Wednesday, February 7, 2018

National Assembly polls in Nepal today and more

From The Kathmandu Post: Polls for 32 Upper House seats today. The new constitution adopted in 2015 envisages a bicameral parliament. Elections for the House of Representatives were held in November-December last year. The election authority said the vote will clear the way for it to announce the results of the House of Representatives under the Proportional Representation (PR) category.

In the 59-member NA, elections are held for 56 seats while the remaining three are appointed by the President on the recommendation of the government. Eight each are elected from one province—three from women’s quota, one from Dalits, one from disabled or monitory communities and three others from the open category.

As many as 83 candidates from 13 parties had filed their nominations. Six of them have withdrawn from the race, the candidacy of one was revoked while 24 were elected unopposed. This has left 52 candidates vying for 32 positions, according to the EC. All the eight members were elected unopposed in Province 2, requiring no elections there. Although there are 2,056 voters in total, only 1,677 will cast the vote with polls not required in Province 2. There are 443 Provincial Assembly (PA) members and 1,234 local government representatives as voters. The vote of a PA member weighs 48 while that of a local unit representative has a value of 18. 

The country had a unicameral legislature after the Interim Constitution was authenticated on January 25, 2007 until the dissolution of Legislature-Parliament on October 14, 2017.

Antonio Nucifora and Martin Raiser write on Future Development blog: Brazil finds itself once again with a big fiscal deficit and rapidly rising public debt. A team from the World Bank set out to answer these questions with a comprehensive review of public spending in Brazil. The new report, A Fair Adjustment, concludes that much of Brazil’s public spending benefits the relatively well off more than the poor, so there is room for serious fiscal adjustment without harming those most in need of government programs.

A fair adjustment would reduce transfers to the better off, and could preserve—even increase—spending on such programs. A fair adjustment would mean changing things in three areas: public pensions, government salaries, and benefits for big business.

Public pensions: The biggest source of savings is the country’s public pension system, which ran a deficit of nearly 4.5 percent of GDP last year. Brazil spends a lot more on social security than countries with much older populations. More than one-third of this gap is because of generous benefits to the richest 20 percent; more than four fifths of the deficit accrues to the top 60 percent.

Government salaries: Another way would be to cut back on public sector pay which is 70 percent higher than private sector wages; the OECD average is 11 percent. Tax exemptions, interest subsidies, and direct transfers to business are a third area of potential savings. At 4.5 percent of GDP in 2016, they are almost 10 times the spending on Bolsa Familia. Brazil has been an innovator in social policy: Conditional cash transfers—which aim to reduce poverty by making government help contingent upon receivers’ actions—were first introduced in Brazil. But while Brazil’s Bolsa Familia program is internationally acclaimed, it accounts for just half a percent of GDP.

Benefits for big business: Government benefits for the better off are also provided as tax benefits for private health insurance and in free public higher education, attended mainly by students from wealthier families. 

All in all, A Fair Adjustment report identified programs totaling some 8 percent of GDP, which could be cut back without hurting the poor. The savings could be used to restore fiscal balance and secure spending on tested social transfers and critical infrastructure investments.

SC issues interlocutory stay order in Sumargi case

From myRepublica: The Supreme Court on Tuesday issued an interlocutory stay order in favor of businessman Ajaya Raj Sumargi, allowing him to use Rs 2 billion which was transferred from a foreign bank and subsequently frozen by  Nepal Rastra Bank. A single bench of Justice Tej Bahadur KC issued the order on condition that the amount would not be taken to any foreign country and it would not affect a money laundering case involving the amount.

Stating that there was no valid ground to stop the amount from being used, the apex court has also said that  the decision of the central bank to freeze the amount was having an adverse effect on Sumargi's industrial activity. A total of Rs 12 billion was transferred to the accounts of different companies owned by Sumargi from the countries including Mauritius, Cyprus and other countries in 2010 as foreign direct investment. An amount of Rs 8 billion was already withdrawn from the bank accounts of Nepal Investment Bank Limited and Nabil Bank while the order allows Sumargi to use Rs 2 billion. Another Rs 2 billion still remains frozen in the bank accounts. 

The Nepal Rastra Bank had frozen the amount citing the lack of valid source of income for it.  Seeking the intervention of the apex court, Subas Chandra Paudel, the authorized person of Nepal Satellite Telecom Pvt Ltd had moved the apex court on Sunday with the writ petition.

Energy Min mulling to dump deal with CTGC

Bibek Subedi writes in The Kathmandu Post: The Energy Ministry has been mulling to scrap the contract signed between the Nepal Electricity Authority (NEA) and China Three Gorges Corporation (CTGC) for the development of the West Seti Hydropower Project after the Chinese company threatened to pull out from the deal unless the state-owned power utility revised the power purchase rate. Last December, CTGC wrote to Investment Board Nepal (IBN) saying that it would drop the project if the NEA didn’t revise its guideline for the power purchase rate. 

The Chinese company has said that the rate offered by the guideline doesn’t make the project bankable. According to the guideline, reservoir-type projects like the West Seti will get Rs12.40 per unit during the dry season which lasts from December to May, and Rs7.10 per unit during the wet season which lasts from June to November.