Category Archives: nepali economy

Obstacles for Business in Nepal: Instability and Maoists

Posted on January 29, 2010 by | 1 Comment

Political instablity and power outage are the two major contributors to Nepal’s poor investment climate, a World Bank report says. It forget to mention the number one reason: the Maoists.

Nepal 2009 Enterprise Survey points out lack of access to finance and labour regulations as other major obstacles. Obstacles, however, differ from industry to industry. Transport and electricity are especially problematic for the tourism industry, whereas labour regulation is the key impediment for the manufacturing sector. The survey conducted last year has covered 13 cities across the country. Nepal’s decline in export has rightly been potrayed in the survey. Only four percent of the firms are exporters against the South Asian average of 20 percent. Nepal, however, has fared better in some areas: Tax rates, tax administration, business licensing and permits and court functioning. (detail)

Maoists threat to GMR

Nepalis have been bearing the brunt of treacherous power cuts for some years and it is only projects such as these that can provide relief to them a few years down the line. The Maoists have no right to deny the people the future benefits that such projects will bring to them. Continue reading →

→ 1 Comment

Posted in nepali economy

Tagged , , ,

TEN Reasons to Invest in Nepal

Posted on December 10, 2008 by | 44 Comments

By Bhupendra Khanal

Many aggressive companies are staying away from Nepal, thanks to poor security situation. The power majors are considering of huge investment in Hydropower sector to export power to the power hungry states of India and China, and this is good news for Nepal. A country with very high hydro-power potential has one of the costliest energy, which simply is not acceptable. Nepal needs to reform the energy sector and prepare the base for development.

While the companies like Samsung, Kodak, LG, Kia etc have entered Nepal, their performance has not been very good in the past. The things are likely to change when Maoist are in the government. Many more companies are likely to follow the investment in this Himalayan country provided the early movers succeed. There are multiple reasons why companies would like to invest in Nepal:

1. Favorable Location: Nepal is a country between India and China, two fastest growing economies globally.

2. Power Sufficiency: Nepal is power rich (hydropower potential is more than enough for any future growth in economy).

3. Pleasant Climate: Nepal has one of the best climate on the world. The valley cities of Kathmandu, Pokhara, Surkhet and Dang are the front runners for this. Eastern city Dharan and western city Butwal are other places with comfortably moderate climate in the likes of Indian Silicon Valley, Bangalore. Continue reading →

→ 44 Comments

Posted in nepali economy

Tagged

Bad Ass Economy: Inflation Soars to 13pc

Posted on October 7, 2008 by | 22 Comments

A press statement issued by Nepal Rastra Bank said that food and beverage prices shot up by 13.4 percent while non-food and service rates were up 12.7 percent.

Propelled by a remarkable rise in the prices of food and non-food commodities, the rate of inflation during the first month of the current fiscal year climbed to an alarming 13.1 percent from 6.3 percent recorded during the same period last year. A press statement issued by Nepal Rastra Bank said that food and beverage prices shot up by 13.4 percent while non-food and service rates were up 12.7 percent. Of the items showing a double-digit price rise, the price indices of oil and ghee increased by a whopping 36 percent in mid-August 2008 compared to an increase of 11.4 percent a year ago, said the release. Likewise, the sub-group of grains and cereal products witnessed a rise of 23.5 percent in mid-August 2008 while the prices of rice and rice products increased by 27.8 percent compared to an increase of 7 percent a year ago. Continue reading →

→ 22 Comments

Posted in nepali economy

Tagged

Maoist New Nepal: Industrial Capitalism Covered by Socialism

Posted on October 1, 2008 by | 28 Comments

By Bishnu Pathak and Neil Horning

The reactions to the budget from the nation’s policymakers and critics are often guided by four motives. Those who made the budget in the past regard it as imbalanced and untenable and heap praise on their own budget. Others who suffered defeat in the CA polls from the Maoists are scared of the perpetual marginalization that stares them in the face and wish to see their Maoist rivals failing and faltering on all fronts and to stand thus vindicated. Another group of intellectuals, those affiliated to political parties other than the Maoist, appear inordinately critical in expounding their techno-statistical expertise on the budget and dub it as overtly ambitious and populist. The Maoists and the intellectual professionals close to them, however, claim the budget as a historical document, regarding it to be achievable, pro-poor, and growth-oriented, and blame their critics as feudal-minded. The donors, in general, remain neutral, at present, and the people are waiting for the budget to deliver in the field. For, that is where its ultimate test will lie. Continue reading →

→ 28 Comments

Posted in nepali economy

Tagged , ,

The Maoist Budget of Rs 236 Billion: Bold but Not Beautiful

Posted on September 20, 2008 by | 28 Comments

In their first ever budget speech, the Maoists promise to build the infrastructures and propel the economic growth that they mercilessly destroyed and pushed back in the name of revolution during the decade-long insurgency

By Prem Khanal
the Kathmandu Post

The first fiscal-year budget of the Democratic Republic of Nepal unveiled yesterday by the Maoists-led government was extraordinarily ambitious both in mobilization of resources and in expenditures.

The budget for fiscal year 2008/09, which vows to start building a solid platform for putting the economy onto a double-digit growth track in two years, proposes to spend Rs 236 billion – almost Rs 647 million per day. However, experts say that the budget, which plans to raise expenditure by 45 percent in a single year, lacks concrete plans for improving the poor capacity for implementation of development projects, a key factor in the low absorption of allocated budgetary amounts. Continue reading →

→ 28 Comments

Posted in nepali economy

Tagged ,

Nepal’s Per Capita Is $470 (Which Still Looks Like a Misprint)

Posted on June 9, 2008 by | 19 Comments

Agriculture growth 14 yr high
By Prem Khanal

Propelled by the a strong growth in both the agriculture and non-agriculture sectors, the long-ailing economy has bounced back to record 5.56 percent growth in the current fiscal year, highest economic expansion in last the seven years. With the growth, the total size of Nepali economy in producers’ price has scaled up to Rs 828.8 billion (US$12.80 billion) while the per capita income has also increased by around 11 percent to Rs 30,361 per year (470 US$). However, with the creeping inflation, which is around 9 percent, the real purchasing capacity of Nepali consumers is estimated to grow marginally in the year. According to a preliminary estimate of national accounts prepared by the Central Bureau of Statistics (CBS), agriculture sector, which contributes 32 percent to national economy, grew by 5.65 percent while the growth of non-agriculture sector was around 5.52 percent. Continue reading →

→ 19 Comments

Posted in nepali economy

Tagged

Our Geography and Our Economy

Posted on May 24, 2008 by | 42 Comments

Does Mr. Prachanda also have the spirit and determination to lead the impoverished Nepal and be the helmsman of 27 million Nepalese?

Samyam WagleBy Samyam Waglé

While the debate about the probability of miraculous economic success in Nepal under Maoists leadership is going on, they have not still come up with such strong convincing economic policies that would bring such dramatic turn allowing the three fold increase in GNP of the country in just a period of a decade.

No doubt that if it is possible, it is possible from capitalism and not socialism as Maoists believed and fought for. But they must have realized now after the failure of China under Mao and success under Deng which made them change their economic policy. Continue reading →

→ 42 Comments

Posted in nepali economy

Tagged , , ,

It's Economy Stupid! Maoist Comrades Try to Assure the Business Community

Posted on April 16, 2008 by | 9 Comments

Stock market has been crashed and business circle is confused. As the news of Maoist victory in the polls come out, the Maoist leadership is trying hard to assure the business community that they are here for capitalism.

For the CPN Maoist, the victorious party in the April 10 CA polls, the campaign hasn’t ended just yet. The party leadership is in full swing to convince the national forces, business world and the international community- at the same time- that they are not radical communist and there will be no cultural revolution in Nepal. Mao has died a long time ago. It seems that the Prachandapath (the path of Prachanda), an ideology propagated by Chairman Prachanda, tells them to have a very good relationship with ‘expansionist’ India and ‘imperialist’ America. Capitalism, they try to convince, is their mantra too. Prachanda says they are for the economy in which capitalists can have profit. Prachanda also says that there will not be a dictatorship of the proletariat. In his address to the business leaders in Kathmandu today the Maoist Chairman announced that the power will not be used tyrannically, reports Kantipur, but in the welfare of the people and the country. Continue reading →

→ 9 Comments

Posted in nepali economy

Tagged , , , , ,

In Autocracy, Nepal Economy Goes Down

Posted on March 27, 2006 by | 21 Comments

Renewing its warning issued a month ago, Kathmandu based economic watchdog Institute for Development Studies(IfDS) today said, ” While stagnant income and increasing inflation mean hardships for the ordinary people, capital flight points out that the future economic prospects of the country are bleak.” Here i s the complete text of the report disclosed by the organization:

The Economic Level and Directionafter February 2, 2006……

Institute for Development Studies(IfDS)

Executive Summary

1. After the publication of our report on February 20, a new wave of interest was shown by all on the state of Nepalese economy. But no improvements have been noticed yet in the overall performances of the economy. Instead, a number of new policies and programs initiated by the government in the recent past have helped the economy to deteriorate further. Against this background, it is not necessary to change the following hypothesis discussed in our first report:

(a) “In the lack of proper measures to improve the situation, the economy may fall together abruptly;”

(b) “If the present trend continues, the government may be financially bankrupt by the end of June”;

(c) “Once the economic problem is exploded, we will not have long time in the name of finding alternative programs. We will not be surprised if total anarchy prevails in the country….The national identity itself will be at stake”. Continue reading →

→ 21 Comments

Posted in nepali economy

Tagged ,