Shabda Gyawali's Blog

Source :Economic Times Writer :Swaminathan S Anklesaria Aiyar People ask if India can grow fast if Bharat does not. Well, nothing exemplifies Bharat more than Bihar, and it has grown at 11% during 2004-09 , the same period when India registered a record 8.5% growth. India’s fast growth owed much to high technology and exports, exemplified by computer software and automobiles. But Bihar has neither high technology nor exports. India and Bihar seem to have little in common, yet both their growth spurts have a common cause: connectivity. India’s success stems from globalisation , which the Left calls an imperial recipe for subjugation. But when Indian companies are taking over global companies galore — the latest being Bharti Airtel’s takeover of Zain in Africa and Warid in Bangladesh — the notion that India is being subjugated is nonsense. Globalisation creates on a global scale opportunities that were earlier available only within nations. Once, people knew little of the world beyond th...

Switching of balance of payment surplus to deficit, capital flight exacerbated by the political instability, mob mentality labor force, marginal growth in remittances ,liquated crunch ,high credit to deposit ration of commercial banks, double digit food inflation, bearish equity market have finally attracted the attention of fiscal and monetary policy markers. Even the prime minster and the finance minster ,who until recently were selling their hallow rhetoric of high growth rate and economic development now believe that Nepal waning economic health is a serious cause of concern. As reported by this news paper, Finance minister Surendra Pandey has requested the fund (IMF) to access the macro economic situation of the country and provide recommendation. No one doubts the IMF credentials and I am sure that at the end of the day , International monetary fund -often called as a spokes person of the “Washington Consensus” will recommend polices that will re...

You don’t have to be a rocket scientist /PHD in economics to figure out why capital flight is taking place, there are three main causes for the capital flight - political instability, high inflation and a search for increase return on one’s investment. With never ending national political drama and high inflation rate (more than banks deposit rate), Investors started looking for investment opportunity that is not coupled /correlated with the nation politics. At the mean time When Nepalese investor did not see any hope in the domestic economy, what was happening in the emerging markets (especially India and other emerging Asian nation) was that they were raising fast from the ruble of the disastrous economic crisis, with the buttress of huge fiscal stimulus package and high flow of foreign institutional investment. Like any prudent investor, what investor here in the country started doing was investment in India, those who were not challening there fund to India, where buying gold....

Nepal Rastra Bank has blamed - 192 percent rise seen in gold import as one of the reasons behind the balance of payment deficit. In an attempt to curb the huge import of Gold, the Central Bank of Nepal has revised the import process. Now, gold importers are required to deposit 40 percent cash in the bank to get a standby Letter of Credit (LC), bank guarantee or normal LC from the bank for the import. If you look at the fundamentals, it is not just the lack of political instability or less investor friendly environment in the domestic market that have caused the balance of payment deficit in the country. Global financial crisis and its consequences are also supposed to be equally blamed for the BOP deficit. After the global economic crisis, many developed countries and emerging countries in the World decided to follow the Keynesian Model and introduced billions of dollars of stimulus package, the central banks of these countries also ease their monetary policy .With massive money supp...

Policy makers these days in Kathmandu are busy to find a solution to whether the upcoming economic storm -dual combination of capital flight followed by deficit BOP and inflation. Ministry of Finance and NRB have come up with different polices, and many more are in pipe line, most outrageous and unviable recommendation was by the Government of Nepal to the NOC to reduce import of oil. Capping the auto & housing loan, revising the gold import procedure or even asking people to consume less fuel is a short term solution. Unless we have a political and economic reform in a policy level, these kinds of erratic crises will continue to linger. With majority of the imports coming from India, and Nepal sharing an open border with India. You don’t have to be a PHD in economics to figure out why we are having a huge capital flight to India or why we have a ballooning trade deficit with India. Till the third quarter of the last fiscal year remittances flow to Nepal was decent. With infl...

Prime Minister was asked about China extending its influence in the neighbourhood, including Nepal and Pakistan, and whether India's armed forces were prepared to deal with the situation. "I think security concerns are the primary responsibility of every civilised country and you have my assurance that we will and we have been paying adequate attention to protect and preserve the security of our country," he said.

Intervention is as ancient and well-established instruments of foreign policy as are diplomatic pressure, negotiations, and war. From the time of the ancient Greeks to this day, some states have found it advantageous to intervene in the affairs of other states on behalf of their own interests and against the latters' will. Other states, in view of their interests, have opposed such interventions and have intervened on behalf of theirs. In the context of Nepal, looking at the political and economic events that have happened in the past few days, it seems like the index of intervention of foreign players in domestic affairs of Nepal is on the rise. The brewing discord between our two " Super power wanna be neighbors "and the power struggle between them to be the regional hegemons have greatly influenced the political and economic ideologies of our political parties. No matter which side of of the isle they represent (left or right ) the politcial parties has co...

Click here to read Nepal´s inflation moderated to a single digit for the first time over the last one year and stood at 9.7 percent in mid-September 2009, Nepal Rastra Bank (NRB) has reported.

With Western consumer being more thriftier and developing a culture to save.Firms around the world are eying the world last untapped markets THE POOR Click here to read the article

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ON MARCH 5th an index of the value of the American dollar against six other big currencies touched 89.11, its highest point this year. Since then, however, it has been a steady downward drift for the greenback. On Tuesday October 20th, for example, the dollar index had slipped to 75.24, its lowest point in more than a year.... Click here to read the full article I am sure you will enjoy this policy paper - The future of dollar Click here to read

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" We know now that the weapons are coming through Bangladesh and Myanamar and possibly Nepal. The border is very porous. The Indo-Nepal border is a very porous border." - P.Chidambaram,Home minister of India Click her to read the full article

On the outskirts of Kathmandu, capital of Nepal, climate researchers twiddle with computers displaying maps of the Himalayas. At the press of a button, rivers and mountain passes change colour and watercourses expand to show villages swept away by simulated flood waters. Not all the researchers at the International Centre for Integrated Mountain Development are pondering the devastation that would result from the bursting of high-altitude glacial lakes, though. Some are considering what awaits millions of people when the ice and snow caps of the “water towers of Asia” – so called because of the 10 big rivers originating in the peaks – are depleted by global warming. Few are willing to guess when this will happen, but their charts and photographs of retreating snowlines and glaciers have the whiff of inevitability. Already mountain hydrologists can pinpoint where water stress will be greatest in the years to come. As the availability of water in Himalayan-fed river systems that support ...

KATHMANDU: Indian commerce and industry minister Anand Sharma is arriving in Nepal on Tuesday to ink the new India-Nepal Trade Treaty that will now get a seven-year shelf life instead of the earlier five with the provision to have it automatically extended every seven years. With the signing of the new treaty in Kathmandu on Tuesday between Sharma and his Nepali counterpart Rajendra Mahato, Nepal gets more time to provide a more stable framework for bilateral trade and investments. The two ministers will also sign a new agreement upgrading the 1996 agreement to control unauthorised trade from third countries. Both the agreements had been initialled during Prime Minister Madhav Kumar Nepal’s five-day visit to New Delhi in August. The new trade treaty will now see bilateral trade being conducted in Indian rupees at par with trade in convertible currency in respect of tax rebates and other benefits available to such trade. This indicates ending the existing complicated mechanism of tax ...

LEH, India -- In the brewing discord between two giant, ambitious nations, even a remote meadow in the Himalayas is worth fighting over. Some two-dozen Chinese soldiers converged earlier this year on a family of nomads who wouldn't budge from a winter grazing ground that locals say Indian herders had used for generations. China claims the pasture is part of Tibet, not northern India. The soldiers tore up the family's tent and tried to push them back toward the Indian border town of Demchok, Indian authorities say. Increasing Friction Chering Dorjay, the chairman of India's Ladakh Autonomous Hill Development Council, says he arrived on the scene with a new tent and Indian intelligence officers and urged the herders to stay put. "The Chinese, it seems, are gradually taking our territory," he says. "We will feel very insecure unless India strengthens its defenses." Dueling territorial claims along this heavily militarized mountain border, coupled with econo...

"We stand committed that our per capita carbon emissions will never exceed the average of the per capita carbon emissions of developed countries." Prime Minister Manmohan Singh of India