Nirnaya Bhatta

Synopsis

With the South Asian Association for Regional Cooperation (SAARC) effectively sidelined politically, a number of mechanisms under its purview that were mandated to address cross-border disasters have also taken a hit. Against such a backdrop, this Research Commentary (RC) brings in focus the recurring flooding that seriously disrupt livelihood in South Asia and has claimed the lives of 2000 people on an average in the past 2 decades every year. This RC underlines that there is no way around cross-border infrastructure, or at least a transnational system of regulations on the rivers, with an emphasis on digital infrastructure that allows for information sharing between concerned government. It provides suggestions on what could be done at both the regional and national level and concludes that meaningful action can be made through cross-border digital infrastructure that keeps at the centre a three-layered mapping-approach (described in detail below). 

Introduction

Rivers have nurtured all major civilizations, but they have also brought immense misery to dwellers living along them during floods. Today, millions of farmers along the Ganges basin keenly welcome the monsoons for irrigation every year. But recurring flooding is an inherent feature of this part of the South Asian landscape, which has claimed 2000 people on an average in the past 2 decades every year.

The magnitude of this recurring disaster is informed by both the number of people it affects and the intensity of the damage it brings (paralyzing an entire region). Even though it is anticipated almost every monsoon, governments have failed to address it in any meaningful manner, giving this crisis the distinction of a typical wicked problem.

The Policy Problem- A recurring flood and lack of cross-border mechanism

In August 2017, South Asia witnessed the worst floods in decades, affecting nearly 45 million people. A reported 16 million in urgent need of basic life support were children. This RC documents a cross-border natural disaster that escalated into a humanitarian crisis largely due to the failure of the respective governments to collaborate and respond effectively. Although, it should be acknowledged that, while the floods are usually anticipated, its magnitude is usually unknown.

Source: Office for the Coordination of Humanitarian Affairs (OCHA). As of September 01, 2017 (People affected- in millions)

On September 2, Red Cross announced it was the worst flood facing South Asia in 4 decades, with 1/3rd of Bangladesh submerged. The river and its numerous tributaries that flows from the Himalayas downstream into India and Bangladesh (that has an average elevation of 85 meters above sea level) are forces to reckon with. Further, with destruction of millions of hectares of agricultural lands, while it severely affected food security locally, it also had the potential to disrupt global rice supply chain

The costs on society

In southern Nepal, northern India, and Bangladesh, the floods inundated thousands of villages, natural habitats, hospitals, and schools. As one of the densest and impoverished regions in the world, people were rendered acutely vulnerable immediately. Evidence suggests that recurring natural disasters perpetuate chronic poverty . Take for instance, the head-count ratio of poverty are consistently found to be higher in flood-prone areas in Bangladesh. The floods pose a serious challenge to development efforts, as they have to operate at the face of immense uncertainty. Sure, the world is increasingly uncertain to natural disasters, but the worst crises such as these occur when governments are inefficient to respond, largely due to absence of necessary infrastructure in place. 

Addressing the Crisis

While there is little scope to preventing the floods itself from occurring, the focus of policy can certainly aim to decrease vulnerability of affected population. To be fair, trans-boundary issues are inherently complex, especially when the policy agenda pertains to bringing together massive infrastructural undertaking. With multiple bureaucracies, interest groups, ambiguities in national responsibilities, contradiction between multiple national and international legal frameworks etc. coherent response to trans-national disasters are challenging. The political-economy of water issues is all the more sensitive because rivers not only accrue multitudes of benefits to nations but are also subjected to concerns of national security- associated with food and state stability itself

  1. Regional Level:
a. To have policies that have a cross-border infrastructure component to them:

Traditionally, disaster management has been under the purview of national governments (Water, Ecosystems and Energy in South Asia Making Cross-Border Collaboration Work- ICIMOD). Against a backdrop of political distrust in the South Asian neighborhood between countries, governments find it difficult to collaborate on any issue.

To break this practice of governments working in solos, there needs to be a shift in how each government perceives the shared-ecosystem and disasters emerging from them. For instance, when the scope of one country’s policy with regard to managing rivers is sharply limited right where its own national territory ends, the shift is approaching these issues for policies could change.

Along these lines, the idea of desecuritization of the South Asian rivers looks promising. Researchers are oftentimes denied data in the name of national security. For example, in India, data on Indus, Ganges, and Brahmaputra rivers is considered classified information. Working in silos to manage rivers purely along national-territorial lines will only expose one’s own citizens to disasters.

b. Functional apolitical institution for disaster management

The grounds for effective cross-border responses starts well-before the floods occur. Since the South Asian Association for Regional Cooperation (SAARC) is highly dysfunctional, an apolitical institution exclusively dealing with disaster management could be established. This will open up possibilities for seamless cross-border data and risk sharing mechanisms, early warning systems, and harmonized national and regional planning etc. Clarity of responsibilities pertaining to the management of shared eco-systems will only be achieved through such an institution, which can clearly designate governments their share of duties. 

  1. National Level

Polices based on localized socio-economic and demographic data

It is often argued that crisis after natural disasters is engendered by poor housing planning and land use codes, and inefficient early-warning systems. To accurately target the affected population, inputs for national policies must be based on localized socio-economic and demographic data. The WB suggests a three-layered mapping-approach that can precisely inform policy so it is capable of mitigate vulnerabilities of the affected effectively. Hazard, exposure, and vulnerability mapping are useful information for policy makers and individuals affected. This underscores the need for an integrated a robust digital infrastructure where information between governments are shared transparently.

Inspired from World Bank’s risk identification framework (World Bank 2012)

Policy implications

Due to the inherent landscape of the South Asian region, floods have a deterministic element to them. The magnitude of effect of climate change on recent torrential monsoon is debatable, but rapid retreat of the Himalayan glaciers (referred to as the ‘water tower of Asia’ that feeds 1.3 billion people) can be attributed to rising global temperatures, which will bring more floods in the Ganges basin. If policy is primarily geared towards finding ingenious ways to mitigate vulnerabilities of the distressed during disasters, populations are known to be resilient in the long run to improve their own life outcomes. There may not be a better way to mitigate vulnerabilities than cross-border collaboration with digital infrastructure at the heart to promote better data and risk sharing mechanisms, early warning systems, and harmonized national and regional planning. When the problem at hand is cross-border in nature, it is only logical that South Asian governments avoid working in silos.

References

  1. Acemoglu, Daron, and James A Robinson. 2012. Why Nations Fail: The Origins of Power, Prosperity and Poverty. 1st ed. New York: Crown.
  2. Amhed, Farid. 2017. South Asia Faces Fury of Floods. IPS. Retrieved from http://www.ipsnews.net/2017/08/south-asia-faces-fury-floods/
  3. Anwar. 2009. “Impact of Recurring Natural Disasters on Chronic Poverty.” Societies Without Borders, 285-301. Retrieved from https://scholarlycommons.law.case.edu/swb/vol3/iss2/5/
  4. Dasgupta, Amrita. 2007. “Floods and Poverty Traps: Evidence from Bangladesh.” Economic and Political Weekly 42 (No. 30): 3166- 3171.
  5. Gelb, Alan, and Julia Clark. n.d. “Identi cation for Development: The Biometrics Revolution.”
  6. George, Steve. 2017. A third of Bangladesh under water as flood devastation widens. Retrieved from https://edition.cnn.com/2017/09/01/asia/bangladesh-south-asia-floods/index.html
  7. Gettlemanaug, Jeffrey. 2017. More Than 1,000 Died in South Asia Floods This Summer.Retrieved from https://www.nytimes.com/2017/08/29/world/asia/floods-south-asia-india-bangladesh-nepal-houston.html
  8. Iceland, Charles, and Betsy Otto. 2017. What Does Water Have to Do with National Security? Accessed from http://www.wri.org/blog/2017/02/what-does-water-have-do-national-security
  9. Johnson, Gordon. 2016. A changing climate throws water out of balance in Asia and the Pacific. Accessed from http://www.undp.org/content/undp/en/home/blog/2016/11/3/A-changing-climate-throws-water-out-of-balance-in-Asia-and-the-Pacific-.html
  10. Muthayya, Sumithra, and Jonathan Sugimoto. 2014. “An overview of global rice production, supply, trade, and consumption.” ANNALS OF THE NEW YORK ACADEMY OF SCIENCES.
  11. Raj, Suhasini, and Jeffrey Gettleman. 2017. They Thought the Monsoons Were Calm. Then Came the Deadly Floods. Accessed from https://www.nytimes.com/2017/09/07/world/asia/bihar-india-monsoon-floods.html
  12. Surie, M.D. 2014. Desecuritizing Transboundary Water in South Asia. 17 September . Accessed from https://asiafoundation.org/2014/09/17/desecuritizing-transboundary-water-in-south-asia/
  13. UNICEF. 2017. 16 million children affected by massive flooding in South Asia, with millions more at risk. 02 September . Accessed from https://www.unicef.org/infobycountry/media_100719.html
  14. World Bank. 2012. Disaster Risk Management in South Asia: A Regional Overview. The World Bank, South Asia Region Disaster Risk Management and Climate Change Unit. Accessed from http://documents.worldbank.org/curated/en/648281468170977802/Disaster-risk-management-in-South-Asia-regional-overview

THE ISSUE

According to the September 2019 briefing Document for the World Bank Board, there were more than 164 million documented international migrant workers in 2018 of whom 68 million were women. Over the years, money sent back home by these migrant workers have been benefiting receiving countries via investments, trade, and transfer of skills and technology. In 2019, remittance flows to low and middle-income countries (LMICs) are projected to reach UD$ 550 billion which is more than three times the total development aid flow to these LMICs.

Remittances have been benefiting migrant workers’ countries of origin in numerous ways. In one of his TED Talks, in 2014, Economist Dilip Ratna has highlighted some of the most crucial aspects of remittance. Moreover, the UN DESA has identified some key facts on why remittances matter for the global economy. Similarly, on the occasion of the International Day of Family Remittance, IFAD has highlighted ten ways in which remittances have been transforming the global economy in meaningful ways. Furthermore, the World Economic Forum notes that remittances are crucial for many of the LMICs and discusses the cases of India and the Philippines. In 2018, remittances accounted for almost three percent and ten percent of GDPs for India and the Philippines respectively.

OUR OBSERVATIONS

For our analysis, we have taken into account remittance inflows data (only) to South and Southeast Asian economies plus China. We have used the World Bank data for our analysis and analyzed data for the years 2000, 2005, 2010, 2015, and 2016 – 2019. Except for Nepal, where remittance inflows for the year 2019 are projected to account for about thirty percent of country’s GDP, no other economies in South and Southeast Asia plus China have a double-digit figure for remittances as the share of GDP for 2019.

Data Source: World Bank (2019)

South Asia

With some exceptions for a few years, overall, remittance inflows to South Asian economies are on an increasing trend. For Afghanistan, we don’t have data for the years 2000 and 2005. In 2010, the economy received a total of US$ 346 million in remittance. For 2018, this remittance inflow figures have increased by about three times and Afghanistan received US$ 920 million in remittances. However, in 2019, remittance flows to this South Asian economy has been projected to decline by about US$ 36 million. On the other hand, Bangladesh had received about US$ 2 billion in remittances in 2000. With a slight decline in 2016, the country had received more than US$ 15 billion in remittances in 2018 and this figure is projected to increase by US$ 2 billion and become more than US$ 17.5 billion in 2019.

From the available data, it seems Bangladesh and Maldives receive small amount of remittances. Though there has not been a substantial increase in the latter’s remittance inflows between 2000 and 2018, the former has improved a lot in terms of the amount of remittances it receives each year. For Bhutan there are no data for the years 2000 and 2005 and in 2010, the country had received about US$ 8 million in remittances. By 2018, this figure has increased by more than seven times and reached about US$ 58 million. For 2019, Bhutan is expected to further improve in this area. On the other hand, Maldives had received about US$ 2 million in remittances in 2000, same as in 2005, and the country had witnessed an inflow of US$ 3 million remittances into the economy. For the years 2016-2018, it had received US$ 4 million each year and is projected to remain constant for 2019.

In the case of South Asia, India has been the largest recipient of remittances for all years considered for this analysis. In 2000, it had received a total of about US$ 13 billion in remittances. The economy saw a decline in the figure in 2016 but it continues to improve the remittance inflows in recent years. In 2018, India had received more than US$ 78 billion in remittances – more than six times the amount it had received in 2000.

Nepal is the only economy in South Asia that has witnessed remittance inflows by more than  eighty times between 2000 and 2018. In 2000, Nepal had received about US$ 112 million in remittance and this figure rose to more than US$ 8 billion in 2018. In 2019, Nepal’s remittance receipts are projected to improve further and become more than US$ 8.6 billion.

Pakistan, on the other hand, have increased the remittance receipts by more than twenty times between 2000 and 2018, i.e., in 2000, the economy had received more than US$ 1 billion in remittance and it has become more than US$ 21 billion in 2018. In 2019, the receipts are projected to further improve and reach almost US$ 22 billion. Finally, Sri Lanka too has been receiving more remittances in recent years. In 2000, it had received a little more than US$ 1 billion in remittances and this amount became more than US$ 7 billion in 2018. In 2019, the amount is projected to increase further and add more than US$ 200 million than the previous year.

Southeast Asia

Brunei and Singapore primarily serve as the key destinations for international migrant workers. As a result, these two economies in Southeast Asia serve as the remittance outflows hubs.

In Southeast Asia; Indonesia, Myanmar, the Philippines, and Vietnam have improved a lot in terms of remittances recipient countries. Between 2000 and 2018, these economies have observed considerable rise in the amount of money that they receive as remittances. For example, Indonesia received about US$ 1 billion remittances in 2000 and in 2018 this amount has become more than US$ 11 billion, an increase by more than eleven times. Similarly, Myanmar had received only US$ 342 million remittances in 2000 and by 2018 it has increased by more than 28 times and reached about US$ 3 billion. For the Philippines, between 2000 and 2018, remittance inflows have increased by almost five times, i.e., remittance inflows increased to about US$ 34 billion in 2018 from about US$ 7 billion in 2000. For Vietnam, between 2000 and 2018, the amount has increased by more than twelve times. In 2000, it had received more than US$ 1.3 billion and in 2018 the amount became US$ 16 billion.

Like Nepal (one of the two landlocked economies in the region) in the case of South Asia, Lao PDR (also a landlocked economy) is the most benefited economy in terms of remittance recipient economy between 2000 and 2018. In 2000, the country had received just US$ 1 million in remittance but it 2018 the amount has become US$ 239 million, i.e., an increase by about 239 times.

Cambodia, Malaysia and Thailand have also seen an upward trend in remittance inflows during 2000 – 2018 period. While Cambodia saw growth in amount by more than eleven times – an increase from US$ 121 million in 2000 to about US$ 1.5 billion in 2018, Malaysia has seen an increase in remittance inflows by about five times between 2000 and 2018 – from about US$ 342 million in 2000 to about US$ 1.7 billion in 2018. Similarly, Thailand has increased the inflows amount by more than four times – an increase from about US$ 1.7 billion in 2000 to about US$ 7.5 billion in 2018.

In 2019, except for Thailand, other seven Southeast Asian economies are projected to further improve remittance inflows into their economies.

China

Like Nepal and Lao PDR, China Mainland is also one of the few economies in the region to increase remittance inflows by a large margin. Between 2000 and 2018, the Mainland has witnessed a growth in remittance inflows by more than 88 times. In 2000, it had received about US$ 758 million but this amount became about US$ 67.5 billion in 2018. However, the trends for Hong Kong SAR and Macao SAR are not encouraging.

For Hong Kong, the growth in amount has been minimal between 2000 and 2018, i.e., a growth by just about three times. However, for Macao, though the amount  for 2019 are projected to improve, this Chinese Special Administrative Region has seen declining inflows trend between 2000 and 2018, i.e.m decline from about US$ 53 million in 2005 to just US$ 25 million in 2018.

Note: For the current dataviz, we have taken into consideration remittance inflows into analyzed economies only.

Ramesh Kumar Raj

Synopsis

The world is beset with the multifaceted challenges from the rise of authoritarianism, populism, and protectionism. All of these have largely affected the spirit of liberal internationalism which has served well for more than seven decades. The threat lies primarily from its propagator and ultimate protector US and its allies because of their protectionist approach and unpromising view towards the promotion of the current liberal world order. This raises the issue of whether the open and rule-based liberal order will survive the current onslaught from the US?

What is Liberal Internationalism?

With the end of World War I, the era of power politics dominated by realist assumptions of statism, self-help, and survival turned to a more idealist notion of peace and cooperation, as espoused in Woodrow Wilson’s fourteen points’s speech. He gave the practicality to the idealist notion of Kantian democratic peace through liberal institutionalism and internationalism. Though the League of Nations failed, the updated notion of institutionalization and liberal order was established under the US leadership post-WWII. The United States and its partners built a multifaceted international order- organized around economic openness, multilateral institutions, security cooperation, and democratic solidarity. Since then, these economies – mostly Europeans and Japan – participated, benefitted and promoted the liberal democratic, and rule-based world order. They also successfully defended and promoted liberal values against communism exemplified by victory over Socialist Camp during the Cold War and democratization of Eastern Europe, East Asia, and Latin America. 

Crisis of Liberal Internationalism

The end of the Cold War and the victory of the democratic and liberal system led some to argue that history has ended and many to remark that the golden age liberal institutionalism and rule-based order were due. However, with globalization and interdependence, the complex and interlinked issues have emerged as a threat to the current world order.

The threats to the current world order lies from political, economic, security dimension to propaganda, cyber crime and media trails.

Figure: Top Risks Expected to Rise in 2019 (Source: Global Risk index)

The 14th edition of the Global Risks Report, prepared by the World Economic Forum, examines the global risk perception against the backdrop of worrying geopolitical and geo-economic tensions, which if left unresolved will hinder the global ability to tackle collective challenges. While assessing the report; the risks related to political and economic confrontations, populism and natives agendas, erosion of multilateral trading rules, agreements and human security has high range and these global risks are a threat to the spirit of Liberal Internationalism.

Trump’s Foreign Policy sabotaging Liberal Internationalism 

While the global threats to liberal internationalism continues to rise, the propagator and promoter seems to have turned its back. The 45th US President, Donald Trump, in his Inauguration Speech in 2017 argued reducing U.S. trade deficits, rebalancing burden-sharing within major alliances and becoming more concerned for national Interest. This argument signifies Trump’s lack of interest in the protection of the regime of liberal world order which has been at the heart of US foreign policy for about seventy years. Trump Presidency witnessed more sabotaging of liberal internationalism by withdrawing US from key regional and global treaties and avoiding the American leadership in the making of a more liberal world-order. The protectionist Trump’s Administration has withdrawn from Trans-Pacific-Partnership (TPP), Paris Accord, Iran Nuclear Agreement, and UNHCR, cut off contribution for (NATO), Started a trade war with China, revised NAFTA to United States-Mexico-Canada Agreement (USMCA) claiming unfair to US trade which proves US unpromising way to liberal internationalism. 

 Not only the US but also its Partners

In recent years, not only the US but also its key allies in Europe have witnessed growing sentiments that pose threat to global liberal-order. For example, the United Kingdom’s decision to leave the European Union (EU) was a backlash against globalism and immigration. The uncertainties of Europe and world politics remarked by populist, nationalist, fundamentalist and xenophobic strands have proliferated and backlashing liberal internationalism. Also the rise of  radical right-wing parties since the 2000s is strongly linked to a rise in Euro-scepticism. Similarly, the issues and problems associated with the international migration and the rise of right-wing nationalist and populist parties within Europe have been hostile to democratic and liberal values, not only for economies in EU but also for economies around the globe. Migration has become voters’ number one concern across the bloc and the issue has swayed elections, including elections in France, Germany, Austria, Italy and Hungary. This has led Europe to follow the trend of US protectionist and populist approach in domestic and cross-border politics.

Will Liberal Internationalism Survive? 

For the past few decades, there has been a series of serious debates on the reorganization of the world order and emergence of the post-Western world order but the latter idea still remains obscure. Therefore, a serious query remains unanswered whether the current world order, which is based on free, open and rule-based governance, would continue to govern the 21st century world.

Some label the current crisis as a temporary setback that can be changed with new political leadership. Sometimes failing of leadership models might be seen as a result of a leader’s inadequate knowledge and awareness on local and world economy. That means, there can be some pitfalls of leadership which affect national and global economies and we can not put these blames on respective countries’ entire political system. Therefore, it lies possibility of US future leadership to lead, protect and promote US crafted liberal international idea globally rather limiting its scope within territory.

But most of the argument is also based on the crisis of American hegemonic leadership. They claim that “liberal international order has been tied to American power-its economy, alliance, leadership, and values”. Perhaps it is a phase of ‘transition’, whereby the old US-led political foundation of the liberal order will give way to a new configuration of global power based on a new governance model. Today, the American hegemony challenged by China is not only limited to economic and military issues but also those countries’ growing significant roles in global affairs. President XI’s vision for making China superpower by 2050 and his BRI and “Community of shared future for mankind” approaches can be taken as China’s version of internationalism.  Beside China, “the rise of the rest (other rising powers)” has also challenged unilateral dominance of the west, led by the US. It seems the US-led views and ideas towards world politics (promotion and practice of more democratic values), economy (capitalist economy), social leadership (individual freedom and Human Rights), and governance (International Law) no longer remain fascinating for many of the global economies and as a consequence there is a growing search for alternative models of leadership, most notably Chinese and East Asian development models. 

References

  1. Dunne, T., & McDonald, M. (2012). The politics of liberal internationalism. International Politics, 50(1), 1-17. Retrieved from doi: 10.1057/ip.2012.25
  2. Edmund, F. (2019). Liberalism: The Life of an Idea by Edmund Fawcett review – what is a liberal?. Retrieved from https://www.theguardian.com/books/2016/jan/29/liberalism-life-of-idea-edmund-fawcett-review
  3. Fukuyama, F. (1989). The End of History? The National Interest, (16), 3-18. Retrieved from www.jstor.org/stable/24027184
  4. Ikenberry, G. (2016). American leadership may be in crisis, but the world order is not. Retrieved from https://www.washingtonpost.com/news/in-theory/wp/2016/01/27/american-leadership-is-in-crisis-but-the-world-order-is-not/
  5. Ikenberry, G. (2018). The end of liberal international order?. International Affairs, 94(1), 7-23. Retrieved from doi: 10.1093/ia/iix241
  6. Peters, M. (2015). Challenges to the ‘World Order’ of Liberal Internationalism: What Can We Learn?. Educational Philosophy And Theory, 48(9), 863-871. Retrieved from doi: 10.1080/00131857.2015.1057033
  7. Trump’s Foreign Policy Moments. (2019). Retrieved from https://www.cfr.org/timeline/trumps-foreign-policy-moments
  8. Wolfgang, I. (2019). The World According to Kissinger. Retrieved from https://www.foreignaffairs.com/reviews/2015-03-01/world-according-kissinger
  9. Wyman, O. (2019). Global Risks 2019. Retrieved from https://www.oliverwyman.com/our-expertise/insights/2019/jan/globalrisks2019.html

THE ISSUE

Alexa Internet, a subsidiary of the US tech giant Amazon, analyzes web traffic data and ranks about thirty million global web pages. The ranking data are available for global web traffic, country specific web traffic and category-wise online traffic. As per Alexa’s recent ranking for Nepal, the country’s top ten popular online portals comes from five sectors namely search engines, video platforms, news and media portals, social media, and encyclopedia.

NEPAL’S 10 POPULAR WEBSITES

Following the global trends; Google (.com), YouTube (.com), and Facebook (.com) rank in the first, second, and fifth places respectively. In Nepal, unlike Wikipedia (.org) ranking in the tenth position in the global ranking, it ranks in the ninth position instead. Rest of the ranking positions belong to country’s local online portals. And all these six websites represent Nepal’s news and media platforms. In summary, while Google (.com) dominates Nepal’s major share of search queries, Facebook (.com) does the same thing when it comes to the social media platforms, and Wikipedia (.org) rules online encyclopedia market.

OUR OBSERVATIONS

The most recent MIS Report from Nepal Telecommunications Authority (NTA) indicate Nepal’s current internet penetration rate reaching more than 67.23 percent. That means, Nepal continues to create more opportunities for the Government of Nepal authorities and the local and global techpreneurs to harness available internet and technologies to design appropriate goods and services.

Performance of Global Platforms in Nepal

From available data from Google Trends for the past twelve months, we clearly saw local internet users using Google (.com) platform to search for contents related to video games, cricket, weather, and some of the public services. Similarly, the available data for YouTube search results indicates internet users in Nepal using the platform mainly to watch movies and music videos. In regards to social media platforms, one estimate (for September 2018) shows about ten million Nepali Facebook users, which is about 32.6 percent of the country’s entire population. The same estimate also highlights that more Nepali males (61.3%) are on Facebook than the Nepali females (38.9%) and Nepalis in the age group of 18 – 34 years are the most active Facebook users. From these details, we infer that most of the Nepali Facebook users comprise of college/university students and young Nepali professionals who use the platform to connect with their families and friends and also for keeping them updated with the most recent news and updates. For Wikipedia, a considerable share of Nepal’s connected population benefits from it.

Performance of Local Platforms

All the six local platforms that rank in the list of top ten popular portals in the country comes from news and media platforms. On top of that, all of them are Nepali language news and media portals and, considerably, do not have long history of their existence. English section of these platforms do not rank well in the ranking. In addition, all of them are involved in online publishing only. From these observations, we acknowledge that it is common for Nepali language platforms to perform better when 44.64 and 32.77 percentages of Nepalis use Nepali as their first and second language respectively. In regards to the country’s print media platforms, though they have played significant roles in Nepal’s socio-economic and political transformations, they have slowly been losing their markets in the market. We can definitely say that if they do not evolve with the local users’ changing preferences, they might stand at the verge of collapse one day.

In the light of growing local internet users and booming of online platforms for various other purposes – most commonly in the areas of e-commerce and online job search, there platforms still lag behind in terms of generating online traffic. So, for them, massive investments in advertisements and in making users aware of their platforms (and related) activities are a must.

Users’ Trends for Platforms

Google (.com) being a search engine in itself, it gets only 0.50 percentage of web traffic from alternative search results. On the other hand, Wikipedia (.org) and YouTube (.com) get major share of their traffic from online search engines (71.70% and 16.90% respectively). For rest of the platforms, the figures stand below ten percent, i.e., the users directly open homepages of these platforms.

In regards to the average time spent on a daily basis, only Facebook (.com), Khabarhub (.com), Google (.com) and YouTube (.com) figures are in double-digits and rank in declining order in this aspect. However, when it comes to daily page views per visitor for these ten platforms, only Google (.com) contains data in double-digits followed by Facebook (.com) in second place with only 7:92 and YouTube (.com) in third place with 6:4- page views. This figure for all local portals and Wikipedia have values less than 5.

Note: Alexa Internet, Inc. calculates rank from a combination of data for daily users and page views on ranked online platforms over a period of three month. The data used in this data visualization and analysis are correct as of November 22, 2019 (11:45AM Nepal Standard Time)

Sanjay Pokharel

Synopsis

For long, the tourism sector has remained as one of the key components of Nepal’s national economy. With less than two months left before the formal beginning of “Visit Nepal 2020” (VNY2020), key stakeholders within the Government of Nepal and the private sector have been working to make this initiative a success. In this regard, I highlight why it would be wise for these stakeholders to also focus on improving travel options and services for domestic tourists as well while working on those options for the international visitors. I believe, the experiences of local tourists will have significant impacts on travel decisions of the guests from outside Nepal.

Background

Strategically positioned between two of the world’s largest economies – China and India, Nepal has immensely pacing its growth in tourism sector right after opening its door to the world in the 1950s. After the successful campaign to promote tourism in Nepal through “Visit Nepal 1998” and “Nepal Tourism Year 2011”, the government of Nepal has already announced year another ambitious tourism plan – Visit Nepal 2020 (VNY2020). As tourism sector accounts for 7.5 percent of Nepal’s GDP and is forecasted to reach 8.3 percent of GDP in 2027, the country has enough reasons to employ plans and policies to further boost this sector. Also, tourism in general has positive impacts across regions, especially in terms of generating employment, improving socio-economic conditions of local communities, and production and sales of higher local goods and services.

As per the VNY2020 plans, the Government of Nepal targets to bring in 2 million foreign guests into the country. With a catchy slogan of “Lifetime Experience”, Nepal not only plans to bring in more tourists into the country but also plans to establish the country as one of the first choices among global travel enthusiasts. To achieve these targets, the concerned public and private stakeholders have been working to improve existing destinations while also exploring few more new destinations. Nepal believes, with these, the tourists will have more options to travel to and experience Nepal’s most unique experimental and lifetime travel routes.

The VNY2020 is Nepal’s mission to show the world country’s, often undervalued, tourism industry and thus attract more of the high-value tourists by creating the best possible tourism experience. To make the year-long campaign a success, Nepal’s Ministry of Culture, Tourism and Civil Aviation (MoCTCA) has been partnering with Nepal Tourism Board (NTB) and other key public and private stakeholders, most notably Nepal’s Ministry of Foreign Affairs (MoFA), local airlines companies, tour and travel operators and hoteliers. To move forward, an implementation sub-committee chaired by  the MoCTCA Secretary has been formed and tasked with partnering with all stakeholders to make required preparations for the campaign.

Recent Trends in Nepal’s Tourism Sector

In 2018, Nepal hosted 1.17 million international visitors.  China, India, the United Kingdom, the United Kingdom and Sri Lanka were the top five countries of origin for tourists that year. While the numbers of international guests was encouraging, the local tourists accounted for almost half of the total tourists in 2017.

Of the total visitors, more than two-thirds of them arrived for vacation, entertainment or travel. Overall, the entertainment, mountaineering/trekking, religious, and other trips comprised of 60 percent, 16 percent, 14.4 percent and 9.6 percent respectively. In the meantime, considering the recent boom in the quantity of local travelers traveling in Nepal and outside, it gives a clear message to the tourism industry and international market alike that Nepali travelers too could be an important part of the local and global tourism markets.

Preparing for VNY2020

Synergy of efforts along with the private sector, diplomatic missions, Nepali diaspora, the media and other stakeholders can be seen to support the overarching objective of VNY2020. In regards toVNY2020  prospects of domestic tourism in recent years have also been the key areas of interest for tourism stakeholders leading to its steady growth which in turn, is bound to fuel the tourism environment in Nepal. In the span of five years, domestic tourism has increased by almost five-fold with Nepalis have also developed a desire to travel around the country which signifies the booming of the sector. Apart from traditional leisure destinations,  numerous new destinations have drawn domestic adventurers lately which not only promotes domestic movements but also attracts and opens ways for international tourists.

With the Visit Nepal 2020 in sight, the Government of Nepal has allocated a budget of Rs 2.68 billion for FY 2019/20 and 11 special strategies have been identified to develop and promote the tourism industry in the National Tourism Strategy 2016-2025. And,  these allocations and strategies encourage/invite domestic and foreign investment, promoting public-private partnership, improving infrastructure, reforming government policies which pace the growth of tourism industry and numbers of domestic and international tourists. The crucial part is to accomplish the broader objectives of VNY2020 campaign and other tourism strategies where tourism stakeholders needs to immediately consider the five low hanging  interventions proposed by our NIPoRe researcher – Mr. Nirnaya Bhatta. Those interventions that are related to infrastructure, security, better service and experience, payment mode and transportation doesn’t only ensure safe travel for international tourists but also promotes domestic tourism.

In the meantime, the Chinese President Xi Jinping’s State Visit to Nepal in October this year has added a new vigor in the diplomatic relation between Nepal and China. Additionally,, following the visit, the numbers of Chinese tourists here increased. Post State Visit; 15,037 Chinese tourists visited Nepal which is 11.5 percent more than the number of Chinese visitors coming to Nepal in the same period last year. This clearly shows that meaningful diplomatic practices too can help Nepal to work towards achieving major VNY2020 targets.

Stakeholders like Nepal Tourism Board (NTB), Nepal Mountaineering Association (NMA), Hotel Association of Nepal (HAN), Federation of Handicraft Association of Nepal, Nepal Association of Tour and Travel Agents and Nepali diaspora are on stage promoting Nepali tourism before formal beginning of VNY2020. These stakeholders have been trying to do global promotion of VNY2020 related plans and activities.

Though using diplomatic relations and collaborations within and across the stakeholders can definitely bring larger outputs, and, while promoting works outside Nepal for related activities, these stakeholders also need to cleverly think of targeting existing major countries of origin of foreign travelers to Nepal and also reaching out to new countries if they wish to establish Nepal as one of the top travel destinations in the world.

As the larger numbers of international travelers is definitely a good idea to boost Nepal’s struggling tourism sector, but still the larger question remains – “Are these stakeholders considering the aspects of domestic tourists”. If stakeholders are strategic enough, they can lure Nepal’s increasing middle-class to spend more time on exploring Nepal’s diverse tourism destinations.

Also, merely a surge in numbers does not add up to significant results unless Nepal can encourage tourists to stay for longer period and expand their daily expenditures. And to do so, these stakeholders also need to have ample diversified tourism packages. A bigger question may arise in this regard, i.e., “How to increase the tourists length of stay and expenditure?” The answer lies within the National Tourism Strategy 2016-2025 that focuses on tourism infrastructures. And, history has shown that without proper coordination and collaboration between tourism stakeholders it’s very difficult to accomplish these goals. For the domestic and international tourists alike what matters is their overall travel experience and that experience, in my view, is what Nepali tourism industry needs to sell which comes when all the stakeholders come together.

Concluding Remarks

Despite having countless travel destinations within the country, in recent years, more and more Nepalis are flocking for destinations outside for recreation and holidays. In my view, though we should not try to (and even if we wish, we won’t be able to) discourage Nepalis from traveling abroad, improving local tourism industry could encourage more Nepalis to stay back and travel across different parts of the country. This act will not only help locals to explore their country but also contribute towards local, regional and national economy.

As the official tagline for VNY2020 is “Lifetime Experiences” and with less than two months left before commencement of the campaign, we seriously need to further evaluate where we are and where our stakeholders are in regards to the campaign. The important aspects in this regard could be – Are we considering domestic tourism as an important aspect in the campaign? If so, what are our strategies that promotes domestic tourism? Thus, if infrastructures, services and experiences improve for domestic tourists, it will inadvertently improve for international tourists, which demonstrates that promoting domestic tourism and expanding the structural and functional priorities for domestic tourism will trigger bigger positive impact on international tourists.

References

  1. Bhatta, N. (October, 2019). Visit Nepal 2020 – Have We Managed to Get Our Priorities Straight?. Nepal Institute for Policy Research (NIPoRe). Retrived from https://nipore.org/nrc0016-visit-nepal-2020-have-we-managed-to-get-our-priorities-straight/
  2. Mahat, J.J. (October, 2019). President Xi Jinping’s State Visits – SAARC Vs ASEAN. Nepal Institute for Policy Research (NIPoRe). Retrieved from https://nipore.org/ndv0004-president-xi-jinpings-state-visits-saarc-vs-asean/
  3. Ministry of Finance, Government of Nepal. (2019). Budget Speech of Fiscal Year 2019/20. Retrieved from https://mof.gov.np/uploads/document/file/budget_speech_website_20190619052055.pdf
  4. Prasain, S. (May 26, 2019). Nepal tourism generated Rs240b and supported 1m jobs last year: Report. The Kathmandu Post. Retrieved from https://kathmandupost.com/money/2019/05/26/nepal-tourism-generated-rs240b-and-supported-1m-jobs-last-year-report
  5. Prasain, S. (July 29, 2016). Nepal tourism sets goal to boost arrivals fivefold. The Kathmandu Post. Retrieved from https://kathmandupost.com/money/2016/07/29/nepal-tourism-sets-goal-to-boost-arrivals-fivefold
  6. The Himalayan Times. (August 30, 2018). Outbound Nepali travellers spent almost Rs 80bn. Retrieved from https://thehimalayantimes.com/business/outbound-nepali-travellers-spent-almost-rs-80bn/
  7. The Himalayan Times. (August 18, 2019). Lack of Proper Systemisation, Infrastructure and Management are Hindrances for the Growth of Internal Tourists in Nepal. Retrieved from https://thehimalayantimes.com/business/perspectives/developing-domestic-tourism/
  8. The Himalayan Times. (November 12, 2019). Chinese Tourists’ Arrival Up. Retrieved from https://thehimalayantimes.com/nepal/chinese-tourists-arrival-up/
  9. The Kathmandu Post. (June 30, 2016). Middle Class Swells to 22pc of population. Retrieved from https://kathmandupost.com/money/2016/06/30/middle-class-swells-to-22pc-of-population
  10. Stynes, D.J. (1997). Economic Impacts of Tourism. Tourism Research Laboratory, University of Illinois at Urbana-Champaign. Retrieved from https://msu.edu/course/prr/840/econimpact/pdf/ecimpvol1.pdf

THE ISSUE

It has become a commonplace phenomenon for the governments around the world to borrow money from outside to support their activities. When they borrow the external money, the governments are liable to pay back the borrowed amount as per the terms and conditions agreed with the lenders. This thus borrowed money is called as the government debt (or public debt or national debt or sovereign debt). Depending upon from whom the states borrow money, the debt can be classified as either internal debt (lenders are within the respective country) or external debt (lenders are located outside of an economy). In addition, considering repayment plans, debt is further classified into three categories namely short-term (repayment due date within one year or less time), mid-term (repayment due date vary between 1-10 years), and long-term (repayment due date remains more than 10 years). In general, the governments become liable to debt by issuing their respective government bonds and bills.

STATUS OF THE GLOBAL DEBT

As per the IMF’s 2019 estimates, in nominal terms, the global debt has exceeded US$ 184 trillion – equivalent of more than 225 percent of global GDP in year 2017. This means, global debt per capita now stands at more than US$ 86,000. Of the US$ 184 trillion global debt towards the end of 2017, about ⅔ is private debt and rest is government debt. As per the IMF’s Global Debt Database, the total global government debt has hit a record high US$ 69.3 trillion. The United States, China and Japan alone account for more than half of global debt now. IMF has also found that, since 1950, the private debt has skyrocketed and rose by more than three times. Overall, for 2017, IMF has classified 190 global economies into three categories – Advanced, emerging market and low-income developing – depending upon those economies’ debt profiles. Overall, there was a decline in public debt and marginal increase in public debt in advanced economies. Similarly, emerging market economies continued to borrow money from the public and private sectors. Finally, low-income developing countries saw a rise in public debt.

STATUS OF GOVERNMENT DEBT (South Asia, Southeast Asia and China)

Our analysis, using the recent IMF data, shows an overall a healthy status of economies in South Asia, Southeast Asia and China.

In South Asia, Afghanistan – though had a very high-risk level of government debt to GDP ratio in 2005 – has improved a lot and continues to remain the healthiest economy in terms of debt to GDP ratio in recent years. Nepal, on the other had – after having low-risk debt to GDP ratio for three subsequent years between 2015 and  2017, has entered into a moderate-risk level since 2018. The debt to GDP ratio is on the rise since then and the projected figure for 2024 also shows a substantial jump in the ratio. Similarly, Bhutan (one of the two South Asian land-locked nations) is in the very high-risk level of the debt to GDP ratio as the economy’s ratio has been above 100 percent since 2016. However, the projected figure for 2024 shows Bhutan coming down to high-risk level. While Bangladesh has been in moderate-risk level over years India and Sri Lanka, on the other hand, still remain in the lower quantile of high-risk level. Maldives and Pakistan, on the other hand, have remained in moderate-risk levels for long but these economies have entered into high-risk levels since 2018 and 2016 respectively.

Across Southeast Asia, Brunei Darussalam remains the healthiest economy in terms of debt to GDP ratio while Singapore stands in the very high-risk level. Rest of the economies in this part of the world remains in moderate-risk zone. Myanmar, once possessed very high-risk level of debt to GDP ratio in 2005, has improved a lot in terms of handling government debt and the current ratio lies below 40 percent.

In China, the Mainland China used to have low-risk level of debt to GDP ratio earlier. In 2005, the ratio was only 26.1 percent. However, after the Global Financial crisis, the ratio is on the rise. China Mainland, after remaining in the moderate-risk levels for almost one decade, has now entered into the high-risk level. Hong Kong SAR, however, possess very healthy debt to GDP ratio, which now stands at 0 percent. In the case of Taiwan, the economy continues to  have a moderate-risk level of debt to GDP ratio and the projections for year 2024 indicate the economy would bounce back to a healthy ratio after 5 years.

In concluding remarks, we acknowledge that analysis of single component of these economies’ economic health does not represent complete pictures of these countries economic status. Thus, in coming days, we will be working on other key aspects of public finance issues from these countries to make our analysis more inclusive.

 

 

 

 

 

 

 

 

 

Santosh Sharma Poudel, in his recent column (In Nepali Language) for Nepal Magazine, discusses how ongoing and future US-China competition may affect the way Nepali foreign policy priorities and practices work with these two and other major world powers.

Prashanta Pradhan

Synopsis

Nepal ranked 94 in the recently published World Bank’s Doing Business Report with an increase in score from 59.7 to 63.2 in just a year. Improvements were reported in scores on dealing with construction permits, trading across borders and enforcing contracts but the highest increase was reported in getting credit with substantial improvement by 25 basis points from 50 to 75. Within various indicators on getting credit, the highest improvement was seen on credit bureau coverage of adults from mere 2.7% in 2018 to 7.3% this year covering 1,301,061 individuals and firms. 

Credit Bureau and Credit Reporting System

Credit reporting systems consist of institutions, individuals, infrastructures and procedures that facilitate the flow of information enabling decisions related to provision on loans. Credit reporting systems aim to address information asymmetries that exist for evaluating whether to extend credit to debtors or not. Credit Bureau is an actor in the credit reporting system whose primary function is to improve the quality and availability of data for creditors to make better informed lending decisions. There are three other main actors – Data Subjects (individuals and businesses whose data are collected), Data Providers (financial institutions and utilities that provide information and data subjects) and Data Users (banks, central banks, and employers who use credit information provided by credit bureau).

The Credit Information Bureau of Nepal was established in 1989. The shareholders of the bureau are central bank along with commercial banks and financial institutions. Nepal Rastra Bank Act 2002 states that NRB will establish or cause to establish one credit information centre for the primary purposes of obtaining information on the flow of credit from commercial banks and financial institutions as well as information on debtors not paying loans on time or misusing the loans.

Non-Performing Loans and SMEs’ Access to Finance 

  • According to Nepal’s Central Bank, between FY 2016/17 and FY 2017/18, the volume of Non-Performing Loans (NPL) of commercial banks increased by 8.14% reaching Rs 29.85 billion. The increase was seen in both public and private banks by 7.93% and 8.27% respectively.  
  • IMF has reported that 70% of total lending is concentrated on real estate sector which may be difficult to avoid due to less developed and less diversified banking system. Moreover, bank’s loans books indicate half of loans as overdraft and working capital loans which rollover continuously with the quality of loans difficult to gauge.
  • As per Nepal Rastra Bank’s 2019 study findings, only 16% of SMEs in Nepal are taking credit from banks and financial institutions as initial capital compared to 33% from family assets and 26% from savings. On average, 50% of SMEs have taken credit from banks and financial institutions.  On average it takes 38 days for SME to access credit. 

Information Asymmetry and Business Environment

Access to finance plays a significant role in improving business environment and economic growth in an economy. However, information asymmetry hinders access to growth in many developing economies, especially for SMEs that contribute a large share of employment. In Nepal, SMEs on average employ 1.7 million people and contribute to 22% of GDP. In developing economies, enforcement of contracts and functioning of legal systems are relatively weak. Hence, the role of information gathering and sharing are important to enhance creditors’ protection. Taking past behavior of borrowers as a reliable predictor of future behavior, crediting reporting systems minimize risks creditors have to bear with borrowers. 

On the one hand, credit reporting system support regulators in supervision and monitoring credit risk whereas on the other hand, financial institutions can enhance access credit to small firms, reduce interest rates and improve borrower discipline. NRB study has indicated collecting information about SMEs and speedier credit approval are among the top ways to enhance access to SME financing. A World Bank study done across 63 countries covering more than 75,000 firms indicated that after the introduction of credit bureau, there were greater possibilities for firms to access finance, lower interest rates, lengthen maturity and increase the share of working capital financed by banks. 

Today, credit bureaus operate in many countries around the world and there is growing emphasis on strengthening them. Some of the drivers of growth of credit bureaus are growth in retail credit, reform stemming from financial crisis, the rise of digital technologies all of which increase need as well as opportunities to expand access to credit information services. 

Alternative Sources of Data to Serve Underserved Segments

While traditional sources of data like commercial banks and financial institutions enable data users to access data and associated analytics on existing borrowers. However, this does not cover new borrowers. Hence, there is also growing need for tapping alternative sources of data, for example, from utilities operators on payment history, telecom companies etc. The ability of a system to tap into these alternative sources of data shall greatly contribute to enhancing access to finance and reducing credit risk of lenders. In general payment data, social media data and behavioural data are considered to be useful to contribute to credit scoring. 

Conclusion

Nepal Rastra Bank’s Monetary Policy 2019 as well as the International Monetary Fund’s Country Report 2019 refer to the need for improving credit reporting in Nepal.  It is crucial for credit reporting agencies to embrace advanced digital technologies and big data analytics to collect and analyse credit and payment data collected from various sources. Moreover, in order to strengthen the financial sustainability of credit bureaus and enhance value creation in the economy, value added services from credit data analytics also needs to be developed which could be relevant for many industries and businesses other than banks and regulators, for example, retail services with high reliance on digital payments, employers who would like to understand credit behavior of their potential applicants or existing applicants. However, regulatory frameworks and data protection procedures should be strongly put in place too.

References

  1. IMF. (February, 2019). IMF Country Report No. 19/61. Retrieved from https://www.imf.org/en/Publications/CR/Issues/2019/02/15/Nepal-Selected-Issues-46623
  2. Peria, M. S. M, and Singh, S. (August, 2014). The Impact of Credit Information Sharing Reforms on Firm Financing. World Bank Policy Research Working Paper 7013. Retrieved from https://openknowledge.worldbank.org/bitstream/handle/10986/20348/WPS7013.pdf
  3. Nepal Rastra Bank. (2019). Bank Supervision Report. Retrieved from https://www.nrb.org.np/bsd/reports/Annual_Reports–Annual_Bank_Supervision_Report_2018-new.pdf
  4. Nepal Rastra Bank. (2002). Nepal Rastra Bank ActNepal Rastra Bank Act, 2058 (2002). Retrieved from https://www.nrb.org.np/lgd/acts_ordinances/Nepal%20Rastra%20Bank%20Act,%202002%20(English)2074.12.21.pdf
  5.  Nepal Rastra Bank (2019) SMEs Financing in Nepal. Retrieved from https://www.nrb.org.np/red/publications/study_reports/Study_Reports–नेपालमा_साना_तथा_मझौला_उद्यममा_वित्तीय_साधन_परिचालन_2076-new.pdf
  6. World Bank Group. (2019). Doing Business 2020 – Comparing Business Regulation in 190 Economies. Retrieved from https://openknowledge.worldbank.org/bitstream/handle/10986/32436/9781464814402.pdf

For all the Heads of the States around the world, it is a commonplace phenomenon to travel around countries across the continents either for State Visits or Official Visits or attending major meetings. And Nepal’s incumbent Prime Minister, Mr. KP Sharma Oli, is not an exception. In fact, these trips not only help the leaders to make their all possible efforts to have their regional and global influence in highly globalized modern world but also to build better relations with respective countries’ diaspora across the globe through formal and informal gatherings.

In the case of Mr. Oli, who has been serving his second prime ministership since 15th February 2018, he has made foreign trips to ten countries (as of November 04, 2019). In addition to China and India, Nepal’s immediate neighbors, PM Oli has also travelled to four of the world’s major economies – France, Switzerland, the United Kingdom, and the United States of America. In addition, he and his delegation have also travelled to new and rising economies – Azerbaijan, Cambodia, Costa Rica, and Vietnam. 

PM KP SHARMA OLI’S FOREIGN TRIPS

Below, we highlight PM Oli’s all foreign trips as the 41st Prime Minister of Nepal. We have discounted PM Oli’s two trips to Singapore (made during August – September, 2019) in this data visualizations as those visits were meant for his personal health check-ups only. 

2019

Azerbaijan (October)

Nepali Prime Minister and his 21-member Nepali delegation travelled to Baku, Azerbaijan and attended the 18th Summit of Heads of State and Government of the Non-Aligned Movement (NAM) that ran for October 25-26, 2019. Nepal is one of the founding members of NAM and the principles of non-alignment form core strategy of Nepal’s foreign policy practices. While in Baku, PM Oli addressed the leaders of Summit on “Upholding the Bandung Principles to Ensure Concerted and Adequate Response to the Challenges of Contemporary World” topic.

France (June)

In June, PM Oli and his Nepali delegation went to Paris, France for an Official Visit. During the 3-day Visit (June 12-15) to the Republic, PM Oli attended a programme organized by the Federation of National Chambers of Industries and Commerce of France (MEDEF) at the Federation’s Headquarters. In addition, he also attended few gatherings organized by the Embassy of Nepal in Paris and also by France-Nepal Friendship Society. PM Oli also took his France Visit occasion to make an official announcement of Visit Nepal Year 2020 in the French Republic.

United Kingdom (June)

The Nepali Prime Minister and his official delegation made an Official Trip to Oxford and London in the United Kingdom. During the 3-day long trip (June 10-12), PM Oli addressed at the Oxford Union on ‘Peace, Democracy and Development’. While in London, the Nepali leader also held meetings with the then British Prime Minister, Theresa May, and a key member of the British Royal Family, Prince Harry. In addition, PM Oli also addressed a group of professionals representing the All Party Parliamentary Group for Nepal (APPG) and the British Group on Inter-Parliamentary Union (BGIPU). The Nepali delegation also held formal meetings with officials from the Confederation of British Industry (CBI), Non-Resident Nepalis, and the British Gurkhas. Towards the end of the Trip, a Joint UK-Nepal Communique was released by the Foreign Ministers of both the nations.

Switzerland (June)

To attend the Centenary International Labor Conference, PM Oli and a high-level official Nepali delegation travelled to Geneva, Switzerland. During his stay in Geneva (June June 09-10), PM Oli addressed the Conference participants. In addition, Mr. Oli also met Nepali community and Friends of Nepal in Geneva.

India (May)

At the invitation of his Indian counterpart Mr. Narendra Modi, the Nepali Prime Minister travelled to India for an official visit. During the visit (May 30-31), PM Oli attended the oath-taking ceremony of Mr. Modi, who was reelected as the Prime Minister of India from country’s 17th Loksabha Elections.

Cambodia (May)

The Nepali Prime Minister and an official delegation visited Cambodia for an official visit. During the 3-day visit (May 13-15), besides holding talks with the key Cambodian leaders, PM Oli and his Cambodian counterpart witnessed the signing of an agreement for Nepal-Cambodia trade and economic cooperation. In addition, the visit also made it possible for the Nepal Chamber of Commerce and Cambodia Chamber of Commerce to sign  a Memorandum of Understanding (MoU). During the visit, PM Oli also addressed the participants of Nepal – Cambodia Business Forum. While in Phnom Penh, PM Oli and his delegation also met with representatives from Non-Resident Nepali Association (NRNA) Cambodia Chapter. The major accomplishments of this visit and future plans in this regard were later highlighted in a joint-statement.

Vietnam (May)

At the invitation of the Prime Minister of Vietnam, Mr. Nguyen Xuan Phuc, Nepali leader and his delegation travelled to Vietnam for a 5-day official visit. During the trip, PM Oli and his team visited few historical and touristic places in the country including Ha Long Bay, one of Vietnam’s UNESCO World Heritage Sites and released a English-Vietnamese translated book “Nepal: Peace is at Hand” to share Nepal’s experiences with the Vietnamese readers. In addition, the Nepali delegation also held a meeting with the representatives of Vietnam Chamber of Commerce and Industry (VCCI). During the trip, PM Oli addressed a gathering at the Ho Chi Minh National Academy of Politics. In addition, he also addressed the participants of Vietnam – Nepal Business Forum in Hanoi. Furthermore, PM Oli also attended and made an address at an event organized to mark the 16th UN Day of Vesar (Buddha’s Birthday) in Ha Nam Province. A joint-statement was also released on the occasion of PM Oli’s official visit to the Socialist Republic of Vietnam.

Switzerland (January)

In January 2019, Nepali Prime Minister KP Sharma Oli became the first sitting leader of the Himalayan nation to attend and speak at an annual meeting of the World Economic Forum in Davos, Switzerland. During his visit, PM Oli attended two sessions at the 49th Annual Meeting of the World Economic Forum (WEF) as a panelist, namely Strategic Outlook on South Asia and Shaping the Future of Democracy. Besides regular WEF events, PM Oli also met with the representatives from Non-Resident Nepali Association (NRNA) Switzerland Chapter, Swiss-Nepalese Society. While on his way to Kathmandu, PM Oli also visited Innovation and Entrepreneurship Centre at the Swiss Federal Institute of Technology (ETH Zurich).

2018

Costa Rica (September – October)

At the invitation of the President of the Republic of Costa Rica, Mr. Carlos Alvarado Quesada, the Nepali Prime Minister and his official delegation travelled to San José, the capital city of the Latin American nation. Mr. Oli became the first sitting Nepali Prime Minister to visit Costa Rica. Besides regular political and diplomatic meetings and also visiting a few places in the country, Mr. Oli also addressed a gathering at the University for Peace (UPEACE), the University later awarded Nepali Prime Minister with the Honorary Doctorate.

United States of America (September)

To attend the 73rd Session of the United Nations General Assembly (UNGA), leading the Nepali delegation, Mr. KP Sharma Oli visited the United States of America. While in New York, PM Oli addressed the 73rd Session of UNGA, made remarks at the High-Level Event on Action for Peacekeeping (A4P), and delivered a public lecture on “Peace, Democracy and Development” at the Asia Society.

China (June)

More than two months after his State Visit to country’s immediate southern neighbor, PM Oli and his delegation travelled to China, Nepal’s immediate northern neighbor, for a 6-day long Official Visit (June 19-24). PM Oli made this trip at the invitation of Chinese Premier Li Keqiang.

During this visit, PM Oli made series of high-level political and diplomatic meetings. In addition, Mr. Oli also witnessed the signing of an agreement for cooperation between Nepal Electricity Authority (NEA) and the State Grid Corporation of China for undertaking a feasibility study of Nepal-China cross-border power grid interconnection project across the Kerung-Rasuwagadhi-Galchhi-Ratmate transmission line (400 kV). Moreover, representatives from Nepali business and tourism communities also signed eight Memoranda of Understanding (MoUs) in the areas of hydropower generation, manufacturing, river training, and agriculture. The overall accomplishments of the visit and future course of actions in this regard were highlighted in a joint-statement between Nepal and the People’s Republic of China.

During the trip, PM Oli addressed a reception organized by the Embassy of Nepal in Beijing. In addition, the Nepali leader also inaugurated and addressed at the 2018 Nepal-China Business Forum. To enable Beijing-based Nepali diplomatic mission’s outreach among Chinese audiences, PM Oli also launched the official WeChat account of the Embassy of Nepal in Beijing.

India (April)

PM Oli made his first foreign trip to India after he assumed his second prime ministership responsibilities. At the invitation of his Indian counterpart, Mr. Narendra Modi, PM Oli and his Nepali delegation travelled to  India on a State Visit during April 06-08, 2018.

During this trip, PM Oli and PM Modi inaugurated the Integrated Check Post at Birgunj (Nepal) with an aim to further boost cross-border trade and movement of people across Nepal-India border. The Nepal-India border is one of the oldest open borders in the world and remains one of the modern world’s very few such borders that witnesses flow of thousands of people on a single day.

This visit also witnessed the release of four joint-statements, one on the Nepali Prime Minister’s State Visit and three others on Nepal and India’s three key areas of interest. Three such statements were made, one each on, India-Nepal Statement on New Partnership in Agriculture, Expanding Rail Linkages: Connecting Raxaul in India to Kathmandu in Nepal, and New Connectivity between India and Nepal through Inland Waterways.

THE ISSUE

The World Bank Group has published the 17th edition of the institution’s flagship Doing Business Report earlier this month. The Doing Business Report 2020 ranks 190 world economies on the basis of their performance in 294 business regulatory reforms categorized under 12 distinct areas of business activities between May 2018 and May 2019. Overall, 115 economies implemented desired business regulatory reforms to make local business environments more conducive for business activities. Moreover, the top ten economies to make most progress in this year’s report include Saudi Arabia, Jordan, Togo, Bahrain, Tajikistan, Pakistan, Kuwait, China, India, and Nigeria.

OUR OBSERVATIONS

Nepal

Nepal, sandwiched between two of the world’s largest economies – China and India, has made a major shift this year and has been ranked in the 94th position, a jump in 16 position from last year’s report. This is the fourth time that Nepal has been ranked in Doing Business Report in the list of top 100 countries to do business category. Earlier, It was ranked in 55th, 100th and 99th positions in 2006, 2007 and 2016 reports respectively.

The four key factors that improved Nepal’s position this year include – i) Making it easier to deal with the construction permits by reducing fees for building permits and improving the online e-submissions platform, ii) Getting credit became easier as the Government of Nepal made it easy to access credit information by expanding credit bureau’s coverage, iii) Boosting trade across borders by reducing the time and cost to export and the time to import by opening the Integrated Check Post Birgunj at the Nepal–India border, and iv) Making it easy to enforce contracts by adopting a new code of civil procedure that introduces time standards for key court events.

However, despite the major jump in the 2020 Report, Nepal was not considered as one of the key improved nations as, during this period, the country made starting a business process more difficult, first by forcing the company representative him/herself to visit concerned government authority in-person from employee registration for social security purposes. In addition, the country also increased the property transfer registration fee that ultimately made doing business in Nepal more expensive and less convenient.

SAARC Region

There are no SAARC member countries ranked in the list of top 50 countries to do business in this year’s report. The last time a SAARC member country ranked in this category was in 2006 when Maldives was ranked in 31st position. But four of the eight SAARC member countries – Bhutan, India, Nepal and Sri Lanka – are ranked in the top 100 global economies to do business this year.

In 2020 Report, India and Pakistan made it to the list of top 10 most improved global economies in terms of ease of doing business and rank in 77th and 108th positions respectively. While India made cross-border trade easier by reducing time and costs needed for trades across border and required documentation works, Pakistan made property registration works easier and faster and also land administration system more transparent.

Though five of the eight SAARC member countries saw improvements this year – Bangladesh, India, Nepal, Pakistan and Sri Lanka, but only India, Nepal and Pakistan saw major shifts. Rest three member countries namely Afghanistan, Maldives and Bhutan saw decline in their rankings.

ASEAN Region

Overall, the ease of doing business in ASEAN Region has improved this year. This year, four of the ten ASEAN member countries saw improvements in their rankings – Malaysia, Myanmar, Philippines and Thailand. On the contrary, three member countries saw a decline in their rankings – Brunei, Cambodia and Vietnam. The rankings for three member countries – Indonesia, Lao PDR and Singapore – saw no changes.

Three of the ASAEN member countries have been performing very well since the inaugural issue of the Doing Business report. Since 2004 report itself, Singapore has been ranked as one of the best countries to do business and has consistently been ranked in the top positions. Similarly, Malaysia and Thailand have consistently been ranked within the range of top 50 global economies to do business.

China

In terms of ease of doing business, China (Mainland China) has improved a lot over the last decade. Though Hong Kong SAR and Taiwan had always been ranked as two of the most business lucrative places, Mainland China has consistently been improving its position in the rankings. Last year, it was the first time that Mainland China was ranked in the list of top 50 world economies to do business. Continuing the tradition, making a jump by 15 position, China ranks in the 31st position in the 2020 Report.

POTENTIAL IMPLICATIONS

Findings in the annual Doing Business Reports are crucial for governments, policy makers and investors worldwide. The annual reports give the concerned local, regional and global stakeholders an overall idea of a country’s business environment and related regulation procedures. Thus, these reports can affect the amount of business and investment activities that can happen in a particular country each year. In terms of investments, position of an economy in the Doing Business Index can affect the foreign direct investment (FDI) flow to that country.

However, these reports do not incorporate major issues that are crucial for success or failure of a business; for example macroeconomic stability, statuses the financial system, labour force quality, size of the market, business security, and most importantly incidences of bribery and corruption. Thus, it is not necessary that the rankings in the annual reports do get fully translated into actual business and investment activities.

ORIGIN OF DOING BUSINESS REPORTS/ INDEX

The World Bank Group, through institution’s 2002 launched Doing Business Project, has been conducting research and publishing annual Doing Business Reports since 2003. The credit for commencement of the idea of Doing Business Project can be attributed to a February 2002 QJE paper by Simeon Djankov, key architect of Doing Business Index, and three other economists.