Tuesday, September 18, 2012

Links of Interest (2012-09-18)

Promoting social mobility (Equity and efficiency can be achieved by focusing investments in the early years, while also following up with later investments.)

Lesson from Japan: Do low interest rates boost growth? (Supply alone won't do anything if there is no demand for it. Low rates hardly boost "private demand, private risk-taking or entrepreneurship" if the economy is largely dependent on revenue externally, i.e. from exports, where economic conditions have nosedived.)

The private sector body also said the existing policy does not address the risks inherent in engaging the private sector in the farm sector and as a result, the country has not been able to take advantage of the opportunities in the agriculture sector. NCC urged the government to bring a policy that facilitates both the private sector and farmers to market access, provide loans in nominal interest rates, set up organic and chemical fertiliser factories, among others.
IRs 100 = NRs 168 in informal market (Officially, NRs 1.60 is pegged at IRs 1. The main reasons are high demand for IRs arising from increasing imports and cross-border smuggling of IRs.)
Traders attributed this surge in IC value in the black market to increasing smuggling of goods that created shortage of the currency. They said smuggling of sugar, food items, readymade garment and shirting and suiting, among others, has surged ahead of the festivals. Smuggling of motor parts, hardware and electronics are also on the rise.
The Nepal Electricity Authority (NEA) has selected 10 storage-type hydropower projects with a collective capacity of 2,652MW to carry out a feasibility study. The 10 projects are among the 31 projects approved by the Japan International Cooperation Agency (JICA) for further study. NEA had conducted a pre-feasibility study on 65 projects last year under the funding JICA, of which 31 projects were approved, NEA officials said.
The 10 projects are Madi Khola (199 MW), Lower Jhimruk (142 MW), Nalsinghgadh (400 MW), Chehera-I (149 MW), Naumure (245 MW), Dudhkoshi (300 MW), Sunkoshi-III (536 MW), Khokhajor (111 MW), Adhikhola (180 MW) and Lower Badhigad (380 MW).
NEA so far has issued survey licences to independent power producers for projects with a collective capacity of 11,645MW electricity, but all the projects are ROR type.
NEA is also studying 14 projects with total capacity of about 4,000MW. Of them, 11 are storage-type projects.
The Ministry of Finance (MoF) has agreed to provide Rs 35.8 million to the Ministry of Commerce and Supplies (MoCS) for providing direct subsidy to state undertakings involved in the supply of food commodities, keeping in view the upcoming festivals. Breaking the tradition of cross subsidy system under which state-owned enterprises were given tax and other privileges to enable them recoup the loss while dealing with subsidized goods, the MoCS first time is providing direct subsidy to public enterprises (PEs). The MoCS adopted new subsidy system after PEs reported loss while trading commodities like rice, sugar, salt and goats, among others, during last year´s festive season.
Under the proposed subsidy, NFC, STC and NTL will have to sell rice, salt and sugar at rates lower by Rs 5, Rs 2 and Rs 5 per kg respectively compared to market price.
Govt fails to implement MRP: Consumer activists termed the move just a 'publicity propaganda'
The government failed to publish maximum retail price (MRP) in Nepal Gazette (Rajpatra) today, as it has promised. Ministry of Commerce and Supply Management has promised to publish it today in the Gazette that could ensure the implementation of the MRP from today.
“There has been not any preparation to publish it in the Nepal Gazette ,” said secretary of the Ministry of Law, Justice, Constituent Assembly and Parliamentary Affairs Bhesh Raj Sharma.
“No file has reached the ministry related to maximum retail price,” he added. According to the process, concerned ministry should forward the file to Ministry of Law, Justice, Constituent Assembly and Parliamentary Affairs to publish notice in the Gazette.
According to the Clause 1 of Essential Commodities Control (Authorisation) Act 1961, the government decision on maximum retail price becomes effective only after the publication in Nepal Gazette.

Economists celebrate trade not only because they love watching ships cross the Pacific and cargo planes land at Paris Charles-de-Gaulle but also because increased trade demonstrably raises income and improves living standards. This column argues that a powerful way to boost trade is by focusing on trade facilitation, i.e. improving both hard infrastructure like ports and railways, and soft infrastructure such as shipping logistics.