EDITORIAL: Better Outlook
Political commitments made during the investment summit must be translated into action through legal and bureaucratic reforms
There is something to cheer about. The Asian Development Bank (ADB) has projected that Nepal’s economy will grow between 5.2 to 6.2 percent this fiscal year.
Last year it was just 0.8 percent largely due to the effects of the devastating 2015 earthquake followed by the six month long trade blockade and acute power shortage.
Unveiling its macroeconomic update on Tuesday, ADB said Nepal’s economy will rebound to a moderate growth this fiscal due to increased agriculture production as a result of the early and fair monsoon, acceleration of post-earthquake reconstruction works, surge in imports of construction materials, improvement in energy supply and rebounding of the manufacturing activities due to the smooth supply of raw materials.
The ADB’s projection is close to the government projection of 6.5 percent. During the fiscal year of 2013/14 the growth rate stood at 5.7 percent. In the negative side, the ADB has said that deceleration of remittance in recent months and marginal impact of demonetisation of high Indian currency bank notes will likely cause some effects, mainly in the service sector.
The other bright side of the fiscal is that the flow of government money for reconstruction and election related activities will also help boost the national economy to some extent.
The ADB report suggests that overall economic activities will be in a positive direction as the inflation rate will remain at 6.5 percent due to impact of demonetization of high denomination Indian banknotes and stable markets. The government has projected inflation to remain at around 7.5 percent.
But the multinational donors have warned that the country’s current balance of payments (BoP) may be on the negative trend due to huge imports in the past six months. The BoP surplus decreased to US$ 419.6 million in the first half of this fiscal from US$ 1.3 billion.
This is a serious issue that the government and Nepal Rastra Bank have to address by improving exports by various measures. No nation can achieve economic growth in a sustainable manner without accelerating export, which is one of the drawbacks of Nepal’s economy.
The ADB has also stressed the need to focus on key operational and legal issues if the country is to attract foreign direct investment as per the spirit of the Investment Summit held on March 3-4. In this regard, the government has to implement transparent predictable legal and operational frameworks to realize the FDI pledges.
More than 34 countries, including China and India, had pledged to invest US$ 13.5 billion during the summit. Till date, the share of FDI in the country is just 2.8 percent compared to 12 percent in India.
The positive aspect of the summit is that all major political parties are committed to FDI providing a level playing field to all through legal reforms. But the pledged money will not arrive unless the government follows a one-door policy facilitating the FDI without any bureaucratic hassles.
There were more than one dozen government agencies from which one had to take procedural clearance before bringing in FDI. FDI is now handled by the Department of Industry which is positive.
Political commitments made during the summit must be translated into action through legal and bureaucratic reforms.
There are two types of migration of birds in Nepal – one in the summer season and another during the winter. Now that we are in the pre-monsoon season Eurasian and other kinds of koels have started coming to the Kathmandu Valley from southern India and South Africa.
These birds can be found even in urban areas where there are only a few trees. You can even hear their voices most of the time. These birds migrate to the valley during this season for breeding purposes and also because there is abundant food for them.
Koels stay in the valley and other types of birds migrate to the Terai and also other parts of the country.
Most of the bird species migrate to Nepal during the winter season. As many as 150 bird species enter Nepal during the winter in comparison to only 30 to 40 bird species during the summer. Some of the birds of pied cuckoo species migrating to Nepal travel more than 5,000 km one way from Sub-Saharan Africa.
The summer birds stay until October and then fly away during the winter for their habitat which these days are being increasingly threatened.