The South Asian Association for Regional Cooperation (SAARC) on Wednesday announced the formal enforcement of the South Asian Free Trade Area (SAFTA) agreement after all the member countries ratified the agreement on national levels.

Talking to Nepalnews on Friday, one of the directors of the SAARC secretariat informed that the announcement was made on March though the SAFTA agreement came into effect from Jan 1 2006, after all the member nations completed national procedures for the regional trading regime.

The agreement on SAFTA was signed in Islamabad during the 12th SAARC summit in January 2004, and all the member states have since completed all formalities including ratification, he added.

All the necessary procedures for implementation of SAFTA would be completed by Jan 1 2016.

The first round of customs duty reduction will take place as agreed by the member states in July/August 2006.

As per the SAFTA agreement, developing countries will bring down their customs tariff to 20 percent while Least Developed Countries (LDCs) countries will bring it down to 30 percent during the first phase between 2006-2008. Non-LDC nations will bring down tariff level to between 0 and 5 percent by 2009 while LDC nations will do so by 2016.

National Coalition for Children as Zones of Peace (National Coalition of CZOP) has urged all not to detain children as per the national and international humanitarian laws.

A press statement issued by the National Coalition of CZOP on Friday said the coalition is concerned over the report that one 15 year old child Hari Bahadur Budha was found in army detention and urged all concerned parties to initiate effort for his release and not to repeat such incidents in the future.

The National Coalition of CZOP also stated that the act is a clear violation of various treaties related to child rights in which Nepal is a party.

Meanwhile, the National Coalition of CZOP also requested media not to transmit information related to violence with priority saying it will affect child psychology.

The government on Friday released Hridayesh Tripathi, general secretary of Nepal Sadbhawana Party-Anandidevi (NSP-A), following a Supreme Court (SC)’s order.

A special SC bench of justices Gauri Dhakal and Rajendra Koirala ordered the authorities to release Tripathi, saying there was no valid reason to prolong his detention.

Tripathi was in government detention from January 19, a day ahead of the proposed mass meeting of the seven-party alliance in the capital.

Talking to journalists upon being released Tripathi said, “There is no alternative to going to constituent assembly elections to resolve the present political stalemate of the country.”

At least two policemen were killed when Maoist insurgents attacked a Ward Police Office in Janakpur Friday afternoon.

Reports coming in say dozens of heavily armed Maoist rebels, who came on a jeep, stormed the Ward Police Office located at Mujaliya area at around 5:00 p.m. Eyewitnesses said at least two dead bodies of policemen were seen in the incident site.

The casualty on the Maoist side is not known, reports added.

Details of the incident are still awaited.

The Maoist-affiliated Nepal Dalit Liberation Front has called off its nationwide bandh (shutdown strike) scheduled for March 30.

Issuing a press statement on Friday, Tilak Pariwar, chairman of the Front, announced to withdraw the bandh in order to make effective the nationwide protest programs called by the seven political parties from April 6 to 9.

The parties had announced the general strike following a release of the second Memorandum of Understanding (MoU) with the CPN (Maoist) recently. The Maoist leadership also called off its blockades imposed in the capital, Kathmandu, and district headquarters.

The Front said it would support the seven parties’ protest programmes.

Home minister Kamal Thapa has said the government would not hesitate to take any kind of action against the political parties if they do not withdraw their agreement with the Maoists.

Speaking at the inaugural function of the 12th convention of the Kathmandu Municipality Council in the capital on Friday, Thapa said the parties have been pursuing the Maoist agenda and that the government would not remain silent if the agreement were not canceled. “What has been publicized as the second understanding is nothing but the Maoist agenda. The parliamentary parties committed a blunder,” he said.

Thapa said there was no difference between the parties and the Maoists’ activities in recent days

He claimed that the government was poised to foil the 12-point agreement signed between the seven parties and Maoists. He said that the understanding has further intensified conflict in the country.

“Government will never reach to an agreement with the terrorist groups,” he said.

Seven parties, in their renewed understanding with the rebels, said they were ready to restore peace and democracy in the country and bring the rebels into the political mainstream.

Meanwhile, reports said Thapa received an audience with the king on Friday. In the two-hour long discussion with the king, Thapa is learnt to have explained the security situation of the country.

National and international media experts have said that the press freedom in Nepal has worsened after the royal takeover of February 1, 2005.

Presenting a paper at the National Conference organised by Federation of Nepalese Journalists (FNJ) in the capital on Friday, senior journalist Ram Krishna Regmi said the government’s intentions has been to close down all independent media bodies through economic blockade.

He said the one-door advertisement policy of the government has forced hundreds of newspapers outside the Kathmandu Valley to closure. “This will be applied to all those private media houses which at present have been benefiting from the government policies,” he said.

Regmi added that the government is inclined towards creating financial crisis and make media outlets unable to survive, Regmi added.

Director of Media Services International (MSI) Hem Bahadur Bista said that journalists in Nepal have been working in a dangerous situation as the conflict rages on in the country. “Journalists don’t even have good shoes or clothes to wear when they have to travel to remote parts of the country to collect information,” he said.

Speaking at the conference Jesper Hojberg, director of International Media Support said that international mission would give particular attention to the district journalists as they are the most affected and promised to provide continuous support and solidarity to press movement.

Editor of Deshantar weekly Kabir Rana said weekly newspapers were the most affected by the present government’s policies. “It is very hard for weeklies to survive these days,” he said.

President of FNJ Bishnu Nisthuri said the federation was committed to fight against the repressive policy of government.

Similarly, Sunanda Deshapriya, Asia representative of International News Safety Institute highlighted various safety measures that journalists have to bear in mind while reporting in conflict areas. He emphasized on awareness and training programs to the journalists about safety measures.

Marcelo Solervicens of AMARC, Jacqueline Park from IFJ, Mark Bench from World Press Freedom Committee and Shailesh Kataria from Article 19 and senior journalists Yuvraj Ghimire, Kunda Dixit and Prateek Pradhan also expressed their views in the program.

The conference was attended by all the members of international media mission, which is currently in Nepal.

The mission will wrap up its Nepal visit on Saturday.

Nepal now needs to break the double trap of poverty and conflict simultaneously

By Shiv Raj Bhatt

Despite the mass poverty, Nepal used to be recognized until a few years ago as a ‘Peace Zone’ by most of the friendly nations and people around the world. However, the country is now gripped in double trap of poverty and conflict these days. Poverty and efforts to alleviate it is not a new phenomenon, but the armed conflict in Nepal is.

With support from the donors, Nepal has introduced many plans and programmes with very impressive objectives, strategies and instruments to break the vicious circle of poverty. But with poor implementation, lack of transparency and system of monitoring and evaluation along with poor governance and rampant corruption, results are not as desired.

As a multidimensional phenomenon, poverty alleviation needs a lot of efforts – committed, well planned, and rigorous. To break poverty trap we should first identify its root causes. In Development Economics, the concept of ‘vicious circle of poverty’ simply says ‘a country is poor because it is poor’. A beautiful explanation of a multidimensional concept in merely eight words nicely reflects the reality of poor nations. The vicious circle of poverty is strong enough to produce many other vicious circles- creating a domino effect. We Nepalis are poor because of our poverty. But the important question arises- is it possible to break the trap? If yes, how? What could be the economists’ prescription?

The textbook solution is very simple- we have to increase investment that provides us employment as well as income in order to lift us from the poverty trap. But the same textbooks further say that higher investment requires higher saving that again needs a higher income level.
The textbook solution is very simple- we have to increase investment that provides us employment as well as income in order to lift us from the poverty trap. But the same textbooks further say that higher investment requires higher saving that again needs a higher income level. How is higher saving possible in a country like ours where the majority of people do not have enough resources to fulfill their basic needs? Moreover, increasing savings and investment is a daydream when the possible saving agents (the people who earn more than they spend, mostly the business people with few others) are in debt trap (as the name of “black listed” big business peoples recently published in news reports show).

Our policymakers have an alternative solution, foreign aid. In the name of poverty reduction, vast resources have been disbursed in the past. But it hasn’t helped much due to wrong targeting and lack of transparency. As a result problem of poverty is still with us-it has only intensified. Intensified vicious circle of poverty leads to the vicious circle of conflict. Therefore, Nepal now needs to break the double trap of poverty and conflict simultaneously.

Many factors- religious, ethnic, political, and most importantly economic determine conflict. Statistics from all over the world show that war/conflicts and poverty are closely linked, and civil war is more frequent in countries where the poverty is massive. In Nepal, remote and backward areas where poverty is massive are highly affected by conflict. On the basis of this fact one can argue that there is a positive link between Nepal’s poverty and conflict. Therefore, an answer to poverty and development of underdeveloped areas is a must to solve the crisis.

Breaking the conflict trap needs many new and innovative approaches that also address the poverty. The most important are: (i) elimination of root causes, basically grievances such as inequality and discrimination; (ii) removal of secondary causes (catalyst) that fueled the problem such as political instability, corruption and bad governance; and (iii) mainstreaming of rebels (insurgents). All of these call for a multidimensional approach that range from economic, fiscal, political, and social to moral.

Fiscal dimension is the important one. Historically and empirically, fiscal policies are observed and proved as one of the most important instrument of poverty reduction and conflict management in the hands of any government. Therefore, to overcome dual trap of poverty and conflict, simultaneously, a prudent fiscal policy that includes progressive taxation, huge expenditure in social priority sectors, reduction in unproductive expenditure, corruption control and targeted poverty reduction programs are required in Nepal. Unfortunately, development work has come to almost halt and security and other unproductive expanses are on the rise in Nepal. Will all these lead to road of peace and prosperity in sustainable way? Not at all, as deepening crisis shows.

(Bhatt is a development economist based in Kathmandu. Please send your comments/suggestions to [email protected] or [email protected])

(Editor’s Note: Nepalis, wherever they live, as well as friends of Nepal around the globe are requested to contribute their views/opinions/recollections etc. on issues concerning present day Nepal to the Guest Column of Nepalnews. Length of the article should not be more than 1,000 words and may be edited for the purpose of clarity and space. Relevant photos as well as photo of the author may also be sent along with the article. Please send your write-ups to [email protected])

By DR. TILAK RAWAL

Conflict-devastated Nepalese have started deriving some solace after listening to somewhat softened observations of stalwarts of current regime. It is gratifying to find conciliatory notes in the observations of people who until recently repeatedly suggested imposing a ban on political parties and their activities. The sharp criticism of political parties by them was reminiscent of pre-1990 three decades of party less panchayat system when political activities by parties were banned and anyone found sympathetic to leaders and parties was attacked as an anti national element. Indeed, a pleasant surprise that even some of the ministers, who never missed out on ridiculing leaders, have emphasized dialogue between the monarch and the agitating parties to resolve the crisis.

Notwithstanding incessant sharp criticism of current dispensation by political parties and declaration of further protest programs, it would not be too much to expect political leaders to declare moves of rapprochement and reconciliation. The monarch has shown flexibility and a remarkable change in the attitude of some propagandists of current dispensation is also observed. Indeed, one had to struggle to find conciliatory notes in the monarch’s address given on the completion of one year rule, which was branded by parties as a futile attempt to justify the direct rule. The royal address of democracy day, however, abounded with conciliatory expressions and looked a positive departure from the earlier stand.

It seems the Narayanhiti doors are open to all political parties and their respective leaders. The big question, however, is how are these noble wishes going to be actualized? So that the sincere wishes do not remain a mere wishful thinking, concerted efforts from the concerned quarters are necessary to build further on the platform offered. Issues related to municipal elections have been rightfully forgotten as the parties in dispute have now many important agenda to concentrate on.

Indeed, a debate on whether the polls were successfully held or they ended in a fiasco does not merit attention of Nepalese who are desperately awaiting return of normalcy in Nepal . There are very good reasons to believe that the main object behind monarch’s experimentation with different governments including the current one was to restore normalcy and hold much awaited elections. Since every government in the past was given time to fulfill the task that it was charged with, the current government’s performance must also have been evaluated after passage of reasonable time period.

While peace thirsty Nepalese thought, encouraged as they were by the impressive speech of February 1, that direct rule would definitely bring peace to the country, the selection of people to discharge the challenging responsibility, however, prompted many to conclude that the monarch was trying to negotiate a stiff climb with a cabinet load of unhealthy subordinates on shoulder. The powerful impression that the takeover speech made on majority of Nepalese was momentary as the constitution of government the next day and its periodic reshuffle thereafter contributed to the rapid erosion of confidence that the royal proclamation of February 1 had built.

Talking of the evaluation of current dispensation, it can be safely observed that it has a mixed story of failure and some success to reveal. On the peace front, the situation of relative quietness, no bombs and not much killing, that emerged soon after take over and is continuing till date in the Valley is definitely an improvement over the situation in the past. This situation of relative calmness, however, could not be extended to other areas where people experienced some semblance of peace only during the four months of unilateral peace declaration by the Maoists, the period that happily coincided with the annual festivals of Dashain and Tihar. Neither the Maoists have come to the negotiating table nor do they appear militarily weakened in a significant manner.

As the experience elsewhere in the world shows that force is used to bring parties in disagreement to agreement, which again is the result of table talks that are held after the military intervention. With the exception of a few cases such as British military intervention in Falkland to settle the ownership dispute with Argentina, in most cases use of force in recent times has not succeeded in providing the final solution to a problem. It may also be mentioned that NATO’s firepower led to quick ouster of former dictator Milosevic who recently died in his cell while being tried for four years by International War Crime Tribunal in The Hague .

In the past, it took US forces only thirty days to effectively counter Saddam’s aggression in Kuwait . More recently, American-led multilateral forces succeeded in dislodging Saddam quickly, contrary to the belief of many observers, but let us not forget that the Iraqi problem is far from over: formation of a unity government after the parliamentary polls has not been possible. The road that the Americans have decided to walk in Iraq is not a smooth one, President Bush has recently confessed. Iraq is bleeding, admits, US envoy to Iraq . Numerous examples can be cited to conclude that military intervention is only an intermediary tool.

Chief of the armed force of Nepal has gone on record in the past stating that army was constitutionally used to bring the rebels into mainstream politics. What can be inferred from this statement of general Thapa is that the goal of military intervention in Nepal is to help feuding parties reach a point of settlement and the object has never been to completely wipe out the rebels of Nepalese origin.

We have had enough of war and the time now is to talk and actualize peace. Let us refrain from sowing conflict and increasing confusion. Therefore, what is the harm in letting current ministers boast that they could hold municipal polls in a difficult situation, securing 20 percent turnout. Indeed, in the face of effective boycott of polls by the agitating parties and Maoists vowing to make polls a total failure, it was an uphill task for the government to find adequate number of candidates for the positions lying vacant and to persuade people, no matter how small a number it was, into casting their ballots. Very rightfully, issues such as how many positions have been filled and how many elected officials have gone into hiding have now been relegated to oblivion This issue does not merit serious attention of political leaders faced with more important challenges of conflict resolution and then mending the torn nation and the economy.

Convergence of divergent opinions can be made possible in the greater interest of the nation and its people. Of late, rebels have shown some flexibility of political nature, palace appears flexible and people would definitely expect their leaders not to lag behind in creating a conducive environment for restoration of peace. Let us also not take interest shown by friendly nations as interference in our internal affairs as long as the utterances and actions of our friends are well intentioned. If we had no problems, we would definitely not tolerate foreigners professing unnecessarily. Because we have serious problems at home, we need assistance, both technical and financial, from multilateral and bilateral fronts as has been the case in other trouble- torn nations such as Sri-Lanka , Afghanistan , Sudan , Congo , etc.

The Norwegian brokered ceasefire in Sri Lanka is still on, despite fear of collapse, but the huge money on offer is yet to be delivered by the donors because there has been no substantial progress in peace talks there. There is no harm in accepting conditional inputs as long as they augment welfare of the nation and its people, which can be possible through creation of assets and its justifiable distribution. To create wealth and welfare, we have to make sure that a proper environment prevails to effectively use available resources.

Notwithstanding some differences of opinion amongst friendly nations of Nepal such as US and UK on the twelve point pacts inked by the parties and the rebels, the unanimous opinion of outside world has stood in favor of resolution of current problem through dialogue and negotiations. In retrospect, it is seen that these powerful nations have worked jointly achieving varying level of input (military intervention) output (restoration of normalcy) ratios in conflict- torn areas such as Afghanistan, Iraq and Darfur region of Sudan to name a few. Let us benefit from the inputs of friendly nations and agencies. What is the harm in getting meaningful inputs from a dozen friendly nations?

A rumor is also going on that the monarch is likely to offload the burden assumed in a difficult circumstance in favor of someone soon. Nepalese would be interested to see that the person chosen to lead the government has a clear vision and succeeds in bringing the parties and the palace nearer and then approach the rebels for a much longed meaningful result. The change this time has to be meaningful because Nepalese want no patch work: they are least interested in watching who succeeds in maneuvering his or her way into position of power and influence because they are tired and sick of such activities in the past. The attitude of indifference that is slowly but dangerously developing amongst people should not take alarming proportion.

Maoists may also wish to realize that they have established themselves as a military force, delivering crippling blows to ill-equipped government security personnel in the initial years of conflict and not easily succumbing now to the power of joint security forces. However, to be considered a political force nationally and internationally, they will have to shun violence and take resort to democratic norms and procedures. Maoists may also wish to refrain from activities that tend to make the life of common man miserable because guns can not be taken resort to indefinitely to garner mass support. With flexibility shown by different quarters and conciliatory notes flowing from some, it seems the opportune moment has arrived to start something meaningful this time. Therefore, without inordinate delay, a unifier is needed to bring different forces to the table.

(Dr. Rawal is a former governor of Nepal Rastra Bank)

By Pratibedan Baidya

Amid reports that Maoists are demanding huge amount of “donations” from joint venture banks and financial institutions in the country, Nepal Bankers Association (NBA) has issued an appealed urging people not to approach banks for any kinds of donations.

A public notice issued by the NBA on Tuesday said that banks collect money from the depositors and mobilize it in different sectors. Banks have to pay the money to the depositors as and when they demand it, so they can’t provide money to anyone as donations or assistance, the NBA said.

Stating that the Nepal Rastra Bank—the central bank in the country– closely monitors their activities and the banks make public their financial reports every three months, the Bankers’ Association said it did expect anybody or institutions demand for such assistance or donations from banks.

Despite repeated calls from Nepalnews, Radhesh Pant, president of NBA, could not be reached for comments. But talking to us on condition of anonymity, officials at the NBA said the Association had issued the statement as bankers in the country were approached to provide donations from time to time from different sectors. They, however, refused to comment on whether the latest public notice by the NBA was in response to the Maoists’ spree to raise “forced donations.”

Sources, however, revealed that NBA’s public notice came after joint venture banks complained that they were being asked for “huge donations” by the rebels over the past few weeks. A source revealed that local unit of the Maoists demanded Rs one million from a Pokhara-based branch of a leading joint venture bank. “Our manager level staff regularly receive threatening calls from the rebels and we are worried about their safety as well as of possibility of armed raids from the insurgents,” a leading banker told us on condition of anonymity.

On Monday, a team of senior army and police officials visited all the commercial banks in Nepalgunj and asked them to further strengthen their security measures. The visit came days after Maoist insurgents raided Karnali Development Bank in Nepalgunj in broad day light and looted Rs 1.8 million.

Talking to Nepalnews, Hari Prasad Koirala, manager of Nepal Bangladesh Bank Nepalgunj branch, informed that the security team inspected the office and received information about the internal security of the bank.

Likewise, Deputy Superintendent of Police Basanta Kumar Lama, one of the members of the security team that visited the banks in Nepalgunj informed that they visited the banks to review the security arrangements of the bank and to better coordinate to avoid any untoward incident.

He informed that they had advised some banks to improve security arrangements, adding that security has been beefed up in the city to avoid any such incidents.Nepal Bank Limited, one of the oldest banks of the country had shifted or merged its 104 branches across the country due to the security challenge.

According to officials at the Nepal Bank Limited, 29 branches of the Bank had been affected from various insurgency

related events.

Cash and property worth nearly Rs 250 million has been looted from the NBL after the onset of the Maoist insurgency.

Similarly, spokesperson of the Rastriya Banijya Bank, Janardan Acharya, said that Maoists have looted property worth 160 million rupees from various branches of the Bank over the past few years.

The RBB has closed a total of 20 branches over the last three years mainly due to security reasons.

Though no businessman has come forward so far saying that he or she has been approached by the rebels “for donations,” privately they admit that they are indeed receiving calls for “donations.”

Industrialist Rajendra Kumar Khetan said that activities of the Maoist affiliated trade union had increased rapidly in the recent days, which had affected the whole business sector. He did not elaborate.

He said that such activities will have not only financial but also social and mental effect, which will hamper the production and growth of the economy in the country.

Despite repeated attempts, Nepalnews could not get response from the security bodies regarding the problem of extortion being faced by the business enterprises including financial institutions.

On Wednesday, two security personnel, three rebels and a civilian were killed when a group of rebels attacked a security team that was providing cover to a vehicle carrying cash from the local branch of RBB to the local security base. The authorities said the rebels, however, could not loot the money. Most of the banks in the districts deposit their cash at the local security bases for security reasons.

A study conducted by the International Crisis Group (ICG)—a Brussels-based think tank—says the CPN (M) is Nepal’s richest political party. In its study entitled “Nepal’s Maoists: Their aims, structure and strategy” published in October last year, ICG quotes a report saying that between February 1996 and May 2003 alone , the Maoists are estimated to have seized over USD 4.6 million in cash and precious metals.

In early 2002, a former Maoist district commander estimated that the rebels needed to spend Rs 10 million every month to keep the war going. This did not include political or administrative expenses, and the movement has grown significantly over the last four years.

“Despite a crackdown on Maoist fundraising since February 2005, extortion continues,” said the ICG report. “Funding a movement of the size and geographical extent that the Maoists have created is not easy but there is no sign that a lack of income alone will prove a decisive factor in weakening the insurgency,” it concluded.