Tourism in Nepal a major economic activity

KATHMANDU, JAN 10 -

Chief Secretary Lilamani Poudel has said tourism has emerged as a major economic activity in Nepal and is expected to do wonders in the coming years in terms of employment generation and poverty alleviation.

At the time when other sectors are not performing well, tourism is only the sector that could benefit Nepal in the short-run, said Paudel addressing the 50th annual general meeting of Nepal Association of Tour and Travel Agents (NATTA) here on Thursday.

Saying that attracting 100,000 tourists means adding 50,000 jobs, he said: “Hence, in the present context, tourism can change the fortunes of remote areas as well other places with potential but lacking infrastructure.

Areas such as far-west have a lot of potential to attract visitors, but it is disappointing that the areas have not been explored yet.”

He urged the private sector to come up with a strategic plan, under which the government can mobilise resources to develop a particular sector, eventually benefiting the rural areas.
Tourism Secretary Sushil Ghimire said a strong national flag career plays a crucial role in the development of tourism. “In Nepal, it took almost 26 years to buy planes for the national flag carrier. This fact has shown why Nepal is lagging behind,” he said, adding planners and policymakers must realise the fact.

Federation of Nepalese Chambers of Commerce and Industry President Suraj Vaidya said the country is receiving huge investment in tourism after hydropower. He said Nepal has observed sustained growth in terms of the number of tourists, but has not been able to attract quality tourists.

“We should not run after the numbers. We need to look what is the value of tourism or what quality tourism means to Nepal,” he said, adding the private sector has expected the new government will bring a Labour Bill to ensure and create business-friendly environment.

Outgoing NATTA President Pavitra Kumar Karki lamented the country has not been able to increase the average length stay of tourists.

Poor airport infrastructure, weak performance of Nepal Airlines and uncontrolled airfare are some challenges for the country’s tourism, he said.

 
Post journo Prasain awarded

Nepal Associ-ation of Tour and Travel Agents (NATTA) has felicitated The Kathmandu Post scribe Sangam Prasain with the NATTA Media Award 2013 for his significant contribution to the development of Nepal’s tourism through journalism.

 Prasain was conferred a plaque and cash award by Minister for Culture, Tourism and Civil Aviation Ram Kumar Shrestha amid NATTA’s 50th annual general meeting. Ramesh Tiwari from an online media and Kedar Koirala of Mountain TV were also honoured. Tourism entrepreneur Bikram Pandey was awarded with NATTA Bhaskar Award 2013. (PR).

Source:ekantipur.com, Jan 10th 2014
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Nepal's future looks bright but not without challenges

KATHMANDU, JAN 02 -

 

Who would have imagined a decade ago that one could book air or movie tickets from a mobile phone ? Who would have thought migrant Nepali workers could send remittance on a phone ?

All this, and much more has happened in last one decade, thanks to the advancement in the domestic information and communication technology (ICT) sector. Digitisation of the economy is under way.

 

However, Nepal still has miles to go. It is at the 137th position (2012) in the ICT Development Index, as per the International Telecommunications Union, a UN body for global telecommunication matters. It clearly shows no matter how much advancement Nepal has made in the ICT sector, other economies are advancing at a faster pace. 

 

The progress made so far has been driven by the private sector. Despite being located between two fast growing economies—India and China—Nepal has failed to take advantage. The northern neighbour, China, dominates the global ICT hardware trade, while the southern neighbour, India, is known for software development and is known as one of the best destinations for business process outsourcing (BPO). 

 

“Compared to hardware, we can do far better in BPO and software development, mainly for clients looking for a cheaper labour destination,” says Binod Dhakal, president of the Computer Association of Nepal (CAN). “In the case of utilising ICT for development, the country is yet to exploit its true potential.” 

 

According to a study carried out by the CAN, the Nepali IT industry was worth $42 million in 2008, with an average annual growth rate of 8 percent. 

 

There is no any exact data on the size of investment and IT sector’s contribution to the economy, but based on the CAN study, it can be estimated that the IT industry has an estimated turnover over $110 million now, including hardware/software trading and BPO exports. 

 

Progress and Potential

ICT has become an integral part of one’s daily life. And, it is not only the private sector that is going hi-tech, but also the government is gradually adopting online service delivery systems. Some examples include online company registration launched by the Company Registrar Office, use of ICT in the issuance of voter ID cards and recording their data during the Constituent Assembly elections, and adoption of e-tendering.

 

 The Ministry of Information and Communications has formed a taskforce to carry out a feasibility study to develop the country as a free WiFi zone. The panel under the coordination of Mahesh Prasad Adhikari, board member of the Nepal Telecommunications Authority, has been given 30 days to complete the study. It will suggest the government on funding and technical requirements for the scheme. 

 

Also, under its ICT Development Project, the Department of Transport Management is gearing up to implement electronic driving licence and blue book system. 

 

Basically, the local market is considered as the consumer of services produced in the international market. But this notion is changing. Innovative services like CahOnAd (smart phone application) have been successful in attracting global attention, while a number of BPO firms have successfully attract businesses from developed economies like the United States, the United Kingdom, Australia and Japan. 

 

With the entry of the private sector operators a decade ago, the domestic telecommunication market has grown notably. Mobile telecom service, which used to be considered luxury until a decade ago, has now become a necessity. Moreover, the convergence in technology has helped use mobile devices for multiple services like mobile banking and payments.

 

In the local context, this has become possible due to a significant rise in the number of smart phone and data users, according to Bhesh Raj Kanel, former chairman of the Nepal Telecommunications Authority (NTA). As of October 2013, mobile phone penetration rate of the country has increased to 72 percent. 

 

Development of innovative mobile applications within the country suggests how big the potential of mobile technology is. Although the local market is far behind in the hardware segment, in terms of BPO, software and mobile applications, it holds huge possibilities. 

 

About four months ago, CashOnAd was launched, raising eyebrows of not only domestic but also international marketers. The smart phone application has revolutionised market segmentation and targeting. CashOnAd has so far recorded 90,000 downloads. What is more interesting is the application offers Rs 1 for watching a commercial that plays on the smart phone screen every time a call rings.

 

The developer has said it will take the product to the global market by this year. “We are targeting to reach around 70 countries and record 5 million downloads within 2014,” said Biswas Dhakal, president of CashOnAd.

 

Domestic IT forms, which mostly focused on outsourcing, have started to get demands from the domestic market as well, especially for smart phone applications. For an instance, BrainDigit IT Solution, which was originally started as a BPO in 2007, now also serves the domestic market. “BPO is just another business for us as we have started focusing on the local market as well,” said Nitesh Gorkhalai, business development director of the company. He said the company is set to launch two new concepts on product and service promotion—Predicting Game and Ramailo Mart.

 

The progress in the overall ICT in the country is mainly driven by the private sector, while the government has not been able to catch up with the trend. Even as the government adopted e-governance concept in 2006, the results so far have been negligible even as the time has come to move from e-governance to m-governance.

 

 IT Park in Banepa built around a decade ago has failed to yield desired fruit. “The sector is one of the most neglected one by the government,” said Biplov Man Singh, chairman of the ICT Development Committee of the Federation of Nepalese Chambers of Commerce and Industry. 

Given the potential in the BPO sector, Singh said the government should first encourage local firms by giving incentives like tax waivers and addressing problems like load-shedding. 

 

Although the majority of BPO firms are yet come under the government record, it is estimated they export services worth $50 million (Rs 5 billion) annually, according the CAN. 

A study carried out by the then High Level Commission for Information Technology in 2004, BPO exports stood at $7.2 million annually, with an average annual growth rate of 20 percent. 

 

Currently, the global outsourcing market is worth over $90 billion, with Indian and the Philippines being the major BPO hubs, according to media reports. 

 

Since Nepal’s workforce is cheaper, the BPO sector has a huge potential for earning foreign currency and generating employment.  

 

There are an estimated 200 firms involved in the BPO sector. However, around only a dozen are visible in market. Also, hardly 50 such firms are registered with the government authorities concerned. 

 

Although the CAN annually organises SoftTech, an event to promote BPO firms and software developers, participation is very low, says CAN President Dhakal. 

 

Even as the government has listed BPO and software as exportable items, both the government and the private sector have failed to promote the country among global clients. Last year, the government had assured of bringing a separate policy to help promote the BPO sector. But the despite formation of the IT Council headed by the Prime Minister and a separate IT Department under the Ministry of Science, Technology and Environment, no progress has been made on this front.

 

CAN President Dhakal said the government has failed to abide by its own policy. “The policy is perfect, but there is no action plan to move ahead,” he said. 

 

Be it finance, health or education, every sector is related to IT one way or the other. At the same time, technology is changing every day. To catch up with the fast changing trend and capitalise on its potentials, the authorities concerned have to be more proactive and change the rules and regulation accordingly. In Nepal, ICT issues are looked after by agencies like Ministry of Science, Technology and Environment, Ministry of Information and Communications and the NTA. 

 

Sudhir Parajuli, CEO of Subisu Cable Net, said convergence in technology has made it possible to provide data, voice and video services from a single cable. “But we are required to take separate licence for all these services,” he said.  His company is providing cable TV service and internet service from the same cable, but has acquired two separate licences.

 

There is still confusion regarding the jurisdiction of the Communications Ministry and the Technology Ministry. The IT Department is under the Technology Ministry, but areas like voice and data service and IP TV falls under the sector is being governed by the Communications Ministry. 

In a bid to formulate policies, the IT Council was formed but it too has failed to accord priority to the sector. “HLCIT was at least trying to move gradually building local and international relations,” says Dhakal, adding the policy-level confusion and the government’s negligence has badly affected the sector.

 

Source: ekantipur.com, 2nd Jan 2014

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Nepal's foreign reserves rises to over Rs.474 billion

KATHMANDU: The total foreign currency reserve has increased by 7.9 per cent to Rs 474.16 billion during the first nine months of the current fiscal year, according to the Nepal Rastra Bank (NRB).

Earlier, the foreign currency reserve was Rs 439.46 billion during the same period of the fiscal year 2068/069.

Of the total reserve, the NRB owns Rs 387.56 billion which is 3.2 percent more than of the last fiscal year.

Likewise, the reserve of Indian currency reached 64.52 billion with an increase by 6.8 percent against the same period of the last fiscal year.

According to the NRB, the reserve of the foreign exchange is sufficient to import goods and service of 9.2 months.

Similarly, the revenue mobilisation of the government during the review period has reached Rs 210.47 billion increasing by 22.3 per cent, thanks to rise in exports. The revenue mobilization was Rs 172.9 billion in the last fiscal year.

Likewise, value added tax (VAT) revenue has reached Rs 60.64 billion increasing by 15.7 per cent as compared to the last fiscal year.

During the review period, customs tax contributed Rs 41.64 billion which is more by nearly 39 percent than the review period of the last fiscal year.

According to the central bank, the income tax revenue has also increased by 31.1 percent contributing a total of Rs 48.26 billion due to reform in income tax administration and positive impact of taxpayer education.

Similarly, the excise duty revenue collection has reached Rs 26.19 billion during the review period contributing 20.5 percent increase than the same period of the last fiscal year.

However, the non-tax revenue has deceased to Rs 23.82 billion in the review period against Rs 25.25 billion of the same period of the last fiscal year, according to the NRB.

Source: The Himalayan Times, 14th May 2013
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Nepal's Inflation comes down to 9.5 percent

KATHMANDU, NEPAL

Inflation moderated to 10-month low of 9.5 percent in April, as prices of non-food items and services rose at a slower pace in the month. Inflation last hovered at this level in May 2012.

Consumer price hike eased on the back of deceleration in rise in prices of clothes, footwear, furniture and household equipment, the latest macroeconomic report of Nepal Rastra Bank shows. Slower hike in transport and health costs also helped inflation to ease in the month, the report states.

In one-year period to April, prices of clothes and footwear went up by 10 percent than 15.1 percent recorded in the same period last year. Hike in prices of furniture and household equipment also eased to 12.1 percent in the one-year period, as against 13.6 percent registered in the same period a year ago.

Similarly, transport and health costs rose by 7.6 percent and 5.4 percent, respectively, in one-year period to April, in comparison to hike of 17.8 percent and 7.7 percent seen a year ago.

During the period, prices of most of the food items, however, surged, exerting pressure on low-income group which spends significant portion of disposable income to purchase rice, lentil, vegetables, cooking oil and spices.

In the period, prices of cereal grains and their products surged by 13.5 percent, while prices of legume varieties shot up by 11.8 percent. Similarly, prices of meat and fishes climbed by 16.2 percent and prices of ghee and oil rose by 10.3 percent in the period.

Price hike in Nepal is generally attributed to rise in prices of commodities in India, from where Nepal imports most of the goods.

Imports from India went up by 22.9 percent in the first nine months of the current fiscal year, shows the report, as against the increment of 13.1 percent recorded in the same period last year. Similarly, imports from other countries rose by 15.5 percent in the nine-month period compared to a hike of 28.3 percent reported in the same period a year ago.

Overall, Nepal´s merchandise imports surged by 20.3 percent to Rs 408.83 billion in the first nine months of the current fiscal year.

In contrast, Nepal´s exports in the period went up by marginal 3.5 percent to Rs 57.16 billion, the report shows. In the same period last fiscal year, exports had gone up by 15.9 percent to Rs 55.24 billion.

Nepal´s total exports grew at a tepid pace as exports to India increased by a marginal 0.4 percent during the period, as against a rise of 18.4 percent recorded in the same period last year.

Exports to other countries, on the other hand, went up by 10 percent in the nine-month period.

As imports surpassed exports, Nepal´s trade deficit surged by 23.6 percent to Rs 351.67 billion in the period. This, in turn, played a major role in causing the country´s current account surplus-difference between exports and imports of goods and services and transfers from the country and aboard-to shrink to Rs 22.23 billion in the nine-month period as against a surplus of Rs 41.95 billion recorded in the same period last year.

Nepal managed to post a current account surplus despite widening trade deficit because of 21.9-percent growth in workers´ remittances to Rs 302.58 billion. In the same period last year, workers remittance had surged by 36.5 percent, indicating lower growth rate this year.

At the same time, the net service income posted a surplus of Rs 4.56 billion in the nine-month period compared to a surplus of Rs 12.49 billion in the same period last year.

As current account surplus shrank due to widening trade deficit, the overall balance of payments -- the country´s total transaction with other nations -- surplus narrowed to Rs 30.77 billion in the first nine months as against Rs 92.55 billion recorded in the same period last year.

Source: myrepublica, May 13th 2013

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Nepal Economic Growth Forecast at 4% according to UN

KATHMANDU: As the government and other agencies have been paring down the forecast for Nepal´s economic growth to 3.56 percent, the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) has Thursday said growth would be maintained at 4 percent for the current fiscal year.

"A more realistic growth projection would be about 4 percent," reads a UNESCAP statement released here on Thursday. The UNESCAP, releasing its annual report on ´economic and social survey of Asia and Pacific 2013´, said political instability, frequent strikes and persistent labor problems, and severe power shortage are major reasons for low growth.

The report also touched the inflation of the country. "Inflation in Nepal is closely linked to inflation in India because of the fixed exchange rates between the currencies of the two countries," it said.

UNESCAP has highlighted labor shortage in the domestic market of Nepal and recommended some policy measures to take in order to accelerate economic growth. "In order to realize its development potential, Nepal will have to overcome a number of development challenges such as infrastructure gaps and energy insecurity," reads the report.

Similarly, UNESCAP has suggested the government address some deepening problems like poverty, hunger, and rising inequality, among others. "The services sector of the country is having a faster growth compared to other sectors of the economy," the report outlines. "South Asian countries face growing energy demand, and a number of energy challenges."

Meanwhile, there are some suggestions in the macro economic policy front of Asia Pacific countries. "A job guarantee program, a universal and non-contributory pension for all aged 65 or older, increasing public expenditure in health sector and addressing energy problems required to be managed through macro economic policy adjustments in the economy," highlights the report.

Source: myrepublica, 18th April 2013
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Nepal Inflation at 10.2 percent in March 2013

KATHMANDU: A sharp hike in prices of key food items, clothes, footwear, and housing and utilities cost pushed inflation to 10.2 percent in March as against seven percent reported in the same period last year.

The inflation recorded in the period was 0.7 percentage point higher than the revised annual target of 9.5 percent.

On average, prices of food items shot up by 11.3 percent, while prices of non-food items went up by 9.3 percent in March, the latest macroeconomic report of Nepal Rastra Bank made public on Tuesday shows.

Prices of cereal grains and their products, which contribute to 14.81 percent to the inflation basket, rose by 12.9 percent during the month, while prices of meat and fish soared by 17.1 percent. Similarly, ghee and oil became dearer by 13.9 percent and prices of legume varieties increased by 12.6 percent in the same period.

Among non-food items, prices of clothes and footwear went up by 11.5 percent, while housing and utilities cost increased by 9.7 percent in March. Similarly, education cost soared by 12.5 percent and transport cost went up by 8.4 percent in the review period.

Data show consumer prices increased by 10.8 percent in Kathmandu Valley followed by 10.2 percent in the Terai and 9.6 percent in the hilly region of the country in March.

Inflation has remained on the higher side so far this year because of lower agricultural harvest, wage pressures, hike in fuel prices, continued power shortages and supply-side constraints like presence of layers of intermediaries and black marketeering.

It is said supply-side constraints, depreciation of Nepali rupee against major currencies as in the recent case, rising wages and structural problems like lack of or low quality of infrastructure make two-third contribution to price hike in the domestic market. The rest is attributed to rising prices in India, from where Nepal imports most of its goods.

Despite double digit hike in consumer prices, wages increased by only 7.8 percent in March, with agricultural laborers witnessing 12.5 percent hike in wages. Wages of construction workers, on the other hand, went up by 8.1 percent in March, while carpenters saw their wages go up 6.1 percent.

Those working for the government, public corporation and banks and financial institutions, meanwhile, were biggest losers in March as they did not see any hike in their salaries.

Source: myrepublica, 16th April 2013

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