kg as against the market price of Rs 16 per kg, s/ he will rather invest in producing other crops that ensure better rates of return. This is the reason for which the commercial banks are reluctant to invest in the power sector.</p>
<p>
	<strong>What are the challenges for investors after developing a project? <br />
	</strong></p>
<p>
	The challenges for investors to invest in Nepalese power sector are many. The tariff rates do not reflect market conditions while the bank interest rates are still high. It is difficult and time consuming to overcome bureaucratic hassles to acquire documents related to forest clearance, EIA report, procurement and use of explosives etc. Land acquisition is another problem that the investor is finding increasingly difficult to cope with. Policy changes are frequent, more often to discourage the investors. And lastly, it is becoming increasingly difficult to cope with the management of local expectations.</p>
<p>
	<strong>How do you expect the government to play a role so as to invite more private investors in this sector? <br />
	</strong></p>
<p>
	The government has to make appropriate changes in the electricity act and policies so as to instil confidence in investors. There should be an electricity regulatory commission that will create a level playing field for both private and public sectors. The government should make adjustment in power tariff so as to ensure reasonable rate of return. If needed, it should think about VAT exemption to make the power sector most lucrative in Nepal. The objective of the whole exercise should be to lure general public (through shares), investors, and banks to invest enthusiastically in the power sector. There should be policy stability for at least 10 years. Furthermore, a new department of clearance can be established under the energy ministry to ensure that all documents are processed within a month. The government should play a proactive and facilitating role in acquiring land for projects and managing local expectations.</p>
<p>
	<strong>How do you find the government's role in ending the energy crisis at the earliest and accelerate power development in Nepal?</strong></p>
<p>
	Nepal is facing unprecedented load shedding of 19 hours a day which is a serious problem. But the government does not seem to be as serious as the grave situation demands. The measures announced by the government seem to be piecemeal, rather than announcing all the needed measures at once. The present power crisis, if continued any longer, will eventually put our entire economy to a grinding halt. Therefore, the politicians have to become more serious in solving Nepalese power problems. &nbsp;</p>',
			'published' => true,
			'created' => '2012-02-24',
			'modified' => '2012-08-23',
			'keywords' => '',
			'description' => 'Pradeep Gangol is the Executive Manager of the Independent Power Producers Association, Nepal (IPPAN). IPPAN has been consistently advocating and lobbying for investor friendly environment in Nepalâese power development. Gangol is also a senior hydropower engineer and has more than two decades of experience to his credit in planning, surveying and designing of hydropower projects.',
			'sortorder' => '541',
			'image' => null,
			'article_date' => '0000-00-00 00:00:00',
			'homepage' => false,
			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
		)
	)
)
$current_user = null
$logged_in = false
$xml = false
simplexml_load_file - [internal], line ??
include - APP/View/Elements/side_bar.ctp, line 133
View::_evaluate() - CORE/Cake/View/View.php, line 971
View::_render() - CORE/Cake/View/View.php, line 933
View::_renderElement() - CORE/Cake/View/View.php, line 1224
View::element() - CORE/Cake/View/View.php, line 418
include - APP/View/Articles/index.ctp, line 157
View::_evaluate() - CORE/Cake/View/View.php, line 971
View::_render() - CORE/Cake/View/View.php, line 933
View::render() - CORE/Cake/View/View.php, line 473
Controller::render() - CORE/Cake/Controller/Controller.php, line 968
Dispatcher::_invoke() - CORE/Cake/Routing/Dispatcher.php, line 200
Dispatcher::dispatch() - CORE/Cake/Routing/Dispatcher.php, line 167
[main] - APP/webroot/index.php, line 117

file not found!

Latest

173 People Die in Disaster Incidents since June 10

Crusher Federation Urges PM Oli for Industry Renewal

Prime Minister Calls for Enhancing 'Hello Sarkar' Service

Bardiya National Park Sees Increase in Tourist Arrivals

Experts, Manpower Agencies at Odds Over Draft of Labour Migration Policy

Lower Seti Hydropower Project Acquires o500 Ropanis of Land

Government Proposes Formation of New Authority to Regulate Cooperatives

Sugar Prices Surge ahead of Festive Season amid Govt’s Failure to Import Sugar

BFIN to Host Conference in Kathmandu on Wednesday

Price of Gold Reaches All-Time High in Nepal

FOREX

Currency	Unit	Buy	Sell
U.S. Dollar	1	121.23	121.83
European Euro	1	131.65	132.31
UK Pound Sterling	1	142.47	143.18
Swiss Franc	1	124.29	124.90
Australian Dollar	1	71.69	72.05
Canadian Dollar	1	83.90	84.32
Japanese Yen	10	10.94	11.00
Chinese Yuan	1	17.17	17.26
Saudi Arabian Riyal	1	32.27	32.43
UAE Dirham	1	33.01	33.17
Malaysian Ringgit	1	27.36	27.50
South Korean Won	100	9.77	9.82

Update: 2020-03-25 | Source: Nepal Rastra Bank (NRB)

Bullion

Fine Gold	1 tola	77000.00
Tejabi Gold	1 tola	76700.00
Silver	1 tola	720.00

Update : 2020-03-25

Source: Federation of Nepal Gold and Silver Dealers' Association

Petroleum

Petrol	1 Liter	106.00
Diesel	1 Liter	95.00
Kerosene	1 Liter	95.00
LP Gas	1 Cylinder	1375.00