Kathmandu, January 4, 2008

The government is looking to privatise Nepal Telecom, Agriculture Development Bank and the Nepal Stock Exchange this fiscal year by divesting some shares in them while retaining its control.

Some experts say such a method will not be effective and will not lead to real changes in the organisations. Selling some of the shares is the preferred modality for privatising these enterprises, said Shiva Bahadur Rayamajhi, joint secretary at the Corporation Coordination Division of the Finance Ministry.

“The sectors like telecom and agriculture development are sensitive to the government; that is why they need to retain control. Earlier we used to either entirely privatise these enterprises or liquidate them, but we want to have some control now.”

But Dr Bhola Chalise, who recently chaired a committee to look into public enterprises, said such a modality was not effective. He asked why the government labelled some industries sensitive. “The private sector is selling life-saving drugs. Is that not sensitive?” The government is set to sell NT’s shares worth Rs 15 billion (10 per cent of its holding) by the end of the month, said Rayamajhi.

The public will get to buy shares worth Rs 10 billion, while Rs five billion worth of shares has been reserved for NT employees at a discounted rate. The Citizen Investment Trust will manage the issues. But Dr Chalise’s report specifically says NT should be handed over to a strategic partner.

Public paying for basic health services

Kathmandu, January 4, 2008

The law provides that the State shall provide basic health services free of cost to every citizen. However, this right is limited to being just a constitutional clause. In reality, the state spends about one fifth of what the public spends from their own pockets.

The per capita government expenditure on health remained as low as $2.3 in 2002-03, while the public spent $11.2 from their own pockets, according to Nepal’s first and the latest research report, Nepal National Health Accounts, prepared around late 2007 by the Health Economics and Financing Unit (HEFU) at the Health Ministry. While the government’s per capita spending on health is nearly 15 times lower than the $34 mark set by WHO, its 26.3 per cent contribution to the Total Health Expenditure (THE) itself is not as bad, when compared to that of India and Pakistan — 17.3 and 19.6 per cent, respectively — according to the WHO. Nepal’s THE stood at Rs 24.9 billion in 2003.

Of this, the government made a contribution of Rs 4.18 billion or 16.8 per cent, whereas the household share was Rs 15.56 billion or 62.5 per cent. The shortfall of Rs 5.15 billion was met through external development partners.