Of Nepal

Namche Bazaar

2016-10-20T20:07:00.004-07:00

Namche Bazaar
One of the most famous and popular stops on the way to Everest is a village called Namche Bazaar, which is located at 11,286 feet (3440 meters). Most trekkers reach Namche on their second day of hiking, but to get there they must first conquer a very long, and challenging hill that is a test of stamina for just about anyone. In fact, that day on the trail is one of the most challenging of the entire trek, as you gain more than 2600 feet (800 meters) in altitude. Fortunately, nearly everyone who makes the trek ends up spending an extra day in Namche, giving them a chance to rest, acclimatize, and explore the place further.

Nestled along the crescent shaped slopes of the Khumbu Valley, Namche Bazaar is both charming and exhausting all at the same time. The narrow alleyways are lined with gear shops and teahouses, but you’ll have to climb more steps than you’d care to count just to visit any of them. It is especially disheartening when you arrive in the village after 3 or 4 hours of climbing, only to to discover that the lodge that you’re staying in happens to be on one of the upper tiers, and you’ll have to climb yet more stairs just to get to it. Luckily, Namche has some of the most comfortable and inviting teahouses in the entire region. You might even get a warm shower (for an extra charge!) and a TV in the common room.

With a population of roughly 1500 people, Namche is the largest town in the Khumbu Valley, and as such, has a number of amenities that you won’t find as you go higher. For instance, there is an actual bank in Namche, not to mention a police checkpoint, and a karaoke bar. Internet cafes are common as well, although I’m pretty sure they measure their connection speeds in terms of “baud” and not “megabits”.That population in Namche swells dramatically during the spring and fall trekking seasons of course, with backpackers and climbers flocking to the area in droves. It is not uncommon to hear a half dozen languages being spoken while you stroll the cobblestone streets past the numerous gear shops, and if there is anything that Namche has an abundance of, it is gear shops. If you’re a few days into the trek, and you find you’re in need of some piece of gear, then chances are you can find it in Namche Bazaar. Whether it’s boots, sleeping bags, or warmer clothes, you’ll find everything you could possibly need, often at excellent prices. Some of the gear is authentic, some are cheap knockoffs, but the village is an outdoor gear lovers dream come true, and while it is possible to resupply on some items later in the trek, everything gets more expensive the higher you go.

As I mentioned, you’ll actually spend a “rest day” in Namche to help you get use to the altitude and give you time for a bit of recovery. But that doesn’t mean that you’ll be taking it easy while you’re there. In fact, on my second day in Namche, my trekking group was up bright and early, as usual, and after breakfast we were on our way up a nearby mountain to continue working on our acclimatization. On that morning climb we actually went up an additional 1300 feet (400 meters), and got our first views of Everest, Lhotse, and one of the most beautiful mountains on the planet, Ama Dablam.

With our acclimatization climb out of the way, we were back in Namche by lunch time, and had the rest of the afternoon to spend at our leisure. Most of us took it easy, taking a nap, curling up with a good book, or playing cards in the lodge’s common room. Namche is the first part of the trek where altitude sickness begins to become a real concern, and it is important that you not only work on acclimatizing, but also get plenty of rest. You’re also burning a lot of calories on the trek and expending a lot of energy, therefore you’ll spend your rest days eating plenty of food and drinking lots of water as well.

Before long, your stay in Namche is over, and you’re back on the trail to ever higher, and ever smaller, villages. Each has their own unique character and each brings you one step closer to your ultimate goal – Everest. But when you depart Namche, you truly feel like you’re stepping into the High Himalaya and moving into more remote territory. The first few days are just a warm up for the adventure that is just ahead.

LANGTANG TRAIL IS OPENED!!!

2016-10-20T20:07:00.002-07:00

Langtang one of the most affected by 25 April 2015 earthquake where main settlement Langtang was totally swept away by killing more than 400 people. It's already one and half year past since last earthquake. After earthquake lots of things happen with Langtangpas. Finally almost all people are able to return back to Langtang valley again.

Rebuild finished at certain places and ready to serve for tourists as well.

#Rimche two hotels are finished rebuild and ready for welcoming guest.

#Lama hotel six hotels are rebuild and ready for welcoming guest.

#Riverside one hotel finished rebuild

#Woodland finished rebuild

#Ghora Tabela near army post one hotel finished rebuild and ready for welcoming guest.

#Thankshyap four hotels are rebuild and ready to serve for guest.

#Gumba Kangtanshah four tea house rebuild and ready to serve.

#Langtang Village ten hotels finished rebuild and ready to serve. Now Langtang village have capacity of 60 tourists.

#Mundu Village have five hotels finished rebuild and have capacity of 40 tourists.

#Sindium village one tea shop is rebuild and ready to serve.

Nespali hard rock cafe and another new tea shop , where two tea shop ready to serve.

#Kyanjin Gumba which is now biggest settlement after earthquake where now 25 hotels rebuild where more than 300 tourists capacity now. Two bakeries function. Most famous Dorje Bakery is temporarily functioning and serving it's customers since April 2016.

Trail are not really good because of monsoon but after monsoon it will be ready for trekkers. If you like to trek with Langtangpas please inbox us. We have many well trained guide and porter guide available with us.

The Langtang trek is a good option if you are looking for a relatively short trek with easy access from Kathmandu. The trek has a number of good quality tea houses that are spaced every few hours along the trek making it easy to find a comfortable place to sleep and a good meal. Here are some quick facts about Langtang Tea Houses and a village by village run down .

Quick Facts: Langtang Tea Houses

1) Menus – Tea houses along the Langtang Trek serve only vegetarian food.

2)Sleeping – Tea houses will provide blankets and pillows free of cost so it’s not required to bring a sleeping bag.

3)Internet – There is no internet access on the Langtang Trek and Syabrubesi is the only town from where you will find reliable internet.

4)Phone Calls – Tea houses usually have landlines from which you can make phone call for a fixed rate. If you have a Nepali Sim Ncell only works up to Lama Hotel and Sky Network works above Lama Hotel.

Please share to promote tourism in Langtang again.

One of the biggest festivals of nepal : Teej

2016-10-20T20:06:00.003-07:00

One of the biggest festivals of nepal : Teej

Teej is the fasting festival for women. It takes place in August or early September. The festival is a three-day long celebration that combines sumptuous feasts as well as rigid fasting. Through this religious fasting, hindu women pray for marital bliss, well being of their spouse and children and purification of their own body and soul.

Traditionally, the ritual of Teej is obligatory for all Hindu married women and girls who have reached puberty. Exception is made for the ones who are ill or physically unfit. In such circumstances a priest performs the rites. According to the holy books, the Goddess Parbati fasted and prayed fervently for the great Lord Shiva to become her spouse. Touched by her devotion, he took her for his wife. Goddess Parbati, in gratitude sent her emissary to preach and disseminate this religious fasting among mortal women, promising prosperity and longevity with their family. Thus was born the festival of Teej.

The first day of Teej is called the "Dar Khane Din". On this day the women, both married and unmarried, assemble at one place, in there finest attires and start dancing and singing devotional songs. Admist all this, the grand feast takes place. The jollity often goes on till midnight, after which the 24 - hour fast commences. Some women without a morsel of food or drops of water while others take liquid and fruit.

Gaily dressed women can be seen dancing and singing on the street leading to Shiva temples. But the main activities take place around the Pashupatinath temple where women circumambulate the Lingam, the phallic symbol of the lord, offering flowers, sweets and coins. The main puja (religious ceremony) takes place with offerings of flowers, fruits etc made to Shiva and Parbati, beseeching their blessing upon the husband and family. The important part of the puja is the oil lamp which should be alight throughout the night for it is bad omen if it dies away.

The third day of the festival is Rishi Panchami. After the completion of the previous day's puja, women pay homage to various deities and bathe with red mud found on the roots of the sacred Datiwan bush, along with its leaves. This act of purification is the final ritual of Teej, after which women are considered absolved from all sins. The recent years have witnessed alteration in the rituals, especially concerning the severity, but its essence remains. No matter how agonizing the fast may be Nepalese women have and will always continue to have faith in the austerities of Teej.

The biggest festival of Nepal Indrajatra

2016-10-20T19:59:00.003-07:00

The biggest festival of Nepal Indrajatra

The traditional festival, Indrajatra, is being observed by worshipping the God of rains and good harvest, Indra. It is celebrated especially in the three districts of the Kathmandu Valley, including Dhulikhel and Dolakha.

The eight-day long festival falls on the Bhadra shukla chaturdashi as per Nepali calendar.

A sacred wooden pole called Lingo with flags on its top, known as ‘Indradhowjotthan' is erected at Hanuman Dhoka, which marks the beginning of the festival.

Different cultural dances including Bhakkunach, Mahakalinach, Lakhenach, Dasavatarnach and Pulukisinach are performed.

On the occasion, President Bidhya Devi Bhandari today reached the Basantapur Durbar area and attended the celebration of festival by worshiping the Living Goddess, Kumari.

She offered puja to Lord Ganesh and Lord Bhairav and also received prasad from the priest.

The ceremony was also attended by Acting Prime Minister, Chief Justice, Speaker, chiefs of the constitutional bodies, security chiefs, representatives of diplomatic missions, and the commoners.

Dashain Festival in Nepal

2016-10-20T19:59:00.001-07:00

Dashain

Dashain Festival in Nepal

Dashain is the greatest festival of Nepal Hindus. Like other festivals, it is also based on the lunar clendar and falls in the months of Aswin or Kartik. Dashain is observed for 15 days from the new moon day (Ghatasthapana) to the full moon day (Kojagrat Purnima). It is a festival of great delight, enthusiasm and rapture.

The time of Dashain is very fine. The weather is fair and mild. There is no more mud or dust. Farmers are getting relief from their tiring season of plantations and weddings. Schools, colleges, factories and offices remain close. Fair and pleasant weather, ripening and rustling crops, busy roads and paths, crowded shops, speedy renovations and cleanliness of roads, temples, taps, etc., and decorations all indicate the arrival of the greatest festival.

Dashain celebrates the inevitable victory of virtune over vice, of truth over untruth and of justice over injustice. The goddess Durga known as the goddess of victory is worshipped with great devotion, during the first nine days called Nawa Durga. People swarm to the well-maintained temples of the Goddess Durga. They make sacrifices of goats, buffalos, etc. The Chandi, a story of victory achieved by deities over devils in Satya Yugy, is recited for sacredness and sanctity. It is believed that in Treta Yuga, Lord Rama had secured victory after performing puga to Goddess Durga. The tenth day known as Vijayadashami is the main day of the vacation festival. On this day, people receive red tika, jamara and blessings from their seniors. Rato tika is the symbol of both fortune and victory in Hindu culture.

Dashain is also the time of family gatherings and feasts people forget their differences and misunderstandings and visit their relatives. Those away from their home or country return during the time people wear new clothes, eat sels, beaten rice, meat chocolates and spice. For very poor people it is the rare occasion of good and delicious food. Traditional swing such as the bamboo supported Linge pings are very popular. Nepali lifestyle is highly reflected by this festival. Malshree songs are played. Media such as radio, TV and Newspaper broadcast or publish wishes and greetings both their own and the sponsored ones. There is gun firing accompanied by flower showering at Tundikhel in Kathmandu. It’s tradition for commoners to receive tika from the state head of the country.

Many people celebrate the festival with grate pomp and shows. Celebration are often extravagant. Widespread drinking and gambling often lead to quarrels and fights. For poor people Dashain is rather a curse it is very difficult for them to afford for the traditional celebrations. Many are left bankrupt due to their extravagance. The sacrifices offered to the goddess is very terrific people fall victim to indigestion , food poisoning and accidents. Before Dashain there are a lot of crimes such as pick pocketing, robbery, and loots. Market price often tend to rise before and on the eve of the festival. Such evil aspects of Dashain need to be curbed or discarded.

Getting Your Visa for Nepal (Visa processing)

2016-10-20T19:57:00.000-07:00

Heading to Nepal? Everyone needs a visa (except Indian nationals), but luckily it’s an easy process. Here’s the latest information on obtaining a tourist visa and how it works for visa-on-arrival.

Obtaining A Tourist Visa

The easiest way to get a tourist visa for Nepal is by applying on your arrival, but you can also apply in advance. Here are the three current ways to obtain your Nepal visa:

Apply upon your arrival at Kathmandu’s international airport (TIA);
At any of the land border crossings open to foreigners (each has an Immigration office);
Or apply at one of Nepal’s foreign consulates from abroad, in advance.

Price & Duration

There are three options for the length of a tourist visa (for nationals of SAARC countries, the first 30 days is free):

15 days - $25 USD
30 days - $40 USD
90 days - $100 USD
Multiple-entry - $20 USD (useful if going back-and-forth between Tibet/India)

Visa-On-Arrival

You’ll find visa application forms in the arrivals’ hall, as well as electronic registration machines that read your passport, take your photo, and print out a completed form to submit to immigration. Just in case, be sure to have the following items handy:

One passport-sized photo with a light background;
Cash to pay the visa fee (USD is best, especially at land crossings, but you can also pay with EUR, CHF, GBP, AUD, CAD, HKD, SGD, and JPY);
A passport that is valid for at least six months.

Please note that the following nationalities cannot obtain a visa-on-arrival: AFG, IRQ, CMR, GHA, SOM, SWZ, PSE, ZWE, NGA, ETH, and LBR.

Expert tip: Fill out your disembarkation card on the plane so you can quickly move through the queue in the arrivals’ lounge.

Apply Online (In Advance)

Since 2014, you can apply for a tourist visa online within 15 days of your date of arrival in Nepal. You’ll need the address of your hotel and a recent digital version of a passport-sized photo that you can upload to the application. Once you’ve submitted the form, print out the confirmation receipt and show this to the Immigration officer upon arrival along with your passport and the proper amount to pay for your visa.

To apply online, click here: http://online.nepalimmigration.gov.np/tourist-visa

Extending Your Visa

You can extend your Nepal visa for up to 150 days at the Immigration Department in Kathmandu or Pokhara. It costs $30 for 15 days, and $2 per day after that. Usually the turn-around is the same day, and you’ll need to submit your passport, extension fee, one photo and the application extension form to complete the process.

A Few Useful Tips

It’s a good idea to bring 4-5 passport photos from home for your visa & trekking permit applications, and official documents;
Kathmandu's airport has bank counters where you can exchange currencies;
It also has a photo booth to create passport-sized photos, if you forgot to bring some;
Having a couple photocopies of your passport is always handy while traveling;
Bring extra USD cash and convert a small amount at the airport to pay for your taxi to Thamel, where you can convert the rest at a better exchange rate.

Apple Iphone 7 and 7plus | New Camera

2016-09-15T07:54:00.000-07:00

One of the most interesting feature for photographers is the introduction of two cameras on the new Iphone 7 plus launched last evening.
Other than the standard camera with the 28 mm F 1.8 wide angle lens, Apple has also introduced a second camera with a short telephoto lens 56 mm which would be useful for portraits, throwing the background out of focus etc.
Despite the fact that phone cameras would usually lag behind their larger counterparts there is a lot to recommend in Apple's new offerings.
The sensor is now 12 MP with an intelligent image processor - there is also RAW capability using Adobe's DNG format which can be processed in Lightroom. The camera is also capable of 4K video recording.
Other plus points are extended battery life which has always been an issue with Iphones as compared to the competition.
It would be interesting to see how many users upgrade to the 7plus - I am sure many photographers will be interested.

Impact of trade blockade

2016-08-21T22:36:00.000-07:00

Impact of trade blockade on inflation and external sector

Earlier, I briefly gave an outline of the impact of trade blockade on government expenditure and revenue in the first half of FY 2016. Here is a follow up brief blog on the impact of trade blockade on inflation and external sector stability. A good mid-year FY 2016 snapshot is provided by the IMF team here.

Inflation is creeping up fast: from 6.9% in mid-August 2015 to 12.1% in mid-January 2016. The last four months (when the supplies disruptions due to blockade was ongoing) had inflation higher than the corresponding months in FY 2015. The deviation from Indian inflation was also higher in all the first six months of FY 2016, which indicates not only the impact of the blockade (which is the primary source), but also the impact of supply-side constraints and anti-competitive practices within Nepal. Overall, food inflation (has 43.91 weight on CPI basket) was 15.2% in mid-January and non-food inflation was 9.7%. The blockade barred Nepali traders from importing goods at a relatively cheaper prices as a result of the sustained low oil prices globally.

The impact of the earthquake, supply disruptions (which affected travel and operation of manpower agencies), and slow demand from migrant workers
from employment destination overseas (particularly due to the impact of low global oil prices in oil producing countries in the Gulf and Malaysia) lowered the number of workers leaving for work overseas.

However, workers' remittances have been increasing. At $3.1 billion by mid-year FY2016, it is higher than $2.8 billion by mid-year FY2015— a growth rate of 9.8% in dollar terms. This may slowdown in towards the end of FY2015 and in FY2016.

The decline in trade deficit (as blockade drastically lowered exports and imports) and an increase in workers’ remittance inflows boosted current account balance and balance of payments. Merchandise exports were down by about $178.5 million in the first half of FY2016 from the level in the corresponding period in FY2015. Similarly, imports went down by $1.2 billion, with oil imports plunging down by $381.6 million and non-oil imports by $790.1 million compared to the first six months of FY2015. Consequently trade deficit was down by $993 million. Current account surplus was $1.4 billion. Forex reserves are also up.

Few points:

Inflation may not come down anytime soon even though inflation in India is projected to be around 4.0% to 4.5% in the next fiscal year. Fuel and gas supplies have improved but they are far below the demand right now. Its lingering impact will continue to keep food and non-food prices at elevated levels.
The hiring freeze by Malaysia is another major worry as it accounts for about 40% of total overseas employment. Similarly, the slowdown in Gulf countries due to low oil prices may depress the demand for Nepalese workers. Hence, remittances inflows may be affected negatively (even after factoring in the weak Nepalese currency against the USD). This may pose challenges in external sector stability, particularly current account balance and forex reserves.
Exchange rate of Nepalese currency vis-à-vis the US dollar may remain volatile, following the movement of Indian rupee against the dollar.
Depending on how event unfolds in the remaining months, GDP growth may swing anywhere between negative 1.8% to positive 0.5% in FY2016. Inflation will probably remain in the double-digits. Current account surplus will likely decrease.

Trade blockade or earthquake

2016-08-21T22:34:00.000-07:00

Trade blockade was more damaging to Nepalese economy than the earthquake

The Central Bureau of Statistics (CBS) just released its GDP growth projection for FY2016. The growth projection is quite close to the latest IMF projection.

It offers further clarity on the impact of the trade blockade and supplies disruption (which lasted for four and a half months) and the lingering effects of the earthquake.

Overall, GDP (at basic prices) is expected to grow at 0.8% in FY2016, lower than 2.3% in FY2015 (it is a revised figure, which provisionally was estimated at 3.0% after the earthquake).

Agriculture sector is expected to grow at 1.3%, industry at a negative 6.4% and services at 2.7%.

contribution to GDP

While the earthquake affected mainly central and western regions,
the trade blockade and supplies disruption severely dented economic activities across the country. In this sense, the trade blockade and supplies disruptions were more devastating than the earthquake. Furthermore, the delay in distributing cash relief and housing grant, and in initiating reconstruction projects affected growth prospect.

It itself was affected by the blockade as construction materials and fuel could not be imported. The trade blockade and supplies disruptions exacerbated the already weak economic activities and squeezed economic potential.

Here are earlier blog posts on this issue: one year after the earthquake; impact of trade blockade on fiscal sector, and inflation and external sector

The debilitating impact of trade blockade and supplies disruptions is visible from the negative growth rate of mining and quarrying (-6.5%); manufacturing (-10.1%); electricity, gas and water (-1.7%); construction (-4.0%); wholesale and retail trade (-1.1%), and hotels and restaurants sub-sectors (-4.9%). Furthermore, within the services sector, growth rate of transport, storage and communications sub-sector was lower than in FY2015.

All of these sub-sectors are import-dependent either for final goods or intermediate goods or raw materials (including petroleum fuel and cooking gas). The effect of these unexpected blows will linger on in the coming months as economic activities are severely disrupted and dislocated by the double whammy of earthquake and blockade/supplies disruption. The acceleration of reconstruction work will be a major factor to stimulate economic activities and to expand potential growth.

Given the reduction in paddy, wheat and millet production, the CBS's growth projection for agriculture sector looks optimistic. I think the revised figures later in FY2017 will show even lower GDP growth rate as figures are adjusted for agriculture and some services sub-sectors. It could be one of the lowest in the last few decades.

In FY 2017, a lot will depend on the weather, normalization of imports and distribution networks (including fuel and cooking gas) and the scale and pace of reconstruction activities. The El Nino conditions are already contributing to droughts and forest fires have destroyed settlements and land. The monsoon rains may not be as plentiful as expected given the conditions so far.

This is going to dent agricultural sector’s recovery. The bright spot is that reconstruction work may accelerate and housing grants may be finally distributed to all the eligible households. The former will stimulate domestic production of industrial goods and services. The latter will act as a direct fiscal stimulus that will increase consumption demand.

Also, both could reinforce each other and provide the necessary jolt to the sluggish growth rate. Fast recovery of the services sector will be contingent upon the rate of remittance inflows and normalization of supplies. Overall, considering these prospects and the low base effect, GDP growth could be around 5% to 6% (ambitious) in FY2017. The risk to this outlook is sluggish reconstruction work (plus budget execution), delayed normalization of supplies and a slowdown in remittance inflows. Realistically, it could be between 4% and 5%.

DD Sports Live streaming

2016-08-21T22:30:00.000-07:00

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Nepal China accords

2016-08-21T21:07:00.000-07:00

Symbolic or viable

Reality and requirements for Nepal-China accords to work

Nepal needs serious homework to benefit from accords with China, including the important one on transit

The agreements signed between Nepal and China during Prime Minister KP Oli’s state visit has in theory ended the sole dependence on India for utilizing the transit right of a landlocked country. Furthermore, theoretically it has also increased the odds of procuring petroleum fuel and other essential supplies either from or through China. It marks a remarkable symbolic departure from the exclusive foreign, trade and transit relations Nepal has had with India for decades. The impetus for this was triggered by the supplies disruption between Nepal and India, and the latter’s cold reception and subsequent reaction to the promulgation of a new constitution last year.

Practically, it bears little significance unless Nepal upgrades existing connectivity as well as constructs new commercial custom points with China, reduces cost of doing business, establishes trust among traders on both sides, and boosts productive capacity by taking decisive action on policy and implementation fronts.

New agreements

Nepal and China released a 15-point joint statement, which was missing during PM Oli’s state visit to India, detailing the new understanding and agreements on a range of issues. The most consequential one is the Agreement on Transit Transport, whose operational details (protocol of the agreement) are yet to be worked out. The Chinese government will also “seriously consider” to provide enhanced market access to tradable goods and start work on joint feasibility study of Nepal-China Free Trade Agreement. It also includes promises to conclude a commercial deal on the supply of petroleum products.

Frustrated by the acute shortage of essential goods and supplies for about five months, analysts and the general public were quick to extol the agreements and are hoping for uninterrupted supplies and unhindered trade. However, operationalizing such agreements is not quick and easy. It requires serous homework, especially on our side, on policy, infrastructure, financial and procedural fronts. The usual tardiness of bureaucracy and meddling politicians will potentially slowdown implementation.

Trade and investment

The open border, state of infrastructure, business and family relations, language, free movement of labor, and the currency peg form the bedrock of Nepal’s trade relations with India. These are missing in the case with China and hence implementation will be even slower and difficult.

India accounted for 65.5 percent of total export and 63.5 percent of total import in FY2015. The figures for China are 2.6 percent and 12.9 percent, respectively. Accordingly, balance of trade with India was 62.2 percent of total trade deficit and 14.2 percent with China. The currency peg, which has remained unchanged since 1993 and has generally fared well for Nepalese economy given the fragile economic and infrastructure fundamentals, has supported the large and growing trade with India. Nepal’s top exports to India are light manufacture goods such as textiles, polyster yarns, zinc sheet, jute goods and some agro-processed items like juice.

The Nepal India trade treaty allows for duty free access of manufacturing goods to India, a major incentive for Nepalese exporters to continue production despite the relatively high cost. Similar tariff preferences are not available with China and the duty free access it allows to its market is applicable to all least developed countries (LDCs) as per its commitment during the global trade negotiations. Nepalese exporters face a relatively high transaction cost and tough competition in the Chinese market. Tanned skin, handicraft, woolen carpet and noodles are the top export items to China. Interestingly, these light manufacture goods are produced by importing intermediate goods from India itself. This dynamics is not going to change anytime soon given the industrial base and its sophistication.

Regarding imports, the most important one is petroleum product, which accounts for about 20 percent of total import and is higher than the total value of merchandise exports. India has been the sole supplier of petroleum fuel, which is the largest import item followed by vehicles and spare parts, rice and paddy, and other machinery parts used in Nepal’s industrial sector. Meanwhile, Nepal’s top imports from China are telecommunication equipment, electrical goods and chemical fertilizers.

Looking at the existing composition of export and import, it is not hard to notice that the basic items required by households and business community are actually imported from India and given the state of infrastructure, exchange rate regime, financial and business connectivity, it is not going to change overnight. For instance, due to the long distance and rugged terrain as well as Chinese taxes, importing fuel from China is about two times expensive than importing from India.

If we look at investment, Indian investment is concentrated in manufacturing and energy sectors, while Chinese investment is focused on energy and services sectors. Overall, Indian investment is higher than Chinese investment. Meanwhile, Indian airlines bring in the largest number of visitors to Nepal, but the share of Indian and Chinese tourists is 17.1 percent and 15.7 percent, respectively with the latter growing at the fastest rate. Indian and Chinese foreign aid commitment is about 9.2 percent and 3.5 percent, respectively, of total aid commitment.

The other most important aspect is the open labor market in India, which absorbs a majority of the seasonal migrants from poor households from upper part of far-west and mid-west and the Terai belt. The remittances from India is an important source of the household’s expenditure. This access is missing in the case of China. Proximity-wise and cost-wise, the Indian market will continue to be more attractive than the Chinese market.

Ensuring viability

How can Nepal benefit from the renewed rapprochement with China on political-economic front, but also gradually lessen the over dependence on India? Given the state of infrastructure, trade and investment pattern, and business relations, there is little to gain in the short term. Like it or not, Nepal’s dependence on India for trade, investment and third country access will not decrease any time soon. In the medium to long run, a major effort to match the infrastructure, financial and business connectivity with China could be a game changer.

However, this is easier said than done given the bureaucratic and political tardiness in implementing major infrastructure projects. Nepal has a lot of internal homework to do in terms of large public investment in infrastructure for enhanced connectivity, energy generation, capacity development, and country-specific export target based on Nepal’s comparative advantage.

Else, the agreements with China will bear no meaning beyond symbolism and we will continue to depend on India for pretty much everything used by households and businesses. The Chinese market is open, but is not easy to access and penetrate. Nepal is in a long haul to operationalizing the agreements with China and benefit from it.

It was published in The Kathmandu Post, 11 April 2016

p-values and statistical significance

2016-08-21T21:05:00.001-07:00

The use and abuse of p-values and statistical significance

Here is the American Statistical Association's (ASA) official policy statement on p-values and statistical significance.

Introduction

Increased quantification of scientific research and a proliferation of large, complex data sets in recent years have expanded the scope of applications of statistical methods. This has created new avenues for scientific progress, but it also brings concerns about conclusions drawn from research data. The validity of scientific conclusions, including their reproducible, depends on more than the statistical methods themselves. Appropriately chosen techniques, properly conducted analyses and correct interpretation of statistical results also play a key role in ensuring that conclusions are sound and that uncertainty surrounding them is represented properly.

Underpinning many published scientific conclusions is the concept of “statistical significance,” typically assessed with an index called the p-value. While the p-value can be a useful statistical measure, it is commonly misused and misinterpreted. This has led to some scientific journals discouraging the use of p-values, and some scientists and statisticians recommending their abandonment, with some arguments essentially unchanged since p-values were first introduced.

In this context, the American Statistical Association (ASA) believes that the scientific community could benefit from a formal statement clarifying several widely agreed upon principles underlying the proper use and interpretation of the p-value. The issues touched on here affect not only research, but research funding, journal practices, career advancement, scientific education, public policy, journalism, and law. This statement does not seek to resolve all the issues relating to sound statistical practice, nor to settle foundational controversies. Rather, the statement articulates in non-technical terms a few select principles that could improve the conduct or interpretation of quantitative science, according to widespread consensus in the statistical community.

What is a p-value?

Informally a p-value is the probability under a specified statistical model that a statistical summary of the data (for example, the sample mean difference between two compared groups) would be equal to or more extreme than its observed value.

Six principles of p-value:

1. P-values can indicate how incompatible the data are with a specified statistical model.

A p-value provides one approach to summarizing the incompatibility between a particular set of data and a proposed model for the data. The most common context is a model, constructed under a set of assumptions, together with a so-called “null hypothesis.” Often the null hypothesis postulates the absence of an effect, such as no difference between two groups, or the absence of a relationship between a factor and an outcome. The smaller the p-value, the greater the statistical incompatibility of the data with the null hypothesis, if the underlying assumptions used to calculate the p-value hold. This incompatibility can be interpreted as casting doubt on or providing evidence against the null hypothesis or the underlying assumptions

2. P-values do not measure the probability that the studied hypothesis is true, or the probability that the data were produced by random chance alone.

Researchers often wish to turn a p-value into a statement about the truth of a null hypothesis, or about the probability that random chance produced the observed data. The p-value is neither. It is a statement about data in relation to a specified hypothetical explanation, and is not a statement about the explanation itself.

3. Scientific conclusions and business or policy decisions should not be based only on whether a p-value passes a specific threshold.

Practices that reduce data analysis or scientific inference to mechanical “bright-line” rules (such as “p < 0.05”) for justifying scientific claims or conclusions can lead to erroneous beliefs and poor decision-making. A conclusion does not immediately become “true” on one side of the divide and “false” on the other. Researchers should bring many contextual factors into play to derive scientific inferences, including the design of a study, the quality of the measurements, the external evidence for the phenomenon under study, and the validity of assumptions that underlie the data analysis. Pragmatic considerations often require binary, “yes-no” decisions, but this does not mean that p-values alone can ensure that a decision is correct or incorrect. The widespread use of “statistical significance” (generally interpreted as “p ≤ 0.05”) as a license for making a claim of a scientific finding (or implied truth) leads to considerable distortion of the scientific process.

4. Proper inference requires full reporting and transparency.

P-values and related analyses should not be reported selectively. Conducting multiple analyses of the data and reporting only those with certain p-values (typically those passing a significance threshold) renders the reported p-values essentially uninterpretable. Cherry-picking promising findings, also known by such terms as data dredging, significance chasing, significance questing, selective inference and “p-hacking,” leads to a spurious excess of statistically significant results in the published literature and should be vigorously avoided. One need not formally carry out multiple statistical tests for this problem to arise: Whenever a researcher chooses what to present based on statistical results, valid interpretation of those results is severely compromised if the reader is not informed of the choice and its basis. Researchers should disclose the number of hypotheses explored during the study, all data collection decisions, all statistical analyses conducted and all p-values computed. Valid scientific conclusions based on p-values and related statistics cannot be drawn without at least knowing how many and which analyses were conducted, and how those analyses (including p-values) were selected for reporting.

5. A p-value, or statistical significance, does not measure the size of an effect or the importance of a result.

Statistical significance is not equivalent to scientific, human, or economic significance. Smaller p-values do not necessarily imply the presence of larger or more important effects, and larger p values do not imply a lack of importance or even lack of effect. Any effect, no matter how tiny, can produce a small p-value if the sample size or measurement precision is high enough, and large effects may produce unimpressive p-values if the sample size is small or measurements are imprecise. Similarly, identical estimated effects will have different p-values if the precision of the estimates differs.

6. By itself, a p-value does not provide a good measure of evidence regarding a model or hypothesis.

Researchers should recognize that a p-value without context or other evidence provides limited information. For example, a p-value near 0.05 taken by itself offers only weak evidence against the null hypothesis. Likewise, a relatively large p-value does not imply evidence in favor of the null hypothesis; many other hypotheses may be equally or more consistent with the observed data. For these reasons, data analysis should not end with the calculation of a p-value when other approaches are appropriate and feasible.

Other approaches

In view of the prevalent misuses of and misconceptions concerning p-values, some statisticians prefer to supplement or even replace p-values with other approaches. These include methods that emphasize estimation over testing, such as confidence, credibility, or prediction intervals; Bayesian methods; alternative measures of evidence, such as likelihood ratios or Bayes Factors; and other approaches such as decision-theoretic modeling and false discovery rates. All these measures and approaches rely on further assumptions, but they may more directly address the size of an effect (and its associated uncertainty) or whether the hypothesis is correct.

Conclusion

Good statistical practice, as an essential component of good scientific practice, emphasizes principles of good study design and conduct, a variety of numerical and graphical summaries of data, understanding of the phenomenon under study, interpretation of results in context, complete reporting and proper logical and quantitative understanding of what data summaries mean. No single index should substitute for scientific reasoning.

Nepal earthquake

2016-08-21T21:05:00.000-07:00

One year since the Great Gorkha earthquake

It is nearly a year since the catastrophic 7.8 magnitude earthquake struck Barpak, Gorkha. The massive earthquake on 25 April 2015 at 11:56 AM and subsequent aftershocks (two powerful 6.7 magnitude on 26 April and 7.3 magnitude on 12 May) caused widespread damage to lives and properties. About 9,000 were dead and 22,000 injured. Around 602,257 and 285,099 private houses were fully and partially damaged, respectively, forcing thousands of people to seek temporary shelter under tents and tarpaulin sheets.

It was a natural disaster most were expecting, but the government and households were awfully unprepared— the government either had lax household and settlement policies, or/and did not enforce housing codes strictly; the households (mostly in urban areas) compromised safety standards to save money. Lessons were learnt or so the politicians, bureaucrats and the public said during the first few months of the disaster. Then the simple lessons inculcated only after a terrible tragedy evaporated in thin air as politicians paid lip service only, bureaucracy got mired in the usual maze infested with rent-seeking mentality, and the affected households did what they need to do to get by normal lives (by starting rebuilding houses on their own). It’s a sad story about reconstruction that did not happen even after a year into the disaster. Availability of funds was not a problem given the generous aid pledges during reconstruction conference.

First, a quick snapshot of the ev
ents thus far: A post disaster needs assessment (PDNA) was completed within two month. It estimated the cumulative damage and loss to be about $7.1 billion (33.3% of FY 2015 GDP). The cumulative need for recovery (Building Back Better concept) was estimated to be $6.7 billion, of which almost half was needed for housing and settlement. The earthquake either destroyed or damaged cultural heritage, schools, health posts, houses, agricultural farms, irrigation system, financial sector infrastructure, communications, roads, hydroelectricity plants, livelihoods, and tourism infrastructure, among others.

After the completion of PDNA, the government organized International Conference on Nepal’s Reconstruction (ICNR) on 25 June 2015 to raise funds for reconstruction. Bilateral and multilateral development partners made generous pledges to help the affected households get back on feet again. About $4 billion, which was larger than the estimated public sector needs, was pledged with a belief that the government would speed up the establishment of reconstruction authority and make it operational without delay. The initial expectation was that some form of relief would be distributed before the winter. This was to be followed by cash grant of about $2000 to rebuild destroyed houses so that some of the damaged houses could be rebuilt before the arrival of monsoon (June to September 2016). Then the expectation was that the government would plan resettlement where required and build back better the damaged infrastructure, which would help reinvigorate the economy, create employment opportunities and prepare the household better when the next disaster strikes (Nepal is in a seismically active zone). Alas, these remained unrealized expectations. More on this in a minute.

Briefly,

Total damage estimated at $7.1 billion. Total recovery needs estimated at $6.7 billion.
Total reconstruction aid pledged by bilateral and multilateral donors was around $4 billion.
About 9,000 dead and 22,000 injured.
About 602,257 and 285,099 private houses were fully and partially damaged, respectively.
About 2,673 and 3,757 public buildings were fully and partially damaged, respectively.
Earthquake struck in the tenth month of FY 2015. The earthquake chopped 1.5 percentage points off an estimated 4.6% growth in FY 2015 in a no-earthquake scenario. GDP growth and per capita GDP estimated at 3.0% and $762 in FY 2015. Services sector was hit the hardest.
An additional 700,000-982,000 people were pushed below the poverty line. This translates into an additional 2.5%-3.5% of the estimated population in 2015 pushed into poverty compared to the no-earthquake baseline scenario of about 21%. About 50%-70% are from rural central hills and mountains, where the vulnerability prior to the earthquake was already high.
An ordinance was promulgated to establish National Reconstruction Authority (NRA) and to start reconstruction activities.
The FY 2016 budget and monetary policy were focused on rehabilitation and reconstruction. About $910 million (3.8% of GDP) was earmarked for reconstruction related work ($740 million for the NRA and $170 million to be spent through sector ministries during the interim period, i.e. till the NRA was operational).
The FY 2016 budget included NRs. 200,000 (about $2000) for each household that has lost its house due to the earthquake. To address the shortage of labor for reconstruction, skill training is planned for 50,000 people in the areas of masonry, plumbing, and electrical works.

Now, nearly a year since the earthquake, the progress is rather disappointing. Few points:

The political wrangle between CPN-UML and NC to appoint the CEO of NRA delayed the passage of the NRA bill. During the NC’s time in the government (coalition with CPN-UML) it had appointed a CEO. However, when the CPN-UML led the coalition government, it demanded that a new CEO be appointed. The disagreement over this persisted for about two months. Finally, after eight months the NRA bill was passed (creating too many committees and layers within it) and a new CEO was appointed.
The NPC handled the work of the NRA while the political infighting was ongoing. It approved many programs, which the NRA has asked ministries to get them approved again.
The NRA is struggling to get things done on time. Even the Prime Minister, who himself chairs the executive committee within NRA, has come down heavily on the NRA for its snail pace work.
The NRA is not getting enough human resources and coordination from the bureaucracy to start the preliminary program, especially identification of victims and distribution of cash grant for house reconstruction. Senior bureaucrats have shown strong disinclination to transfer to NRA.
At the local level, the political parties are trying to usurp the cash distribution process by demanding representation in local committees, under whose recommendation victims are to be identified. This is for the sake of “ownership”. There are also cases of inflated number of victims (dummy victims).
The CEO is not taking decisive action despite having unparalleled powers as per the NRA Act. Seeking the presence of political leaders for cash distribution in far off villages is not logical. In one case, cash distribution was delayed because some political leaders were not available.
The earthquake affected households have been expecting the promised cash grant for housing for almost a year now. About five months of supplies disruption has not only escalated prices of housing materials, but also created severe shortage of essential supplies in the market. The raw materials used for constructing the houses are in short supply and those that are available are sold at inflated prices. In this respect, the earthquake affected households are even requesting the government to build the houses instead of grant. They are willing to contribute labor for such reconstruction. See this and this episode of BBC Sajha Sawal.
The trade blockade/supplies disruption negatively affected reconstruction planning and works. Its impact will linger on till the supplies and prices normalize to previous levels.
There is inadequate coordination among I/NGOs for relief distribution. Affected households are complaining of similar goods (blankets and tarpaulin sheets, etc) being distributed by many I/NGOs. And distribution is centered in some places only. The NRA has to coordinate this in the strict sense.
Reconstruction hasn’t started. Even a consolidated planning for reconstruction is not done yet.
There is a possibility that the NRA won’t be able to utilize all the funds pledged during the ICNR last year. The more delay in utilizing the funds, the higher the changes of it being restructured for use in other purposes.

The lingering impact of damages caused by the earthquake and supplies disruption will suppress potential growth and employment opportunities.

GDP growth in FY 2016 was initially projected on the higher side because of the expectation of speedy cash distribution and initiation of reconstruction projects. This impact of the trade blockade for about five months and the delayed reconstruction activities will depress growth prospects in FY 2016 and beyond. The agricultural output forecast is also disappointing. Some households in the earthquake affected districts have not cultivated their fields due to the uncertainty over housing.
Inflation will also continue to be at elevated levels, primarily due to the lingering impact of the supplies disruption.
There is a slowdown in the rate of overseas migration because of the cooling of demand for workers in GCC (this in turn is due to the continued low oil prices). Malaysia is implementing measures to discourage foreign workers and is also levying extra taxes on income. This means a slowdown in migration rate and ultimately deceleration of remittance inflows. It will increase the number of unemployed youths in the economy and also put pressure on external sector stability. Current account surplus will decline and if imports rebounds to normal levels, then it may as well be negative.
Rehabilitation and reconstruction should primarily aim at increasing productivity-enhancing public capital investment. This is a key to ensuring structural transformation whereby high value-added and high-productivity sectors are more dominant than low value-added and low-productivity sectors in the medium term. Promoting agribusiness, industrial capacity, innovation and high-productivity services need to be at the center of such a reconstruction and structural transformation strategy. In addition to higher investment, this will require reforms on institutional, legal, regulatory, and capacity enhancement fronts.

Overall, the earthquake, the severe supplies disruption and the delay in starting reconstruction projects do not bode well for the economy. It a combination of misplaced politics, ineffective bureaucracy and a lost NRA (which will try to accelerate processes in the next two weeks to show that things are moving ahead despite it being slow-- a common escape argument popular in the bureaucracy!)

Key economic achievements Nepal

2016-08-21T20:56:00.000-07:00

Key economic achievements under late PM Sushil Koirala

Former Prime Minister and President of Nepali Congress (NC) party, Sushil Koirala passed away yesterday at the age of 78. He was known for a simple lifestyle and a clean career. Here are the key economic achievements during his tenure:

Landmark power development agreements (PDA) was singed for 900MW Upper Karnali and 900MW Arun-3 hydroelectric projects worth over $2 billion
Power Trade Agreement (PTA) was signed with India
18th SAARC summit was successfully organized with agreements on vehicle movement and energy cooperation, among others.
6,720MW Pancheswar Multipurpose Project got some momentum
Presided over the successful completion of post-disaster needs assessment
Successfully organized the International Conference on Nepal's Reconstruction in March 2015 Donors committed about $4 billion for Nepal's post-earthquake reconstruction
Successfully concluded the political transition with the promulgation of a new constitution in September 2015
FDI commitment of about $2.7 billion in FY2015
A Public Private Partnership (PPP) Policy was approved
Put in good and able technocrats/policymakers at key bodies such as National Planning Commission

On the economics front, he will be remembered most for
helping to lay groundwork for major investment projects and reform measures. That is quite an achievement in itself (even if the results are not quick) given the relative performance under the leadership of previous premiers. The April 2015 earthquake and subsequent aftershocks, plus the trade blockade (for four and a half month) dented growth prospects and inflicted immeasurable hardship to common folks, but these were beyond Koirala's power. With the lifting of the blockade at the borders, lets hope that economic recovery will be fast (and that the government and bureaucrats will work faster than before for that).

For now, lets thank the former PM for his decades long service to the nation and for presiding over one of the most scandal-free governments. RIP.

Pic courtesy: Republica

The root of energy crisis (deficit) in Nepal

2016-08-21T20:50:00.000-07:00

Ambition without vision
Painful and drastic reforms are needed in the NEA and NOC to realise energy goals

The economic devastation caused by the April 2015 earthquake and trade blockade for about four months have reignited discussion over production and import diversification, and economic self-sufficiency. It has become a hot topic among politicians, talking heads, opinion makers and the public in general. Ministers are making bold statements about self-sufficiency. Prime Minister KP Oil even promised that his government will end load-shedding within one year and connect every household to gas pipelines.

As events unfold and experts debate on its possibility, it appears this will likely be an ambition without a vision and a good homework, mainly due to the lack of willingness to overhaul management, jurisdiction and operations of Nepal Electricity Authority (NEA) and Nepal Oil Corporation (NOC).

Binding constraint

The most binding constraint to economic growth is the inadequate supply of infrastructure, especially electricity. This is not only stymieing industrial activities, but also leading to an increase imported fuel, which is widely used by small and medium enterprises to sustain their operations even if they have to incur higher costs. Fuel import accounts for about 20% of total imports (about $1 billion annually) and is larger than the total value of merchandise exports. The cost of production using imported fuel- procured and distributed through Nepal Oil Corporation (NOC) -
is expensive relative to hydroelectricity and hence the prices of goods and services in the market are also relatively higher compared to other comparable cities around the world.

Against this backdrop, the biggest policy bang for a buck lies in accelerating electricity generation— both hydro power and alternative sources such as solar and wind— to meet demand. It will not only reduces demand for imported fuel, but also increases fiscal revenues, economic growth and new jobs. However, over the past 100 plus years very little has been achieved due to the politicization of the entire sector (Pharping hydro power started generating electricity on 22 May 1911).

Without a complete overhaul of management, financial and operational efficiency of NEA and NOC, energy self-sufficiency would continue to remain a distant dream. Despite all the promises, politicians have shown little credible interest in overhauling these two public enterprises as it cuts across party lobbyists, unions, syndicates, employment for cronies, and periodic financial bonanza.

Inefficient institutions

The NEA and the NOC more or less solely procure and sell electricity and fuel, respectively. They are operating without competitors and dictating quantity purchased from suppliers on their own. It leaves a huge space for financial and distribution malgovernance— often with the tacit support of politicians and lobbyists.

Both the public enterprises are financially bankrupt. The NEA’s operating loss amounted to about 0.4% of GDP in FY2015. About Rs27 billion outstanding debt was written-off in FY2012 to make it financially viable and to make it worthy for investor’s consideration. However, it continues to accumulate losses as electricity prices are not adjusted to reflect cost of production or purchase. Meantime, little has been done to reduce technical losses, one of the highest in the world. Total peak time supply is barely 55% of total demand, leading to load-shedding of between 12 and 16 hours a day (contingent upon the level import from India).

The NOC is in a more perilous state as it has no long term investment assets to bank on for revenues. The management and distribution inefficiency, and mismatch between buying and selling prices of fuel and gas have turned NOC into an infamously inefficient public enterprise. In FY2014, its losses amounted to about 0.4% of GDP as domestic fuel and gas prices were kept low despite high international prices. With low fuel prices internationally for over a year and reluctant downward adjustment of domestic fuel prices, it is in a much better shape now. Although its accumulated debt amounts to about 1.12% of GDP, it nevertheless is planning to distribute bonus earned from the revenues generated by charging high prices to consumers (with the commitment to cover past losses).

Hollow commitment

Any political commitment or speech on reforming these two public enterprises is an additional political capital for parties, and they have not shied away from capitalizing on that. For instance, during the second Constituent Assembly election, Nepali Congress promised to generate 5,000 MW of electricity within five years and achieve economic growth of 8-10%. UML promised to complete all major hydropower projects (both storage and run-of-the-river types) within 10 years by involving the private sector and also end load-shedding in five years. Meanwhile, the UCPN-M promised to end load-shedding in three years and develop 10,000 MW, 20,000 MW and 25,000 MW in the 10, 20, and 40 years respectively.

Lately, the government has been promising to end load-shedding within a year (mostly by importing from India) and generate 10,000 MW within ten years by declaring an energy emergency (similar one came in 2008 as well followed by a Ten Year Hydropower Development Plan in 2009). Also, the government has allowed the private sector to procure and distribute fuel, technically breaking the monopoly of NOC.

Painful reforms

A lot of painful drastic reforms are needed to realize even a fraction of these promises. Unfortunately, the political parties are not up to the speed and have been unwilling to forgo representing the special interest groups. This has been the main reason behind the delay in cost evaluation of projects, prolonged and contentious procurement (the earlier energy minister even snatched regular management jurisdiction of NEA to her ministry’s chamber), and trading of generation licenses. The politically-affiliated unions at the NEA and affiliates in districts are further complicating the situation by demanding unjustified compensation and shares. Similarly, the NOC has been a plump earning source for unscrupulous traders and political affiliates.

The bureaucracy is more hesitant than before to complete procurement and necessary project clearances on time. There is delay in constructing transmission lines and signing power purchase agreements, which has been put on hold on the misguided belief that the country will have surplus power during wet season from FY2018. The demand for electricity is never linear in an energy-hungry country like Nepal. Electricity acts as an alternative source of energy to fuel and is convenient as well as relatively cheap. Hence, immediately after the fuel blockade, the demand for electricity was so high that the NEA’s transformers exploded. The actual latent demand for electricity is much higher than the one estimated by the NEA.

Painful reforms are needed to reform these two public enterprise and the sectors they represent. To avoid irregularities, discretionary power of ministry and management should be minimized and a rule-based system (breaking up production, transmission and distribution aspects), inscribed in an Act, should be enacted. This means overhauling procurement processes, requirements for preliminary project assessment, inter-ministry and inter-department coordination, efficient and responsible human resources, and politics free decision-making and operations. Unfortunately, it is easier said than done.

It was published in The Kathmandu Post on 15 February 2016

Quick thoughts on Nepal budget

2016-08-21T20:41:00.000-07:00

Here is my quick thought on the FY2017 budget.

Finance Minister Bishnu Prasad Poudel presented budget for FY 2017 (mid-July 2016 to mid-July 2017) to the parliament on May 29. The budget is focused on distributive programs, post-earthquake reconstruction and measures to diversify the economy through the provision of critical infrastructure (preliminary funds earmarked for key priority projects for preparatory work).

The budget is kind of unique in two ways: (i) a massive increase in spending targets with the inclusion of pet programs/projects that will have budgetary and macroeconomic consequences for years to come, and (ii) there is no notable plan to accelerate capital spending (without which the promises will remain a daydream).

FY2017 budget overview
GDP growth target (%)	6.5
Inflation target (%)	7.5
Budget allocation for FY2017	FY2017BE
	Rs billion	%
Budget allocation	1048.9
Recurrent	617.2	58.8
Capital	311.9	29.7
Financial provision	119.8	11.4

Projected total revenue	682.8
Revenue	565.9	82.9
Foreign grants	106.9	15.7
Principal repayment	10.0	1.5

Projected budget surplus (+)/deficit (-)	-366.1

Projected deficit financing	366.1
Foreign loans	195.7	53.5
Domestic borrowing	111.0	30.3
FY2016 cash balance	59.4	16.2

First, the budget outlay:

The total expenditure outlay for FY2017 is NRs1048 billion (an estimated 39.5% of GDP), which is 28.1% higher than the budget estimate for FY2016. The FY2017 outlay comprises NRs617.2 billion for recurrent expenditures (58.8% of the total outlay), NRs311.9 billion for capital expenditures (29.7%), and NRs119.8 billion for financial provision (11.4%).

The substantially larger size of the budget is due the large increase in recurrent and capital spending. The outlay for recurrent expenditure (equivalent to 23.3% of GDP) is 42.2% higher than the revised estimated expenditure in FY2016. The planned capital spending has been increased by 96.1% over the FY2016 revised estimate (equivalent to 11.8% of GDP; normally actual capital spending is about 4.0% of GDP). About Rs140 billion is set aside for post-earthquake rehabilitation and reconstruction.

Second, revenue targets:

A total revenue target of NRs682.8 billion (25.7% of GDP) has been set for FY2017, including projected foreign grants of NRs106.9 billion (4.0% of GDP) and principal repayment of NRs10 billion. The revised estimate for revenue mobilization (including grants) in FY2016 was 23.5% of GDP.

Third, deficit financing:

The budget deficit is to be financed by foreign loans amounting to NRs195.7 billion, domestic borrowing of NRs111.0 billion, and FY2016 cash balance of NRs59.4 billion. Net foreign loans and net domestic borrowings are projected to be 6.4% and 3.5% of GDP, respectively. Overall, budget deficit is projected to be about 7.0% of GDP.

Fourth, where is the recurrent budget going?

Almost 43% of planned recurrent expenditure of NRs617.2 billion is going to local bodies as grants (or transfers) to enable them to launch local level development works on their own (this is where pet projects and politically hinged programs are hidden). The other big ticket item is the compensation of employees, which takes up about 21% of total recurrent budget. These amount to an estimated 9.9% and 5.0% of GDP respectively.

Fifth, where is the capital budget going?

Almost 58% of the planned capital budget of NRs311.8 billion is going for civil works. About 29% is allocated for building work. These amount to an estimated 6.8% and 3.4% of GDP, respectively.

Sixth, the main takeaways from FY2017 budget are:

The early budget adhering to the constitutional provision is a good start.
The increase in capital budget for reconstruction and other infrastructure related work was as expected. It is a good strategy because the capital budget allocation itself was low given the huge infrastructure deficit the country is facing (then there is a chronic issue of low absorption capacity).
Unfortunately, the expectation of a robust, credible and a time-bound implementation plan to spend the allocated money is missing. This issue should have been kept above mundane political pet projects and programs. It is not unique to this government.
The GDP growth target may be achievable/ambitious (between 5% and 6% is within range if budget execution is above expectation) given the improving monsoon, normalization of supplies (which reinvigorates the services sector), planned spending on rehabilitation and reconstruction (acts as temporary fiscal stimulus), and most importantly the low base effect. But, the downside risks might weigh heavy if reforms and implementation of projects lag behind. Realistically, GDP growth may be between 4% and 5%.
The inflation target is very conservative because: (i) the increase in salary of public sector employees will heighten inflationary expectation, which will eventually result in upward pressure on prices of goods and services; (ii) the massive size of the budget itself (especially the distributive programs) will have similar effect (becomes a self-fulfilling prophesy); (iii) the increased demand for reconstruction related intermediate and final goods and services will put upward pressure on prices (given that domestic firms' capacity utilization is below 50% at present); (iv) the expected strikes are going to temporarily escalate prices; and (v) the new levy on petrol, diesel and aviation fuel (on top of the already high tariff) will put pressure on general prices of goods and services (note that diesel is still used to power up generators to run SMEs- a better option would have been to raise excise duty without increasing the final price like it was done in India and several other countries, especially when international prices are low.). These are both demand-side and supply-side factors that are not within the usual bound of the central bank. Let us wait for the NRB’s inflation target for FY2017 (I hope it will be a bit realistic).
The new petroleum levy is intended for the Budhigandaki hydroelectricity project. The initiation of the huge reservoir type project is a good move, but the financing arrangement for it is very myopic. Inflation is already at high levels (thanks to supplies disruptions caused mostly by the trade blockade) and the massive increase in spending and hike in public sector salaries will put even higher pressures. The resources for the project should have been found by rationalizing recurrent spending together with issuance of construction bonds (as is the practice elsewhere). These two measures ensure relatively more accountability and do not disrupt market sentiment when compared to the new levy on petroleum fuel. The financing mechanism for the project economically does not look good to me. By the way, the government is already levying, on an average, the following tax rates (share of retail price): 35.4% in petrol/liter, 22.7% in diesel/liter; 7.9% in kerosene/liter; 26.2%/liter in ATF; and 18.4% in LPG/cylinder (these are tariff, VAT and excise duties as well as infrastructure development levy).
Macroeconomy-wise, it looks like a mess: (i) an expenditure target the country cannot attain, especially the capital budget, and a bloated recurrent spending; (ii) an ambitious revenue target of about 20% annual growth; (iii) a massive increase in net domestic borrowing to about 3.5% of GDP (this is hitting its prudential limit now); (iv) a massive increase in net foreign loans (6.4% of GDP, up from 1.6% of GDP in FY2016); (v) an increase in inflation beyond 10%; and (iv) a surge in interest rates due to high borrowing (compounded by the resumption of normal banking activities, which will drastically lower the existing excess liquidity).

The large increase in net foreign loans to finance reconstruction and other infrastructure related work is an indication of the dearth of domestic resources to sustain such large scale infrastructure projects and reconstruction work. Here is more.
Notice that the budgetary estimate of foreign grants for FY2017 is lower than the FY2016BE. It reflects the drying up of grants (given the poor absorption capacity and preference of large multilateral donors to shift to more loans).
Importantly, it will be challenging for the next government to implement the budget. The government will face two seemingly insurmountable challenges: (i) no uptick in absorption capacity as the means to achieve it are clearly lacking in the budget; and (ii) the possibility of drying up of excess liquidity as businesses get back to normal. The former will make it hard for the government to increase capital spending beyond existing level. The latter will make it difficult for the government to raise money from domestic market (plus what would happen if the revenue target won’t be met?). I don’t see notable contingency planning.
More importantly, the next government will find it hard to reconcile FY2018 numbers during the preparation of budget because that one will be based on FY2017 budget (or its revised estimate), which is bloated with too many incoherent, small program and projects (especially welfare and distributive ones) that can’t be discontinued by successive governments. This year’s budget itself is on the highly optimistic side as the revised expenditure for FY2016 is simply unrealistic given the progress so far. If FY2018 budget is going to be larger than FY2017’s (which in all likelihood will be), then it will be challenging to find extra resources. It cannot increase spending at existing rate (especially unproductive recurrent spending). The tax revenue is not even sufficient to finance recurrent spending. FY2017’s planned recurrent spending is higher than the entire FY2015 budget.

finance infrastructure in Nepal

2016-08-21T20:21:00.000-07:00

It was published in The Kathmandu Post, 19 July 2016.

Financing infrastructure

Prime Minister KP Oli led government surprised everyone few weeks ago by proposing to initiate key large-scale infrastructure projects, including the much-touted fast track road and Budhigandaki hydroelectricity projects, using domestic resources. The intention was to stoke a renewed sense of nationalism high on rhetoric but low in substance, and to extricate the government from binding hooks that come with bilateral financing of such projects. One unruly leftist party even fervently argued for financing all hydro power projects with domestic resources and floated a premature idea to raise money from local shareholders.

Some politically aligned experts are throwing their weight behind such half-baked proposal without properly analyzing the available financial and knowledge capacities. As it stand now, the economy simply does not have the required financial capacities, stock of knowledge and management capabilities, and competent institutions to initiate large-scale projects entirely on domestic resources. Acquiring such capability requires close collaboration on financing, research and management between external and domestic sources.

Unfavorable macro

Politicians and their intellectual
cheerleaders quickly point to low public debt (in other words fiscal space) to finance large-scale infrastructure projects such as hydroelectricity, roads and airports domestically. The outstanding public debt has decreased sharply from about 52 percent of gross domestic product (GDP) in 2005 to around 25.7 percent of GDP. It means Nepal could theoretically borrow more without jeopardizing fiscal stability (say up to 40 percent of GDP). However, borrowing an additional $3.5 billion or more from domestic and external sources requires the government to drastically enhance its absorption capacity, which unfortunately is eroding.

The outstanding domestic borrowing by selling government bills and bonds amounts to 9.5 percent of GDP and external borrowing, mostly on concessional terms, 16.2 percent of GDP. The government is predominantly selling treasury bills (with maturity of less than one year) to finance recurrent spending as well as multi-year infrastructure projects, and implicitly to manage excess liquidity. This is not a good fiscal practice as large-scale infrastructure projects are financed typically by issuing specific construction bonds, which have long-term maturity and lower risk of asset-liability mismatch. Higher domestic borrowing to fulfill politicians’ whims will crowd out private investment by pushing up interest rates and put unnecessary debt burden on future generation. The FY2017 budget falls in this category.

The use of excess liquidity and treasury savings are identified as alternative sources that could be tapped in to finance infrastructure projects. The persistent excess liquidity is the result of higher growth of deposit compared to the growth of credit. It arises when there is lack of investment-ready projects and unfavorable investment climate, thus constraining banks and financial institutions’ (BFI) capacity to increase credit. Meanwhile, the large growth of deposit is due to the increasing remittance inflows and the government’s inability to spend allocated capital budget on time. While the former is starting to slowdown as the demand for the migrant workers is decreasing, the latter is expected to improve due to relatively better budget execution from this year onward. Transient and volatile excess liquidity and treasury savings cannot be reliable sources for long-term infrastructure financing.

Another related argument on the adequacy of domestic resources is the potential to pool in savings. This argument has its roots in the remittance-backed large deposit growth and oversubscription of shares in the stock market. First, the remittance-backed savings are of short term in nature and using them to invest in projects with long gestation lags create asset-liability mismatch for the BFIs. This is one of the reasons why the BFIs as well as pension funds are financing medium to long term projects through a consortium, which minimizes risk arising from overexpose to one sector. Second, the oversubscription during share issuance is essentially to reap quick profits by trading the shares in the secondary market. This quest for short-term gain does not indicate that there is excess long term saving that could be used for multi-year large-scale infrastructure projects. Nepal’s financial system is not yet mature enough for that.

Regarding external financing, the government won’t be able to drastically increase borrowing because it directly depends on absorption capacity, which stands at a mere 75 percent of budgeted capital spending. Frustration is already running high among Nepal’s key multilateral and bilateral donors owing to the government’s inability to timely use the committed grants and loans. Furthermore, concessional lending from multilateral donors might be drying up. The Asian Development Bank and the World Bank are gradually phasing out concessional lending, which means Nepal might have to borrow at a rate between concessional and nonconcessional terms. The bilateral donors may not be as generous as the multilateral donors as they usually insert binding hooks on procurement and the utilization of funds.

About domestic resources and infrastructure financing in Nepal

2016-08-21T06:22:00.000-07:00

About domestic resources and infrastructure financing in Nepal

There has been a lot of debate about the use of domestic funds to finance large-scale infrastructure projects, especially hydroelectricity, roads and airports. Let me provide a brief background and readers can see for themselves which claims made by ‘experts’ hold water and which ones are impractical and outlandish.

First, issue about fiscal space to finance large scale projects. Nepal has a very low outstanding public debt (about 25.6% of GDP), with internal and external debt stock amounting to 9.5% and 16.1% of GDP, respectively. The outstanding public debt decreased drastically from about 52% of GDP in FY 2005. This was a result of faster repayment of principal and interest (due to high revenue growth rate but eroding low expenditure capacity). Now, given the huge infrastructure deficit and low per ca-pita income, Nepal can afford to increase it by few percentage points and use those money in productivity-enhancing infrastructure projects. Here is brief study on increasing public debt by 10 percentage points to finance post-earthquake reconstruction without jeopardizing fiscal sustainability (that is, maintaining the present level of primary balance).

To increase this limit further needs attention on two fronts: (i) a higher growth rate (ideally above 5%), concessional nature of external borrowing and higher remittance-financed imports, which then boosts revenue; and (ii) drastic enhancement of absorption capacity.

On the first point, no comment on growth rate as we know well what drives it in Nepal. But, the concessional financing may be drying up. The ADB is phasing out concessional lending in few years and Nepal may have to borrow at a rate between concessional rate (for low income countries) and non concessional rates (for lower to middle income countries). The WB is also moving in the same direction. AIIB financing may not be as concessional as those from the ADB and the WB. We will have to wait and see that one. Bilateral financing may or may not be equally generous in terms of interest and maturity, but the downside is that there are hooks on procurement and utilization of funds.

On remittance-financed imports, remittance inflows may not be as stable as before given the continued slump in oil prices and fiscal strain in the countries where Nepali workers go for employment. Remittance inflow is already decelerating, i.e. its growth rate is decreasing although the amount is rising.

On the second point, without drastic enhancement of absorption capacity, even concessional financing won’t come (disbursement happens after government spends money, submits the bills or details of spending to donors and then gets reimbursed). And it is no secret that spending absorption capacity is receding in the last couple of years. So, yes POTENTIAL financing options are available, but REALIZING it is an entirely different ball game. It is not as simple as it sounds.

What about domestic financing (from treasury savings), domestic borrowing and using some Forex reserves? Again, utilizing these is linked to macroeconomic balance and fiscal space. Given the occasional fiscal surplus (even primary balance is in surplus) the government can afford to run fiscal deficit IF the additional money is used in productivity-enhancing infrastructure projects in an accelerated manner. This is more and more unlikely given the receding disbursement rates of major projects and the usual legal, institutional and political hiccups overpowering project implementation.

A lot of folks are also talking about pooling in the liquidity in the market and household savings apart from those in the banks (as seen when several IPOs being oversubscribed in recent years) to generate funds for large-scale infrastructure projects. But then this liquidity is transitory because of the adverse market conditions. Domestic financing will quickly dry up as soon as real estate and trading activities regain momentum, and BFIs see a favorable credit demand with less socio-political risk. Another aspect associated with this is the domestic borrowing by government through the selling of bills and bonds. This cannot be extended beyond 2-2.5% of GDP to maintain fiscal stability. This is already being practiced (as the government targets to raise around Rs. 50 billion annually). Higher domestic borrowing by government will push up lending rates (not good for private sector and households as it stifles growth and then subsequently revenue and then finally the funds available for such projects—boomerang!).

Places To Visit Before You Die

2016-08-21T06:09:00.000-07:00

Places To Visit Before You Die ●

Places To Visit Before You Die: The Capital Of Rhododendron

The Capital Of Rhododendron - Terhathum District, Nepal

Rhododendron is the national flower of Nepal. The capital of Rhododendron is located in eastern terhathum district of Nepal. It covers around 30 kilometres forest areas of Tinjure, Milke and Jaljale (TMJ). The forests are covered in such an abundance of rhododendron shrubs that they house 28 of
the 32 species of rhododendron found in Nepal.

When the rhododendron bushes begin to flower (sometimes between April and May), the TMJ route becomes one of the most breathtaking in the country. The entire ridge—from Basantapur to Jaljale—appears red, with sporadic patches of white, pink and purple; as if the forest itself were a rich carpet of red, weaved by a master craftsman. Those who take the TMJ route during the season might also find themselves lucky enough to get up-close views of the Makalu, Kanchanjunga and Everest mountains. When the weather’s clear, these mountains greet trekkers majestically, standing tall and mighty.

The TMJ trek is probably the country’s easiest route. There are no uphill climbs here, no extreme weather. There is no need to travel with food and equipment here; provisions and lodging are easily found, and the route itself is quite easy to access.

Trekkers can take a bus to Khandbari from Dharan. The actual TMJ route starts from Deurali, one stop further from Basantapur in Tehrathum district. Cars are available on hire to be taken up to Bhalukhop, from where a two 2-hour walk will get you to Gufapokhari—a spectacular pond of religious significance which lies at an altitude of 3000 m, on the way to Milke and Jaljale. If the weather permits, trekkers might even see the reflection of Mt Makalu upon the water’s surface.

An alternative route will take you to Tumlingtar, Taplejung from Kathmandu via aeroplane. From Tumlingtar, you can take the road to Chauki. While this might definitely seem like the easier option for many, you will be leaving behind the Tinjure hill (situated at an altitude of 3000 m, and offering a panoramic view of the Makalu, Kanchanjunga and Everest mountains) in doing so. Locals say that onlookers can see as far as 12 districts of the east, and some parts of West Bengal from the hill in fine weather.

If you are entering from the Indian border via Siliguri-Kakarvitta route, you can take direct bus from Kakarvitta buspark to Deurali, Terhathum. If you miss that direct bus you can go to Dharan from there (some 3hrs ride) and further take the bus to Deurali, Terhathum (some 7-8 hrs distance). Deurali is one stop further from Basantapur.

●Bus Routes:
Route:1●Kakarvitta-Dharan-Bhedetar-Basantapur-Deurali,Terhathum
Route:2●Kathmandu-Itahari-Dharan-Basantapur-Deurali, Terhathum

●Air Route:
●Kathmandu-Tumlintar, Taplejung-Chauki (via Road)

Trekking In Nepal After Earthquake

2016-08-21T05:54:00.000-07:00

Tourism in Nepal

World famous trekking routes of Nepal are safe and open for all: Trekking in Nepal after earthquake

After April 25 and May 12 earthquake in Nepal, there has been lots of media coverage and speculation on possibility of trekking in Nepal after earthquake. Nepal is very rich in trekking destinations. World famous trekking routes are still operating with 0% damage and 100% safe. The below mentioned trekking destinations of Nepal do not fall under the earthquake hit zone and are fully operating.

Annapurna Base Camp Trekking aka ABC Trekking in Nepal after earthquake

One of the most famous trekking destinations of Nepal is ABC trekking. Lush green hills, scenic villages, local culture still in its original state, amazing view of mountains (no word can describe it). Most picturesque views. Experience the purest of nature. Click here for details.

Related trekking in Nepal after earthquake: Annapurna Circuit Trekking, Ghandrung Trek and Ghorepani Trek.

Upper Mustang Trekking in Nepal after earthquake

The forbidden Kingdom. The restricted area of Nepal. Kingdom on the other side of mountain. The last bastions of undisturbed Tibetan Culture in world. Opened to westerner only from 1992, Upper Mustang area holds its centuries old tibetan culture and unique nature for its guests. Click here for details

Other famous trekking destinations that are 100% safe are Helambu Trekking, Rolwaling Trekking and Rara Lake Trekking.

Lenovo Vibe Shot

2016-08-05T08:23:00.000-07:00

Lenovo Vibe Shot - Full Review, Specs and Price in Nepal!

Lenovo Vibe Shot

Lenovo has done an excellent job with the design and build of the phone.

PRICE: NPR 32,800 /-
● Release Date: June, 2015
● Display:

5.0" (1080 x 1920pixels)
●Front Camera: 8-Megapixel
●Main Camera:
16MP (1080p video) with Impressive lowlight performance
● RAM: 3GB ( Snapdragon 615 )
● Processor: 1.7 GHz Processor
● Internal Memory: 32 GB storage , microSD card slot
● Battery: 3000 mAh Li-Po Battery
● Android OS: version 5 . 0 . 2

Specifications and Software:
The Vibe Shot features typical mid-range specifications including an octa-core Qualcomm Snapdragon 615 SoC and 3GB of RAM. There's 32GB of onboard storage which can be
expanded by up to 128GB. You also get Wi-Fi b/g/n, Bluetooth 4.1, GPS, FM radio, GPS, and USB OTG. We would have liked to see Wi-Fi ac and NFC too considering this phone's
positioning, but sadly, they aren't present. Both SIM slots support 4G LTE.

Hands On Reveiw & Unboxing Video: Lenovo Vibe Shot - Unboxing & Hands
On

THE TRUTH ABOUT THE BERMUDA TRIANGLE

2016-08-04T08:47:00.000-07:00

THE BERMUDA TRIANGLE of world

With boundaries covering the Straits of Florida, the Bahamas, the entire Caribbean Islands area, and the Atlantic east to the Azores; the Bermuda Triangle is a region that has become known as the site of the disappearances of multiple ships and aircraft.

The Bermuda Triangle’s bad reputation started with Christopher Columbus. According to his log, on October 8, 1492, Columbus looked down at his compass and noticed that it was giving weird readings. He didn’t alert his crew at first, because having a compass that didn’t point to magnetic north may have sent the already on edge crew into a panic. This was probably a good decision considering three days later when Columbus simply spotted a strange light, the crew threatened to return to Spain.

The first recorded report of unusual activity in the Bermuda triangle area appeared in a September 16, 1950 Associated Press article that discussed the disappearance of Flight 19, a group of five U.S. Navy TBM Avenger Bombers that were running training exercises in the region. The author linked the area to many other disappearances in the past (we will get to them in a moment) and was the first to suggest supernatural elements to the Bermuda triangle mystery. An article published a few years later claimed that the squad leader of Flight 19 had been heard saying, “We are entering white water, nothing seems right. We don’t know where we are, the water is green, no white.”; it also claimed that Navy officials stated that the planes “flew off to Mars.”
Later reports and theories blamed the Bermuda triangle phenomenon on UFO abductions, magnetic anomalies, and interference from technology left behind by the lost city of Atlantis. Further reports throughout the years would link more and more lost ships and planes to the triangle, with only one problem arising…a little issue involving there being no proof of any sort of phenomenon. Oh wait, there was another problem, not all the incidents and disappearances happened in the triangle, or ever even happened at all. Oh man, sorry, there’s also the fact that a bunch of the incidents happened concurrently with weather conditions or activity that would easily explain them.

For example, reports were filed in relation to explosions seen during the exact time Flight 19 disappeared. We also have Theodosia Burr Alston, whose disappearance was blamed on her ship getting lost in the triangle , when in reality, most historians think her ship was sunk as part of an act related to the War of 1812, or have her moving to Texas! Or you could look at the Connemara IV, a ship that triangle theorists have getting lost at sea and being found devoid of crew; the likely truth is that it was found empty because hurricane winds blew it away from the dock before it could be manned. The sad truth for all you Bermuda triangle believers out there, is that statistics show that the area is responsible for no more loses than any other similar region of ocean in the world. For some reason, probably to sell newspapers, the entire mythos seems to be made up or embellished. There’s nothing mysterious about this one folks; the Bermuda Triangle is a hoax.

#Information N Knowledge Based #Science #Hoaxes #BermudaTriangle

Wellbeing of Women Team Kilimanjaro Reunited - Mount Toubkal Weekend Adventure Fix

2016-07-31T07:00:00.000-07:00

About 4 years ago I began to organise annual climbs of Kilimanjaro with friends and colleagues to raise money for the women's health charity, Wellbeing of Women. These climbs have not only raised over 100,000gbp for the charity, they've also led me to meet a huge number of incredibly inspiring men and women who I now call friends.

As we were descending from the upper slopes of Kilimanjaro

Nepal Vision

2016-07-26T03:53:00.000-07:00

This article is adapted from Nepal Economic Forum's 25th issue of Nefport.

Macroeconomic essentials for Nepal Vision 2030

Although a bit late, the government is finally gearing up to formulate a long-term vision for economic development. The tentative targets for now are to graduate from the Least Developed Country (LDC) status by 2022 and to attain the slew of Sustainable Development Goals by 2030. However, a bold and time-bound economic development vision for the country should go beyond these goalposts that were contextualized on the basis of global targets. Nepal should aim to become a vibrant lower-middle income economy within the next two decades.

At the core, it essentially means increasing gross national income (GNI) per capita (World Bank’s Atlas method) from existing USD 730 to about USD 4,125 (the threshold between lower-middle income and upper-middle income economy). In order to achieve such a goal, it is essential that the government draw up a list of strategic flagship projects in physical and social infrastructure sectors and execute them with an efficient and workable implementation arrangement that is in sharp departure from the current discouraging project implementation ecosystem.

Given an appropriate mix of macroeconomic strategy, financial arrangement, smart project execution and supportive institutions, a meaningful structural transformation is possible and the stated goals are achievable. This piece focuses on the macroeconomic aspect of marching on that path.

Macroeconomic essentials

A large amount of public and private investment is required to increase income per capita by almost six folds within two decades. The scale and scope of public investment would depend on revenue mobilization, rationalization of ballooning recurrent spending, and foreign aid. Meanwhile, private investment would depend on investor-friendly environment, including protection of investment and returns, supportive laws and policies, mechanisms for sharing of risk, returns and technology (such as public private partnerships), and maturity of the financial market, among others.

Overall, sound macroeconomic environment will be at the heart of financing for such large scale public and private investment. At around 21% of GDP, the gross fixed investment is lower than the average for low income countries. This needs to be over 30% of GDP to accelerate growth rate (beyond the contribution by exogenous factors such as monsoon and remittances), which will then boost income per capita, and employment generation, primarily through investment in productivity-enhancing physical and social infrastructure. Specifically, public fixed capital investment has to increase to about 10% of GDP over the next decade from the existing 4.5% of GDP.

On the financing part, a combination of rationalization of recurrent expenditure, higher domestic revenue, domestic borrowing, and higher grants as well as concessional and non-concessional loans are needed. At the current level and growth of recurrent expenditure, it will be challenging to cover it sustainably by tax revenue, whose growth rate has stagnated at around 15%. Hence, trimming wasteful recurrent spending in uncoordinated programs and projects should be a priority as a part of sound fiscal management to attain the long-term vision. Second, along with efforts to expand the tax base, the revenue administration will have to be made more efficient and responsive. The present revenue system is too dependent on taxes on remittance-financed imported goods and services. Third, domestic borrowing has to be managed judiciously keeping in mind the optimum market liquidity. Finally, foreign assistance needs to be better utilized by enhancing expenditure absorption capacity. These will partly cover the required resources for public sector investment.

Additionally, fiscal and monetary policies need to be synchronized to tame inflation so that it is not persistently and prohibitively high to discourage investment. At present, inflation is mostly a supply-side phenomenon although localized sectoral inflation (such as unnatural escalation of real estate and housing prices few years back) is mostly within the ambit of monetary authorities. More generally, monetary policy can support the vision by creating appropriate incentives to channel savings into infrastructure investment that typically pay-off in the long-term. Finally, external sector stability should not be much of an issue as long as the economy is gradually diversified and production is competitive in addition to a net positive transfers and sizable foreign exchange reserves.

Supportive environment

An investment-friendly environment is essential to increase domestic as well as foreign investment. While a slew of laws need updating, policies need rewriting to facilitate and simplify investment rules and approvals. In the meantime, drastic enhancement of capital spending absorption capacity is required to increase public spending in infrastructure, a lack of which is the most binding constraint to inclusive economic growth. Supportive institutions that can foster creative creation and creative destruction need to be promoted as opposed to the protection of business interests through syndicates and cartels. This is crucial for entrepreneurial spirit and to incentivize saving, investment and innovation. Inclusive political and economic institutions are vital to sustaining an equitable and rising income per capita. It is also important to change the course of out-migration for jobs and improved opportunities, and to enhance external sector competitiveness.

Structural transformation

A meaningful structural transformation underpins the pace and pattern of economic growth. Along with the decline of the agricultural sector, Nepal is seeing the rise of low value added, low productivity services sector activities. This structural shift is bypassing industrial sector growth (a sort of deindustrialization), which is vital for productive employment, sustained rise in income per capita, and high growth rate initially. Reversing this trend and revitalization of industrial sector along with promotion of high value added agriculture and services sector activities, with an employment centric strategy to absorb the surplus labor, should form the core of the structural transformation process, which will then lead to higher and inclusive economic growth.

With the right mix of reforms and policies, supportive institutions, enhancement of absorption capacity, and a sound macroeconomic environment to support such structural transformation, the likelihood of attaining the long-term vision is high.

15 Most Awaited Hollywood Movies of 2017!

2016-07-25T19:38:00.000-07:00

☆☆☆ 15 Most Awaited Movies of 2017

1. War for the Planet of the Apes (2017)

● Director: Matt Reeves ● Stars: Sara Canning , Judy Greer , Woody Harrelson , Andy Serkis

2. World War Z 2 (2017)
● Stars: Brad Pitt , Cristian Lazar

3. The Mummy (2017)
● Director: Alex Kurtzman
● Stars: Sofia Boutella, Tom Cruise , Annabelle Wallis , Russell
Crowe

4. Pirates of the Caribbean: Dead Men Tell No Tales (2017)
● Director: Joachim Rønning , Espen Sandberg
● Stars: Johnny Depp , Kaya Scodelario , Brenton Thwaites ,
Orlando Bloom

5. Star Wars: Episode VIII (2017)
● Director: Rian Johnson
● Stars: Gwendoline Christie , Daisy Ridley, Oscar Isaac ,
Domhnall Gleeson

6. Transformers: The Last Knight (2017)
● Director: Michael Bay
● Stars: Mark Wahlberg , Laura Haddock , Anthony Hopkins , Josh
Duhamel

7. Wonder Woman (2017)
● Director: Patty Jenkins
● Stars: Gal Gadot, Chris Pine , Robin Wright, Connie Nielsen

8. Justice League (2017)
● Director: Zack Snyder
● Stars: Gal Gadot, Jared Leto , Henry Cavill , Jason Momoa

9. Fast 8 (2017)
● Director: F. Gary Gray
● Stars: Dwayne Johnson, Scott Eastwood, Jason Statham,
Nathalie Emmanuel

10. Guardians of the Galaxy Vol. 2 (2017)
● Director: James Gunn
● Stars: Chris Pratt , Zoe Saldana, Sylvester Stallone , Elizabeth
Debicki

11. Spider-Man: Homecoming (2017)
● Director: Jon Watts
● Stars: Robert Downey Jr. , Tom Holland , Martin Starr , Logan
Marshall-Green

12. King Arthur: Legend of the Sword (2017)
● Director: Guy Ritchie
● Stars: Aidan Gillen, Charlie Hunnam, Annabelle Wallis , Katie
McGrath

13. Jumanji (2017)
● Director: Jake Kasdan
● Stars: Dwayne Johnson, Tom Holland , Kevin Hart, Jack Black

14. Intelligent Life (2017)
● Stars: Lupita Nyong'o

15. Valerian and the City of a Thousand Planets (2017)
● Director: Luc Besson
● Stars: Cara Delevingne , Ethan Hawke, John Goodman, Dane
DeHaan