BBC Discussion on Nepal's Budget

BBC Nepali Service's Mr. Sanjay Dhakal moderates a discussion with Mr. Keshav Dhakal, senior economic advisor to the Ministry of Finance, and economist Dr. Chiranjibi Nepal on Nepal's new budget and its implications on economic development on November 27, 2010.

This discussion highlights the arbitrariness of of budget making in Nepal.

Global Perspective: India Revives 45-Year-Old Strategy China Adopted to Lift Exports

India Revives 45-Year-Old Strategy China Adopted to Lift Exports
Bloomberg, 17-Nov-10
By Tushar Dhara

It takes more than an hour to drive the 25 miles of clogged highway linking New Delhi to Noida Special Economic Zone. Inside the gate, a smooth four-lane road leads to electronics, engineering and textile plants that are at the heart of India’s plan to imitate China’s export success.

“It’s the kind of place where one can think of doing business,” said Vishnu Pal Singh, 51, whose Noida-based Optic Electronic India Pvt. sells night-vision devices for rifles and tanks to Germany and Poland. “The zone offers top class infrastructure and tax benefits.”

India is counting on entrepreneurs such as Singh to revive a system it pioneered 45 years ago: using enclaves that provide lower taxes, faster permits and even their own power source to boost exports. While India switched focus in the 1970s to industry tax breaks, China adopted the zone idea a decade later.

The system turned the former fishing village of Shenzhen into an export hub of 8.5 million people in 30 years and made China, with overseas sales of $1.2 trillion last year, the world’s largest exporter.

Now India, which shipped $165 billion worth of goods and services in the same period, is reviving zones as Prime Minister Manmohan Singh tries to raise manufacturing to 22 percent of the economy from 17 percent and double exports to 4 percent of global trade by 2020.

‘Islands of Excellence’

Investment in the special economic zones may double to about 3 trillion rupees ($66.2 billion) by 2012, India’s Commerce Ministry said. Exports from the SEZs more than doubled in the 2009-2010 fiscal year over the previous year, to 2.2 trillion rupees, a quarter of India’s total.

“Improving infrastructure in the entire country will take a long time, so if you want to promote industry, you need to create more islands of excellence, which these SEZs are,” said Dharmakirti Joshi, chief economist at Crisil Ltd., the Mumbai- based Indian unit of Standard and Poor’s. “India needs manufacturing to grow rapidly now to absorb the growing workforce.”

India set up its first zone in 1965 in Kandla in the western state of Gujarat and had established another by 1975, said Lalit Behari Singhal, former director general of the Export Promotion Council of Export Oriented Units and Special Economic Zones in Delhi. In the next 25 years, six more were set up.

Poor land selection, insufficient fiscal incentives and inadequate transport ensured that the zones didn’t prosper, said Rajesh Sonthalia, a founding member of the export promotion council.

Zones and Jobs

Only since 2005, when the government enacted laws favoring the zones, have they taken off. About 100 zones have opened since 2006, attracting 1.6 trillion rupees in investment, 60 times the level four years earlier. That helped create more than half a million jobs, the Commerce Ministry said. About 478 more SEZs have been approved.

“China spent a lot of money creating infrastructure, which India did not do,” said Priyankar Bhikshu, head of India research at DTZ Holdings Plc in Gurgaon, near Delhi, and author of a report called “Special Economic Zones in India: Expanding Contours.” “As the true spirit of SEZs now emerges, export competitiveness will unfold in the next couple of years.”

“SEZs have the potential to propel India as a major exporting nation,” said Aradhana Aggarwal, who teaches economics at the University of Delhi and is writing a book called “SEZs in India: Past Experience, Present Status and Future Prospects.”

One Office

The government-sponsored and private enclaves reduce red tape by offering a single office for environmental, tax and other government clearances. They also offer a way around power and water shortages in a nation that produces 10 percent less electricity than it needs. Companies operating in the zones get tax breaks for 15 years and don’t have to pay local excise or customs duties.

“Units can profit from tax and infrastructure benefits,” said Kishor Ostwal, managing director of Mumbai-based CNI Research (India) Ltd. He recommends investors hold stocks of Adani Power Ltd., which co-developed Mundra Port & Special Economic Zone Ltd., one of India’s largest by area at 16,000 acres, and Torrent Pharmaceuticals Ltd., which is building a plant in Dahej SEZ, both in Gujarat state.

Adani Power shares have risen 38 percent this year, while Torrent is up 40 percent. The benchmark Mumbai Stock Exchange Sensitive Index of 30 companies is up almost 14 percent.

Power Plant

Spread over 310 acres, the Noida zone’s rows of white, two- story buildings bustle with workers loading and unloading trucks with steel pipes, cement, electrical equipment and other materials. The zone has its own power plant, bus network, mail center, banks and automatic teller machines. Proposed additions include a second generator and a six-lane highway to Delhi.

“The biggest benefit is that this is designated as foreign territory,” said Optic Electronic’s Singh, who invested 100 million rupees to start his factory in unit 4C and is planning to expand. “I can do business better in here since it is exempt from local laws.”

Companies, including Gitanjali Gems Ltd., India’s biggest jewelry retailer, have benefitted.

“Our exports have risen after we moved some of our production to a special economic zone,” said Chairman Mehul Choksi. Overseas sales have grown between 40 percent and 50 percent, he said, without citing a time period. Gitanjali Gems shares have almost tripled in the past 6 months.

Export Battle

India’s push to build up exports may exacerbate a battle between nations from Brazil to South Korea that are trying to raise their own exports to lift economies after the global slump. Brazilian Finance Minister Guido Mantega said in September that a “currency war” had begun as nations tried to cheapen exchange rates to boost exports.

Brazil, South Korea, Turkey, South Africa and Russia are among nations that have their own economic zones, according to the World Bank.

“As these zones take off and Indian exports become more competitive, countries which rely on exports to drive economic growth will have a tough time,” said Anubhuti Sahay, an economist at Standard Chartered Plc in Mumbai.

India’s biggest zone by exports, the Santa Cruz Electronics Export Processing Zone, covers 100 acres and produced shipments worth $4 billion in the fiscal year to March 31, 2009. China’s largest SEZ by area is the southern island of Hainan, spread over 13,100 square miles.

Chinese Scale

“The difference between Indian and Chinese SEZs is one of scale,” said Rajesh Mohan Joshi, who teaches economics at the New Delhi-based Indian Institute of Foreign Trade.

China now has seven economic zones and another 100 smaller state and high-tech industrial parks. Shenzhen boasts some of China’s largest companies, including Huawei Technologies Co., the nation’s biggest maker of telephone-network equipment.

India’s zones are hindered by difficulty in buying land, said N. R. Bhanumurthy, an economist at the Institute of Public Finance and Policy in New Delhi.

“Unless the government resolves the issue of acquiring land, India will struggle to match the manufacturing prowess of China,” he said.

Singh’s government is backing a land acquisition bill that may be debated in parliament in the session scheduled to end Dec. 13. By guaranteeing market prices for seized land and helping resettle displaced residents, the government is trying to reduce disputes that have blocked companies from expanding.

Fatal Clashes

India suspended its SEZ program in December 2006 after farmers protested what they said were cheap prices paid for their land. Clashes in March 2007 left 14 dead in West Bengal state. The government restarted the system in April 2007 after prescribing a ceiling on size -- 12,355 acres -- and forbidding state administrations to take land by force.

More export zones are springing up in India.

Indiabulls Industrial Infrastructure Ltd., a unit of India’s sixth-biggest developer by market value, plans to complete a 2,500-acre zone in Nasik, western India, by March 2011. Sri City Special Economic Zone, 34 miles outside the southern Indian city of Chennai, held road shows in Malaysia, Australia, Japan and Taiwan to attract investors. Ravindra Sannareddy, managing director of Sri City, said he expects to attract 80 billion rupees in the next three to five years.

“Special economic zones offer unexplored opportunities,” said Vinay Sharma, who quit his job in 2008 as vice president of Mumbai-based Reliance Industries Ltd., owner of the world’s largest oil refinery, to set up a warehouse for oil and gas companies in Visakhapatnam SEZ on India’s east coast. “It is the unique set of services they offer that make them attractive.”

Global Prospective: US Fed's Quantitative Easing Explained........ By a Cartoon

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BBC Discussion on the State of Nepali Movie Industry

BBC Nepali Service's Mr. Narayan Shrestha moderates a discussion with Mr. Nir Shah (actor), Mr. Amar Gurung (Chairman of Nepal Film Development Board) and Ms. Rekha Thapa (Actress-Producer) on October 24, 2010.

This is very interesting, informative and entertaining discussion.

The most interesting quote is Mr. Nir Shah's comment that he cannot watch his own movies because they are "not watchable" i.e. they are bad. When asked why he still acts, he says that's because its his profession (comments @ 20 minutes).

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Kollywood turnover crosses Rs 350m
myrepublica, 5-Sep-10
ASHOK THAPA

With the restoration of peace and efforts of new production houses to cater to the taste of a new segment of viewers, the Nepali film industry witnessed a robust expansion in its market, generating handsome returns in Fiscal Year 2009/10.

According to Rajkumar Rai, the chairman of Nepal Motion Picture Producers´ Association (NMPPA), the industry drew investments of Rs 295 million during the year. Rai also estimated that the Nepali film industry made a profit of Rs 59 million during the year.

The year was also marked by Nepali filmmakers unveiling projects with aggressive budgets that aimed at entertaining viewers with ´new´ technologies going digital in filming and sound.

Movies like “Mero Euta Saathi Chha”, “Kahan Bhetiela”, “Hifajat” and “Chhodi Gaye Paap Lagla” were produced with investments of around Rs 8 million each, whereas a big budget film in the past meant investment of only around Rs 6 million.

Thanks to it, popular actors and actresses witnessed unexpected rise in their remunerations as well.

Actors like Biraj Bhatta and Aryan Sigdel, Jharana Thapa, Rekha Thapa and Sanchita Luitel, among others, enjoyed even up to 200 percent rises in their signing amount, a film industry insider who requested anonymity told myrepublica.com. In previous years, they used to get between Rs 150,000 and Rs 200,000 per film.

This is an encouraging turnaround and reflects a revival of confidence in the industry, something which was lost during the later years of conflict, commented industry analysts.

Records of NMPPA show that 59 motion pictures passed the censor test during the year. Of them, 20 films enjoyed business throughout the country, while another 23 were released only within the Kathmandu Valley.

That is not all. The Film Development Board registered 229 films, including 84 celluloid, 80 digital, and 65 short movies. A majority of them are yet to make their way to theaters.

“Compare this eagerness to produce movies with the previous year, and you will know how the situation has turned in the industry,” said NMPPA Vice President and Spokesperson Pradeep Uday.

In Fiscal Year 2008/09, producers registered just 187 movies, including 102 celluloid and digital and 85 short movies.

Uday credits this robust rise in investment to the entry of ´new, energetic and professional´ filmmakers, expansion of the market and economic returns making promises to deliver.

Producers told myrepublica.com that films with high budget not only took the standard of Nepali movie to a new level, but also enjoyed good returns. It was not just the big productions that made money this time, small-budget movies like “Kahan Chhau Kahah” and “Batuli” also reaped in high profits. Their producers declined to disclose returns though.

Rai said that most of the films with innovative concepts pertaining to youths and social issues made exceptional turnover. “Issues like love and friendship portrayed in films like ´Mero Euta Sathi Chha´ even added new segment of viewers to the industry,” he said.

Although filmmakers did not cite any figures, they were unanimous that the volume of viewers of Nepali movies itself had grown magically with the production of youth-appealing movies like ´Mero Euta Sathi Chha´.

Otherwise, total viewers of Nepali movies were estimated to stand just at around 2 percent of the country´s population, and a large segment of elites, particularly in Kathmandu, were never attracted to it.

As usual, the social love story of “Kahan Bhetiela” and the action and thrills of “Hifajat” too appealed to audiences in every nook and corner of the country.

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Remittances to Developing Countries Resilient in the Recent Crisis

Remittances to Developing Countries Resilient in the Recent Crisis
World Bank, 8-Nov-2010

Full Report
Nepal Specific Data

Remittances to developing countries were a resilient source of external financing during the recent global financial crisis, with recorded flows expected to reach $325 billion by the end of this year, up from $307 billion in 2009, according to the World Bank’s latest Migration and Remittances Factbook 2011. Worldwide, remittance flows are expected to reach $440 billion by the end of this year.

The World Bank estimates that, after recovering by the end of this year, recorded remittances to developing countries will rise further in 2011 and 2012, possibly exceeding $370 billion in two years’ time.

“Remittances are a vital source of financial support that directly increases the income of migrants’ families,” said Hans Timmer, director of development prospects at the World Bank. “Remittances lead to more investments in health, education, and small business. With better tracking of migration and remittance trends, policy makers can make informed decisions to protect and leverage this massive capital inflow which is triple the size of official aid flows,” Timmer said.

The top remittance sending countries in 2009 were the United States, Saudi Arabia, Switzerland, Russia, and Germany. Worldwide, the top recipient countries in 2010 are India, China, Mexico, the Philippines, and France. As a share of GDP, however, remittances are more significant for smaller countries—more than 25 percent in some countries.

While high-income countries remain the main source of remittances, migration between developing countries is larger than that from developing countries to high-income countries belonging to the Organisation for Economic Cooperation and Development (OECD).

Regionally, there is significant variation across developing regions, with larger-than-expected falls in remittances to Europe and Central Asia[1], Latin America and the Caribbean, the Middle East and North Africa, and Sub-Saharan Africa regions in 2009. Flows to South Asia in 2009 grew more than expected, and those to East Asia and Pacific rose modestly.

“Remittances in 2008 and 2009 became even more of a lifeline to poor countries, given the massive decline in private capital flows sparked by the crisis,” said Dilip Ratha, manager of the migration and remittance unit at the World Bank. “However, high unemployment is prompting many migrant-receiving countries to tighten immigration quotas, which would probably slow the growth of remittance flows. Also uncertain currency movements can have unpredictable effects on remittance flows,” Ratha added.

In addition to crisis-related risks, there are major structural and regulatory changes in the global remittance market. Regulations to combat financial crime have become a roadblock to the adoption of new mobile money transfer technologies for cross-border remittances. “There is urgent need to reassess regulations for remittances through mobile phones and mitigate the operational risks,” Ratha said.

According to the Factbook 2011, the top migrant destination country is the United States, followed by Russia, Germany, Saudi Arabia, and Canada. The top immigration countries relative to population are Qatar (87 percent), Monaco (72 percent), the United Arab Emirates (70 percent), Kuwait (69 percent), and Andorra (64 percent). Mexico–United States is expected to be the largest migration corridor in the world this year, followed by Russia–Ukraine, Ukraine–Russia, and Bangladesh–India.

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Rs. 800 million, 17-Story Tower will be the tallest building in Nepal

The JSB Financial Tower to be tallest building in Capital
TKP, 3-Nov-10

The JSB Financial Tower in Kamaladi will be the tallest building in Kathmandu when completed. Developed by Krishi Premura Properties, the 17-storey commercial complex will have a total area of 170,000 sq ft.

The building is situated at Kamaladi, one of the capital’s prime commercial locations, and is divided into three blocks—retail outlets, commercial spaces and penthouses.

The first three floors of the tower will house retail outlets, nine floors will be set aside for offices of banks, financial institutions and multi-nationals. The top five floors will contain penthouse apartments.

“The retail outlets will feature high-end brands,” said Pravin Naulakha, manager of the JSB Financial Tower.

The JSB Financial Tower stands apart for two reasons—location and design. It is coming up in a leading commercial location containing banks and financial institutions. With the Kamaladi-Durbar Marg area turning into a financial hub of the capital, the tower has targeted banks and financial institutions as its prospective tenants.

Designed by architect Debesh Raj Bhattarai, the tower will provide the entire range of financial services under one roof. “It will be an eye-opener for Nepal,” said Bhattarai. “It’s a contemporary design which we see abroad.” Emphasis has been given to green energy in the building, he added.

All the five penthouses have been designed with spacious living and dining rooms, common bathrooms, spacious bedrooms with attached changing rooms, attached bathrooms in each bedroom and a Jacuzzi in the master bedroom.

The tower, according to architect Bhattarai, will have three-layer basement parking space which can accommodate more than 200 vehicles. The tower is equipped with high-speed wireless and optical fibre connection ideal for video conferencing and high data transmission. There will be four passenger elevators in the tower.

Formal bookings for the tower will start within a month, said Naulakha. The tower is expected to be completed within two years from the start of construction. According to Naulakha, Rasuwa Construction Co. is the main contractor of the Rs 800 million project.

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To put things in perspective, here is the "History of the Tallest Buildings" in the world.

The world’s tallest building opens in Dubai

Economist, 4-Jan-2010

AT 828 metres (2,717 feet), the Burj Khalifa, which opened on Monday January 4th, dwarfs Taipei 101, which was previously the tallest tower anywhere, by 320 metres. The tower has more than 160 floors and cost some $1.5 billion. It is in danger, however, of being seen as the height of folly. Construction began in 2004, when the economy of the United Arab Emirates was growing at 9.7%. It is forecast to grow by just 2.4% this year and probably shrank by 0.2% in 2009. This is not the first tower to be planned in the good times and then opened in a slump. Countries home to many of the world's highest buildings (when they opened) saw their economies slump in the years between the start of construction and the official opening. Our chart compares economic growth of the relevant country when a tower was opened, with the respective annual growth rate enjoyed half a decade earlier.

BBC Discussion with the current & former Vice-Chairs of the National Planning Commission

BBC Nepali Service's Mr. Narayan Shrestha moderates a discussion with Mr. Jagadish Chandra Pokharel, current Vice-Chairman of the National Planning Commission (NPC) and Pitamber Sharma, a former Vice-Chair of the NPC on November 7, 2010.

This discussion sheds lights on the inner workings of economic planning and implementation at the highest level of Nepal's government. The bottom line is that domestic politics and donors agenda over-rides the technocratic views of the NPC or the real economic needs of the people. Mr. Sharma even quotes the Godfather ("make an offer they can't refuse") to illustrate the position of the NPC within the economic planning hierarchy of the country.

News Roundup: Waiting for Two Key Decisions

Roundup of Nepali Economic and Business News for Sep 1-Oct 31
By NepaliEconomy.com
Archive: Roundup of Economic and Business News

The country is waiting for two major decisions, one political, the other economic. The political decision is the formation of a permanent government. The economic decision is the passing of full-year budget. Unfortunately, the likelihood of anything happening on those two critical fronts in the near future is very low. On the political side, the NC's Mr. Ram C Poudel is holding fast on to his candidacy for the PM despite the withdrawal of Mr. Puspa K Dahal following the Maoist-UML pact. After 15th rounds of inconclusive voting, his candidacy looks pretty ridiculous, but there is a reason for his obstinacy. This OpEd does a good job explaining it. On the economic side, a lack of budget is having some ramification but the country can survive and even flourish without it. For better or for worse, Nepal's economy is doing well without must doing by the country's political, policy-making and bureaucratic elites.

Macro: The IMF and the ADB expect Nepal's economy to grow 4% in 2011. Such growth rate is not quite good enough. Economic and regulatory reforms are needed to help push the growth trajectory higher. As such Nepal is joining the IMF's Extended Credit Facility (ECF) to facilitate the reform process. One way to promote growth is to take advantage of zero-tariffs on certain items exported to China but Nepal is yet to take advantage of it. 60% of Nepal's trade is with the SAAR countries and it is time to diversify the country's export markets.

Monetary Policy: The NRB was surprised by a shortage of currency this time last year, and this year it made sure it didn't face the same problem. Unfortunately, signs of liquidity shortage are emerging. A part of the reason for the crisis last year was the BofP deficit. As such, this year the NRB imposed ban on gold imports (in 2009/in 2009/10, Nepal imported Rs. 42 billion worth of gold). In order to meet a huge demand for gold during Dasain, the NRB had to auctioned off 100k gold - the NRB owns 6 tons of gold in its reserves and another 1.2 tons in Luxemburg.


Fiscal Policy: The top 3 garners of government budget last year were irrigation, police and education. Foreign junkets for ministers and their cohorts absorbed another Rs. 107 million. Given a public outcry, the government has banned this outlandish privilege ($300/day allowance). One spending government cannot avoid is on the Maoists combatants - almost Rs. 2 billion was spent in the last fiscal year. On the revenue side, Rs. 3 billion went missing from local government bodies and another Rs. 3 billion from state coffers.


Agribusiness: Mustang farmers earned Rs. 180 million selling 3,500 tons of apples this year. Jumla, who declared itself as the "organic district" produces 5,000 tons of apples and is trying to export to Thailand and Malaysia. This is quite an ambition given that only 20% of Karnali's 18,000 tons apple have found any market. Remote Rukum is also facing the same problem. At least, Jumla can claim that it produces award-winning honey. Nepal is the 4th largest producer of ginger in the world after India, China and Indonesia, and exports 99 percent to India earning Rs. 1.37 billion. Nepal is also exporting green tea from Illam to India (Darjeeling) after 3 years ban. On the flip side, milk has to be imported from India because domestic farmers cannot meet the demand. The DDC is proposing a plan to increase dairy production. Meanwhile, Kailali dairymen are making a killing milking cows. Poultry farmers are also doing a brisk business. In this festival season, while Kathmandu and Pokhara are feasting on an ample supply of goats, chicken and fruits other parts of the country including Humla, Baitadi and Bajura are not so lucky. There is shortage of grains there as paddy production has declined by a whopping 153K tons. The FAO's seeds could be the cause for this catastrophe as the production of pulses have gone up at the same time. Low grains supply has forced the NFC to issue a global tender for 20,000 tons of rice. The government is set to import 42K of fertilizer and is hiking fertilizer prices by 30% given higher prices globally. A piece of favorable news, Nepal at 56th position is ahead of India and Bangladesh in the Global Hunger Index.

Energy: It appears that companies in the LPG industry are nickling and diming the NOC into a Rs. 1.7 billion loss. The NOC succumbed to tanker operators' demand and resumed imports from leakage-prone Barauni.

Financials: Banks in Nepal continue to do brisk business - EBL, NNF, BoK, NMB. Not surprisingly existing banks are opening new branches (219 added last year) and new banks are joining the frey - Commerz and Trust Bank, Civil Bank, Century Bank and Mega Bank. According to the World Bank Nepal has 4.19 branches for every 100,000 adults. Shangrila Development Bank and Bageshowri Development Bank are merging, the first development banks to do so. This merger comes on the heels of failed NIBl-EBL merger. Another merger, NBB-NSMBL is awaiting regulatory approval. The Rs. 16 billion Nepal Army Fund lacks skilled investment professionals but it has found ways to invest in a Medical School. The SEBON has given green-light to the Indian-financed CDS, a clearing and settlement system following an approval by the MoF. The MoF has also decided to approve mutual fund regulation to facilitate the development of the industry. The NRB is joining a global trend by attempting to cap bankers' salaries. The government is getting serious about money laundering as pressures continue to build. They are clamping down on informal channels and imposing new rules on remittance companies. The government is getting pushbacks on its attempts. The NCC is complaining that restrictions are hurting foreign investment. On a side note, the 45 year old RBB held its first ever AGM.

Hydropower: The NEA is planning to increase electricity tariff by 30% to close its deficit. But importing Rs. 24 million of electricity from India for Nepalgung alone during 2009/10 is not consistent with that goal. Small hydro developers are lamenting about the low PPA rate structure which they argue is discouraging investment. But new small-sized projects are being developed in spite of such protests. The 2.17MW Mahesh Khola is the case in point. Despite Maoist threat to obstruct 14 Indian-owned hydro projects, 7 mega project including 5 with Indian participation is signing the PDA with the government. Another mega project, the 880MW Tamkoshi III is starting construction in 2012.

Infrastructure: The first 6-lane road in Nepal has opened for service and 5 more are planned. Meanwhile, works on the Outer Ring Road Project has stalled owing to opposition by the locals. The 1,764km Mid-Hill Highway is set to finish this year. The ADB is giving a grant of USS$49 million for the Sub-regional Transport Enhancement Project. The government is considering PPP to encourage investment in roads. TIA is over-load, handling 41 aircrafts/hour instead of its optimal capacity of 30 per/hour. To compound its problem, there was a conveyor belt incident. The legendary Mugling Bridge is in dis-repair. The goverment is taking over the Kakarvitta dry-port after failing to lure private management companies.

Labor: Remittance growth slowed to 10.5% in 2009/10 despite a 35% increase in labor outflow. Sending Nepalese to Japan under JITCO has hit a snag due to lack of skills. Nepalese going to Korea under EPS can only work in manufacturing sector for the same reason. Afghanistan is trying to curtail the role of Nepalese working in private security companies. Malaysia has stopped taking in Nepalese maids. The government is looking into regulate labor going to the Gulf more tightly given a raft of abuse cases especially domestic workers - one way is to stop people from going there on visitor visas. The government also wants to regulate how much manpower agencies charge for their services. SOS Manpower is the top dog in the manpower industry. On the domestic front, labor-management conflict has erupted at the Fulbari Resort and Spa in Pokhara.

Manufacturing: The Birgung-Pathlaiya has been running smoothly for the last nine months but not Nepalgunj. The largest clinker factory in the country has opened in Rupandehi district. Looks like the domestic shoe industry is doing brisk business. Debt-laden Janakpur cigarette factory is back on service. China has surpassed India with the largest numbers of JVs in Nepal in 2o09/10. Garment industry is not quite dead yet. It exported Rs. 4.5 billion in 2009/10. India' Liverpool retail is taking 33% stake in Momento Apparel, Nepal's largest ready-made garment manufacturer for IRs 200 million.

Media/Entertainment: Unregistered foreign channels with "indecent" content is flourishing in Nepal and authorities are trying to crack it down. Kollywood grossed Rs. 350 million last year from 59 films. On the branding side, the comedian duos Ma-Ha are the new faces of Western Union in Nepal.

Real Estate: The NRB's new directive appears to have given a renewed boost to the housing market although that's not so clear - realty transaction in Kathmandu is down 49%, and in Pokhara it is down 60%. Platinum Developers' 500 apartment Soaltee City project is in offing. Land owned by Guthis of former royals will be annulled and properties of the late King Birendra are going to go into a Trust.

SOEs: The government is ready to off-load NAC to the private sector. A divestment of the government's 30% stake in ADBL is also in the pipeline. More than a dozen years and Rs. 100 million later the Rastriya Beema Sansthan has stopped "incentive allowance" .

Telecom: The NTA wants to connect all 75 district with fiber optics within 3 years. GSM users in Nepal are up a whopping 92% to 6.9 million; 3.96 million use NT and 2.94 million use Spice Nepal. Ncell, which is owned by TeliaSonera along with Spice Nepal plans to invest US$100 million in 2011. NT's bid to award contracts to ZTE and Huawei has drawn attention of the CIAA. Internet users are up 160% to 1.35 million. The NTA has made ID mandatory in internet cafes to curb online crimes. Take this Google, Nepal has its own search engine, ebuzz asia.

Tourism: Tourism in September was up 20% year/year. Pokhara also saw an increase of 20% in tourist visits. Oman's air became the 27th international airline to service Kathmandu. India's low-fare SpiceJet has also commenced Kathmandu-New Delhi service. Two Malaysian airlines are set to start flying to Nepal. Nepalese government is encouraging Chinese airlines to join the frey. State-owned NAC plans to add to its fleet despite recurring controversies. Recently one of its two Boeing aircrafts used for international flights was grounded causing cancellation of half of the schedule flights. Ghorepani is getting a tourism boom and "homestay" is becoming popular in Panchase region in the mid-west. Locals in Upper Mustang have lifted restrictions on tourists from visiting their areas. The tourism conglomerate Yeti Group has taken 49% stake in Gokarna Forest Resort for Rs. 760 million. Oriental Hotels, the owner of Radisson Hotel, earned Rs. 51.4 million last year.

Personalities: Dinesh K Chuke, a Chitwan-based entrepreneur is making a big splash in his hometown.

Interesting Tidbits: An interesting story on the legendary Ranjana Film Hall.

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