Shumaila Rafiq 

BUSINESS AND POLITICS IN THE MUSLIM WORLD 

South Asia 

Weekly Report 113: from 27th March to 2nd April 2010 

Bangldesh:

POLITICAL

• Govt should 'expand tax net in some potential sectors’ • PM asks authorities to give jobs to disabled as per quota system • Khaleda to announce anti-govt programme by May

SOCIAL

• Bangladesh lifts ban on extrajudicial killing exhibition • Bangladesh can't meet power needs after protests

• Myanmar's persecuted Rohingyas starve in Bangladesh

• Power-starved Bangladesh bans evening use of ACs

• 70 fall sick due to food poisoning in Bangladesh

• 60 B’deshi para-police to join anti-militancy campaign

ECONOMIC

• Bangladesh to ask India to lift quota system for RMG

• Power crisis spurs desperate measures

• China to help establish deep-sea port in Bangladesh

• Bangladesh Bank installs solar power

• Reducing cost of doing business matters most • Economist digs deep into rich-poor gap

GEO-STRATEGIC

• India proposes joint venture LNG plant in Bangladesh

• From Afghanistan to Arakans, militants converge on Dhaka • Bangladesh To Call Army To Help Ease Water Crisis

BHUTAN

POLITICAL

• Bhutan PM meets Nepali counterpart SOCIAL

ECONOMIC

• Bhutan gets duty-free access for 18 products

GEO-STRATEGIC

• SAARC workshop on government performance management

MALDIVES

POLITICAL

• Lack of political will holds back cooperation in S Asia

• Freedom of expression not an excuse for 'crimes,' warns President

• Govt approves plan to rent Tabuhan Island to Maldives investor

SOCIAL

ECONOMIC

• Incorporating GNH into economy

• Donors pledge over $300 million to help Maldives • Maldives’ donor conference begins: Nearly 40 donors to help prop up Maldives’

economy • UAE grants 10 million dollar to Maldives

GEO-STRATEGIC

• Somali pirates hijack Taiwan ship • Turkey's Tekfen plans to bid for Maldives airport

• WWF's Earth Hour 2010 continues to roll out from east to west across the globe

NEPAL

POLITICAL

• Madhav Kumar refuses to resign as Nepal PM

• Nepal PM consulting leaders of Madhes-based parties • Security situation is improving: PM Nepal

• NA begins recruitment

• Minister Bhandari had visited China from 22 to 29 March.

• Nepal Maoists demand Rs. 2 mln for each militia joining politics • Maoists must disband its armed wing: Nepali leader

• Koirala wanted Nepal government to resign: Bhattarai

• GP Koirala strived for Nepal constitution even in last days: Sujata

• Threat of Return to Hindu State in Nepal Looms

SOCIAL

• Nepal halts issuance of passport affecting foreign job seekers

• India constructs school and health centre in Nepal

• Nepal's forests: Selling carbon credits

• Nepal Faces Food Crisis: WFP

ECONOMIC

• Britain Commits US$1.5 Million Aid For Elections In Nepal

• NRB introduces refinancing for productive sectors

• World Bank, Poverty, Aid, NGOs, and Development Paradox in Nepal • Research and development: Missing input in economic growth • Political economy of inclusive growth

GEO-STRATEGIC

• India, US hand in Nepal palace carnage, says ex-minister • China tightening border control in Tibet: Dalai Lama envoy • Interaction on China's book expo 2010 held in Nepal

SRILANKA

POLITICAL

• Former military chief was advised to not to enter politics, Sri Lanka President says • Sri Lanka president visits Tamil heartland

• 'Fonseka could die in custody'

• Sri Lanka Suspicious over UK • Bringing Tamils back into mainstream critical for new Lankan govt post elections:

• Sri Lanka President hands over rehabilitated Tiger cadres to parents

• Sri Lanka opposition parties discuss formation of a national reconciliation government

• Sri Lanka Opposition Leader says government does not have any development plans

• Sri Lanka's Opposition Leader calls on Speaker to summon urgent party leaders meeting

• Foreign election monitors to arrive in Sri Lanka today • Sri Lanka's president urges Tamil voters to trust him

• Previous governments erased country’s history - President

SOCIAL

• Sri Lanka police arrest opposition candidate for threatening a woman

• The Psychological Impact of Political Violence in Sri Lanka

ECONOMIC

• Sri Lanka cenbank says met all end-March IMF targets • Sri Lankan government to raid price gouging traders • Sri Lanka new port seen breaking even by 2015 • Sri Lanka govt rules out more protection, subsidies for business

• Sri Lankan Economy Accelerates at Fastest Pace in Five Quarters

• Sri Lanka economy grew 3.5-pct in 2009: statistics office • Lanka seeks India's help for power plant

GEO-STRATEGIC

• Sri Lanka accuses the UN

• India donates cement bags to the resettled families in Northern Sri Lanka

DETAILED NEWS:

PM asks authorities to give jobs to disabled as per quota system

Prime Minister (PM) Sheikh Hasina has directed the ministries and other departments concerned, including Public Service Commission (PCS), to implement quota facilities for the disabled persons in government services as per rules."I'm giving order to the authorities concerned to provide jobs to the people with disability as per their quota," she said. The PM was addressing the inaugural function of the 12th National Day for the Disabled and the 3rd World Autism Awareness Day at the National Foundation for the Disabled as chief guest in the city Friday, reports UNB.Chaired by Social Welfare Minister Enamul Hoque Mostafa Shahid, the function was also addressed by Prime Minister's Health Adviser Dr Syed Mudasser Ali and Social Welfare Secretary Kamrunnesa Khanam.This year, the day is being observed with the slogan - "We always stand by people with disability and autism.""The government will amend the existing law for the disabled, including provisions on autistic children, to formulate an up-to-date national policy for the best welfare of the physically and mentally challenged people and children", she said.The PM said, "There is a 10 per cent quota for people with disability in jobs for class III and IV employees of the government while the quota for the disable people in first class government jobs is one per cent"."The quota facilities for them (disabled people) are not always implemented", she added. Hasina also asked the government authorities to take best care of the disabled people so that none are deprived of government jobs on the pretext of their disability despite having academic qualifications.She said: "I can give an example of the Special Olympics, USA, which was held during our last tenure. Physically challenged sports men and women of our country secured 21 gold, nine silver and six bronze medals. So, if we can give them ideal environment and all necessary facilities, such people also can earn name and fame for the nation. The PM said that the people with disability would have to be provided not only with jobs, but proper environment and other logistic support must also be ensured for their convenience in respective offices and institutions.She noted that in many cases, buildings and offices are not constructed taking into account the problems of the physically challenged people and that's why such people find it very difficult to enter offices and other places.Hasina reiterated her previous announcement that any private offices and institution giving jobs to the disabled people would receive tax exemption facility.She also expressed her deep empathy with and sympathy to those children who face serious obstacles to get admitted to educational institutions of the country for unfriendly attitude to towards them even by the teachers. Khaleda to announce anti-govt programme by May

BNP chairperson and Leader of the Opposition in Parliament Khaleda Zia is likely to announce anti-government agitation programmes by next May after completing her ongoing political tours in the divisional headquarters.The party is thinking of declaring the agitation programmes from Sylhet city on the final leg of the divisional organisational tours, a reliable source at BNP told UNB Friday afternoon.The possible dates of the public rallies of most of the divisional cities where Khaleda Zia will address have been fixed up. The grand rally in Khulna city will be held on April 18, Barisal city on April 26, and Rajshahi city on May 4 and in the capital city on May 19, according to the party sources.The date for public rally in Sylhet city has not yet been finalized.In the first phase of anti-government agitation, the programmes may be confined to demonstration, procession and human chain as the BNP policymakers are now thinking, a mid-

level leader of the party said.He, however, said the present thoughts might be changed with the demand of the emerging situations.On March 29, BNP chairperson Khaleda Zia has kicked off her divisional tour by addressing a grand rally at the historic Laldigihi Maidan in the port city of Chittagong.At the rally, the leader of the opposition had said they would soon announce the anti-government agitation programme.

India proposes joint venture LNG plant in Bangladesh

New Delhi: As part of a growing attempt to improve political and economic ties, India has proposed to Bangladesh the setting up of a liquefied natural gas (LNG) terminal in that country in a joint venture (JV).The proposed terminal will be used to create a power generation capacity of around 1,000MW. According to the initial proposal, after meeting demand in Bangladesh, the remaining power will be supplied to India through a transmission link being set up between the two countries by Power Grid Corp. of India Ltd (PGCIL). The details of the plan would be decided after a Bangladeshi delegation visits India shortly to study the LNG terminals in the country. “Since Bangladesh does not have any coal, we suggested to them to set up an LNG terminal either through a JV with India or on their own. They can then use the gas to generate power and then sell it to India through the transmission link we are building,” said power secretary H.S. Brahma. “A delegation from Bangladesh will be visiting India shortly to take this forward.”While Bangladesh is short of power, with an installed capacity of 10,000MW, India has an installed capacity of 153,000MW, of which 16,822.85MW is gas-based.

India has two LNG regasification terminals. Both are located in Gujarat; one is owned by Petronet LNG Ltd (with a capacity of 7.5 million tonnes per annum, or mtpa) and the other by Shell India Pvt. Ltd (3.6 mtpa). The other terminals which are in the pipeline or at proposal stage include the ones at Dabhol (Maharastra), Kochi (Kerala), Ennore (Tamil Nadu) and Mundra (Gujarat).“Both sides are discussing the proposal and the technical people are having meetings,” said Enamul Hoque Chowdhry, minister, press at the Bangladesh high commission in New Delhi. The proposal was made by the Indian government during Brahma’s visit to Bangladesh in February to hold discussions on a power plant that NTPC Ltd is planning to set up there, apart from other areas of energy cooperation.“We had made this proposal to Tawfiq-e-Elahi Chowdhury, energy adviser to the prime minister of Bangladesh,” Brahma said. “Since the current producing fields in Bangladesh are old and due to the low pressure, the domestic gas is not enough, there is a need for gas.”

Bangladesh has substantial gas reserves of 135.8 billion cu.m but it has not been brought to commercial production as the country has resisted calls until now for the export of natural gas.The developments follow the January visit of Bangladesh Prime Minister Sheikh Hasina that was part of the bid to upgrade the bilateral relationship.New Delhi also wants to ensure closer cooperation so that Bangladesh acts against militant anti-India groups that have established bases on its soil, such as the Harkat-ul-Jihad-e-Islami, Jamaat-ul-Mujahidin, Purbo Banglar Communist Party, Bipplobi Communist Party and the Sarbahara Party.Bangladesh plans to set up two coal-fuelled power projects of 1,320MW each, one of which, requiring an investment of around Rs6,600 crore, will be offered to state-owned NTPC, India’s largest power generation utility, to be developed in a joint venture with the Bangladesh Power Development Board. NTPC

is also scouting for renovation, modernization, operation and maintenance opportunities in Bangladesh.

“This is a good proposal for both India and Bangladesh,” said Rupesh Sankhe, an equity research analyst at Angel Broking Ltd. “This can be made operational on the same lines as the India-Bhutan power trade. Bangladesh has huge gas reserves but investments are not happening for its development.”

Bangladesh lifts ban on extrajudicial killing exhibition

DHAKA — Bangladesh has lifted a ban on a photo exhibition on extrajudicial killings linked to security forces following protests from local and international rights groups, an official said.Police last week closed the exhibition by well-known local photographer Shahidul Alam on the hundreds of deaths attributed to the Rapid Action Battalion (RAB) force, formed six years ago this month."The police were withdrawn from the premises on Tuesday. There is no bar to holding the exhibition," an attorney general, M.K Rahman told AFP, adding that restrictions were lifted following a legal appeal by the show organisers.The decision follows a Reporters Without Borders statement released Wednesday that called on the the government to lift the ban, saying "the censorship of this exhibition is a serious violation of freedom of expression."The Paris-based media watchdog also demanded a probe into alleged death threats against Alam.At the weekend, a man entered the Drik Gallery and warned staff there that Alam "will meet his death on the streets (and) be gunned down", the statement said.The threats "cast doubt on the possibilities of freely debating human rights issues in Bangladesh," the group, known by its French initials, RSF, said.The so-called "crossfire" killings by the RAB have been condemned by local and international rights groups, including Amnesty International, who allege the deaths are deliberate executions often targeting political activists.RAB says that around 600 people have been killed by accident in "encounter/shootout" incidents since 2004.

Bangladesh can't meet power needs after protests

DHAKA (Reuters) - Bangladesh's power utility said on Monday it was unable to keep up with demand for electricity after farmers, women and students staged weekend protests against power cuts disrupting industry and households.Prime Minister Sheikh Hasina promised before and after her December 2008 election win to improve power supplies.She says the shortages are the result of years of inaction by her predecessors, including the 2001-2006 government of former prime minister Begum Khaleda Zia and a more recent two-year, army-backed interim government."We cannot cope with demand for electricity, rising by 10 percent a year," Saiful Islam, a director of the state-run Bangladesh Power Development Board, said by telephone."We are in a difficult cycle. We cannot produce electricity without gas and we cannot run factories without electricity. Authorities are trying hard to overcome the shortages, but this is not possible overnight."Bangladesh produces up to 3,900 megawatts of electricity a day, Islam said, 1,400 short of demand. The water and sewage authority says it is supplying 1.95 billion litres of water to Dhaka's 11 million residents, against demand of 2.2 billion.

Farmers at the weekend, unable to run machinery or irrigate their crops, tried to break into a utility office in the northern rice-growing Rajshahi district.

Women and children, angry that they cannot perform household tasks or complete schoolwork, waved empty pitchers, lanterns and other utensils in protests in the capital Dhaka and other towns.The government, led by the Awami League, has ordered two-hour rotating power cuts each evening but residents say outages are occuring more often and lasting longer. Businesses and plants have cut back on working hours and shopping malls have closed.

Bangladesh to ask India to lift quota system for RMG

Bangladesh has decided to urge India to lift the eight million pieces readymade garment quota, which exporters say hurt RMG shipments to the next-door neighbour.In the first year of the offer, the exporters could avail themselves of only 50 percent of the tariff rate quota (TRQ) due to the complex procedure. A TRQ is a trade policy tool used by a country to protect a domestically-produced commodity or product from competitive imports. The quota allows a limited quantity of specified merchandise in.At a recent meeting, the commerce ministry has decided that Bangladesh would soon ask India to withdraw TRQ for Bangladesh.A meeting chaired by Mostafa Mohiuddin, additional secretary of the commerce ministry, focused on TRQ and how it was hurting exports to India.It was decided that Bangladesh would explain its position first and then urge India to withdraw the ceiling on RMG exports. Abdus Salam Murshedy, president of Bangladesh Garments Manufacturers and Exporters Association (BGMEA), said: "Export under the TRQ involves a long procedure, which sometimes discourages exporters." "If India really wants to make the offer meaningful it must relax rules." Demand for Bangladesh RMG products is high on the Indian market, but India imposes 8 percent countervailing duty, 4 percent special additional duty and some extra duties in other categories.Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) Director Md Nurul Hasan said the TRQ offer is not viable for Bangladeshi manufacturers.With no quota ceiling in place, Bangladesh could make about $1 billion worth of garment exports a year, he hoped.Bangladesh signed an agreement with India in September 2008 to export eight million pieces duty-free garment items a year to narrow the trade gap between the two countries.In line with the agreement, New Delhi asked Dhaka to send the garment products by December 31 every year to reach the target.However, India put 158 apparel products on its sensitive list of South Asian Free Trade Agreement to hinder Bangladesh apparel exports to India.

Power crisis spurs desperate measures The government has barred use of air conditioners from 6 pm to 11 pm daily until further notice for all residences, private and public offices, businesses and shops. The bar, however, will not apply to hospitals, restaurants and hotels. The Bangladesh Energy Regulatory Commission, in an order issued Tuesday, also said that AC temperatures cannot be set below 25 degrees Centigrade during off-peak hours. The BERC order comes just a day after the government decided to shut down all the fertiliser factories to divert gas to power plants. The decision underscores the critical situation now prevailing in the power sector. It also instructed related authorities and persons to take required steps immediately and stated that the order will be in force with immediate effect until further notice. The energy regulator said its order, issued under the Energy Act 2003, is intended to tackle the crippling power outages, ensure uninterrupted power supply to farmers for irrigation and ease sufferings of Higher Secondary Certification examinees.

But questions were immediately raised on whether the regulatory body has the power to enforce the order. BERC chairman Syed Yusuf Hossain, questioned by reporters in a press briefing after announcing the measure, said, "If DESCO, DPDC and Petrobangla report to us then we will take measures." When asked what measures would be taken to punish violators, he said that the commission does not want to take any extreme measures like imposing fines or worse, but was rather appealing to the consumers. "We can only ask the consumers to obey the order and if they do not comply we'll disconnect their services", he said. According to the Energy Act 2003, if anyone violates the commission's orders it can penalise the consumer with a fine of up to Tk. 2000 or imprisonment for three months. Salim Mahmud, BERC member told bdnews24.com that the order is only applicable for consumers from the national grid and not for those who run ACs on other power sources like generators.

Bangladesh Bank installs solar power

Dhaka, March 30 (bdnews24.com) – Bangladesh Bank (BB) has installed a solar system on the rooftop of it's main building to reduce pressure on the demand for electricity. The central bank governor Atiur Rahman inaugurated the launch of the solar system, which is installed at a cost of more than Tk 1 crore on Tuesday. The solar system comprising 116 panels will provide electricity for 171 lights at the governor's office, one guest room, board room and the main conference room during the day, and boundary wall lighting at night. The solar system, expected to last about 20 years, has an 8 kilowatt capacity. The governor said that use of solar energy in domestic and offices can reduce pressure on national grid and can directly help in protecting the environment. He also said that the central bank will consider providing lone facility for its staff to install solar system for domestic use. The country produces 3500-4200 MW of electricity against a daily demand for 4000-5200 MW on average, according to official estimates. The government has decided to stop fertiliser production temporarily in the country to divert natural gas to the power plants. Frequent power failures cut the country's gross domestic product by around $1 billion annually, the World Bank has said.

The country would need $1.5 billion annual investment for power generation and transmission, and natural gas exploration, according to official estimates. Use of solar energy can be an alternative source for electricity, says an expert from Grameen Shakti. However, the cost of the Bangladesh Bank solar project, which stands at Tk 13,495,000, when scaled up is over 20 times more expensive than conventional power production, which costs around $1 million per megawatt capacity in terms of set up of fossil-fuel based power plants.

Myanmar's persecuted Rohingyas starve in Bangladesh

Thousands of Rohingyas, Muslim tribals from Myanmar who have taken refuge in neighbouringBangladesh following years of persecution, are allegedly facing 'arbitrary arrest, illegal expulsion, and forced internment', a charge hotly denied by Dhaka.

An international rights group has accused Bangladesh of 'violating human rights' in its crackdownon the unregistered refugees.

Physicians for Human Rights (PHR) has said that thousands of unregistered Rohingya refugees have been forced into makeshift camps in Cox's Bazar close to the Myanmar border and are facingstarvation. The organisation described the camps as 'open air prisons'.

Al Jazeera cited the PHR report as saying that the Bangladesh authorities were waging a campaign of 'arbitrary arrest, illegal expulsion, and forced internment'.

Police are 'systematically rounding up, jailing or summarily expelling these unregistered refugeesacross the Myanmar border in flagrant violation of the country's human rights obligations', the report said.

'The refugees are starving because the Bangladesh government has blocked aid groups fromproviding food to the camps,' VOA reported.

'Over the last few months, we have treated victims of violence, people who claim to have been beaten by police, claim to have been beaten by members of the host population, by people they'vebeen living next to for many years,' Paul Critchley, head of mission in Bangladesh for the aid groupMedecins Sans Frontieres was quoted as saying by the International Herald Tribune.

'They cannot receive general food distribution. It is illegal for them to work. All they can legally doin Bangladesh is starve to death,' Critchley said.

But Dhaka has described as 'baseless and malicious' the reports of rights abuse of the 'undocumented Myanmar nationals living in Bangladesh'.

Foreign Minister Dipu Moni has asked the UN High Commissioner for Refugees (UNHCR) toresume the repatriation process of 'all Myanmar refugees in the soonest possible time,' rejecting all options for their rehabilitation in Bangladesh.

The minister made the call after the newly appointed UNHCR representative in Bangladesh, StevenCraig Sanders, presented his credentials to her earlier this month, bdnews24 reported. She also asked the UN agency to discourage further entry of refugees into Bangladesh.

Earlier this month, the Malaysian Maritime Enforcement Agency arrested 93 Rohingya men, agedbetween 16 and 50 years, fleeing Myanmar on a boat off the island of Langkawi, CNN reported.

The Thai Navy had earlier intercepted the boat in international waters but gave the refugees foodand water supplies and then 'let them go on their way,' because they said they were heading toanother country, it stated.

'The vast majority of Rohingyas are effectively denied Myanmar citizenship; subjected to severerestrictions on freedom of movement; forced labour; forced evictions; and extortion and arbitrarytaxation,' an Amnesty International report said in February.

An estimated 300,000 Rohingyas sought refuge in Bangladesh after the junta cracked down onthem in late 1978. Another 250,000 fled to the country following a crackdown in the early 1990s.

Though Bangladesh and Myanmar, with the help of the UNHCR, repatriated most of them in successive years, 14,000 of them refused to return home fearing persecution or starvation there.Bangladesh now recognises only about 25,000 Rohingyas as refugees who live in two officialcamps -- Kutupalong and Naya Para -- in Cox's Bazar close to the Myanmar border. It calls the others economic migrants who must be repatriated, bdnews24.com reported

From Afghanistan to Arakans, militants converge on Dhaka

Dhaka, March 30 (Calcutta Tube) At least 15 foreign militant organisations were active or are still operating in Bangladesh since 1991 using the country as a safe haven or transit point to infiltrate India and other neighbouring countries, those nabbed have confessed.

The outfits who found access in Bangladesh are based in Afghanistan, Pakistan, India and Myanmar, using fake passports, engaging in militancy and funding their operations partly by printing fake Indian rupees and US dollars.

The statements of detained militants also reveal agents of ‘a Pakistani intelligence agency not only coordinated the militants’ activities in Bangladesh but also provided them with necessary funds and training,’ The Daily Star newspaper said quoting official sources.

Statements of several detained foreign and local militants have been recorded by different Bangladeshi intelligence and law-enforcement agencies dealing with militancy, the newspaper said Tuesday.

Operatives of several groups used to visit Bangladesh from Pakistan and then India to commit their activities, while many from India also sneaked into Bangladesh and then visited Pakistan with fake Bangladeshi passports to get training in arms and explosives.

Director General of Rapid Action Battalion (Rab) Hassan Mahmood Khandkar, said: ‘Now Bangladesh is no more a comfortable place for local or foreign militants as we constantly remain vigilant and go after militants upon instructions of the government.’

Now some militant groups are generating funds by selling counterfeit Indian currencies in India. The counterfeit currencies, especially Indian rupees and US dollars, are mainly forged in Pakistan and carried to Bangladesh via Dubai.

Then a strong syndicate of militants and criminals supply the fake currencies in India.

‘We’ve detected at least three such gangs having around 50 members. One of the gangs is led by Bangladeshi citizen Majumder, one by Pakistani citizen Sarfaraz and the other by another Pakistani named Mohammad Danish,’ says a top police official asking not to be identified.

Recently, an international money transfer has been detected through which some fund came from Pakistan to detained Pakistani national Rezwan.

Operatives of different foreign militant groups started visiting Bangladesh and spreading their tentacles with the help of banned local militant group Huji after the end of the Afghan war against Soviet forces in 1991.

This coincided with a government headed by Begum Khaleda Zia taking office.

The militant organisations operated almost undisturbed from 1991 to 1998 and then between 2001 and 2005 under the nose of the local administration, the report said.

‘During the BNP-Jamaat rule (2001-06) activities of the foreign militants marked a serious rise under the nose of the administration. Some of them were held and later given a safe passage,’ says a law enforcer requesting anonymity.

The organisations are Pakistan-based Lashkar-e-Taiba (LeT), Tehrik-e-Jehad-e-Islami-Kashmiri (TJI), Harkat-ul Mujahideen, Harkat-ul-Jehadul Islami, Hizb-ul Mujahideen (HuM), Hezbe Islami, Jamiatul Mujahideen, Harkatul Ansar, Jammu and Kashmir Liberation Front (JKLF), Jaish-e-Mohammed (JeM), India-based Asif Reza Commando Force (ARCF), Myanmar-based militant groups Rohingya Solidarity Organisation (RSO), Arakan Rohingya National Organization (ARNO) and National United Party of Arakan (NUPA).

The names of ARCF and LeT surfaced after the arrest of its leaders Indian citizens Mufti Obaidullah and Moulana Monsur Ali in May last year. The ARCF used to work for LeT.

Bangladesh To Call Army To Help Ease Water Crisis

DHAKA, March 29 (Bernama) -- The Bangladeshi government will deploy army personnel from April 1 in the country's capital Dhaka in aid of the city's Water Supply and Sewerage Authority to help ease the ongoing water crisis. Chairman of the Dhaka Water Supply and Sewerage Authority ( Dhaka WASA) Board, Golam Mostafa, told Xinhua Monday, that like other years, army personnel will be deployed in Dhaka from April 1 to ease the water crisis. "They (army personnel) will help the Dhaka WASA to maintain security and water management at every zone and pump station across the capital city," Xinhua cited him as saying. An acute water shortage has escalated the plight of Bangladesh' s capital dwellers as the persistent gas and power crises have already plagued life all over the country with the mercury rising to a boiling point in recent days. The Dhaka WASA has a daily capacity to supply 1.95 billion liters of water to the capital against a demand of 2.20 billion liters.

Power-starved Bangladesh bans evening use of ACs

Bangladesh has banned use of air coolers and air conditioners duringevening peak hours in all establishments, except hospitals and hotels, acrossthe country to tackle the ongoing power crisis.

The government took the step Tuesday amidst reports that power cuts inmajor hospitals, including the Dhaka Medical college Hospital, had causeddisruption in surgery procedures.

ACs in all residential buildings, government and private organisations,business organisations, markets and shops would have to be turned off

between 6.00 p.m. and 11.00 p.m. Hospitals, hotels and restaurants havebeen exempted, Bangladesh Energy Regulatory Commission (BERC)chairman Syed Yusuf Hossain announced Tuesday.

The commission also asked AC users not to set temperature below 25degree Celsius during off-peak hours to minimise electricity consumption.

Violators could be punished with power cuts. But authorities are unsure ofenforcing a nationwide ban as they do not have adequate staff.

Yusuf said around 200 MW to 500 MW of electricity would be saved if theACs remained shut during evening hours, the New Age newspaper reported.

When asked what steps would be taken if ACs were not shut duringevening peak hours, BERC member Selim Mahmud said the commissionhad the right to punish anyone if he or she disobeys the order.

'BERC can impose administrative fine of Tk 2,000 or sentence anyone to three months in jail,' he said.

Most parts of the country are going through 16-18 hours of power cuts while city dwellers are facing around 10-12 hours of load shedding as the Power Development Board (PDB) can generate only around 3,800 MW of electricity against a total demand of 5,500-6000 MW.

Bangladesh is looking to import power from India and Bhutan, the reportsaid.

Prime Minister Sheikh Hasina signed a deal for power import during hervisit to India in January.

Power shortage has become a political issue with the opposition including iton its agenda for agitation.

Former prime minister and opposition leader Khaleda Zia termed it as'government propaganda' that nothing was done to augment power duringher rule in 2001-06.

Zia claimed that power generation of 1,500 MW had been added during herregime.

70 fall sick due to food poisoning in Bangladesh

Some 70 people fell sick after eating leftover wedding food in Bangladesh'snorthwestern Rangpur district town, some 304 km away from the capital Dhaka, early Thursday.

They were admitted to local hospitals. Quoting local sources, leading English newspaper The Daily Star in itsonline edition said a wedding party was held at a community center in thetown Wednesday night. After the party, the leftover food was distributed among the poor people ofthat area at night. The people ate the food and started vomiting and also complained ofabdominal pain. It might be an incident of food poisoning, the report addedquoting hospital sources. Earlier, some 780 students of nine primary schools in Bangladeshreportedly fell sick after having eaten biscuits distributed under a feedingprogram of the World Food Program in June last year.

60 B’deshi para-police to join anti-militancy campaign

Bangladesh is planning to engage nearly 60 lakh irregular para-police 'Ansar' men in the anti-militancy campaign as part of an intensified vigil onright-wing Islamic outfitsOn the Prime Minister's directive, a process isnow underway to make rules specifying the duties and jurisdictions of Ansar and VDP (Village Defence Party)," a local newspaper today quotedHome Minister Sahara Khatun as saying. She said that currently there were 59.42 lakh Ansar VDP members acrossthe country who would now join the police and security forces in combating militancy and maintain law and order. The minister’s comments came as Prime Minister Sheikh Hasina'sgovernment revamped an anti-militant campaign constituting a high-powered national committee to coordinate intelligence activities particularly against the militancy.

Security officials earlier said some militant groups like Jamaatul

Mujahideen Bangladesh (JMB) and Harkatul Jihad (HuJI) were trying toregroup in different names in view of the massive anti-militant campaign as the government so far banned four of the outfits JMB, HuJI, Jagrata MuslimJanata Bangladesh and Shahadat-e al Hikma.

Reducing cost of doing business matters most

(FDI) to Bangladesh has fallen markedly in recent times. According to thelatest central bank statistics, the FDI flow registered a 67 per cent fall in the

first half of the current financial year from that of the corresponding periodof the last fiscal. An amount of US$ 197 million FDI was received duringthe July-December period of the fiscal 2009-10 as against $603 million during the same period of last fiscal. However, Bangladesh's track record relating to FDI inflow has never beenencouraging. The energy and telecommunications sectors could attract abulk of the foreign investment. But due to foot-dragging on the part of the government to float international tenders for both on-shore and offshore hydrocarbon blocks, foreign investment to the energy sector has more or less dried up in recent years. The official circle is, however, optimisticabout FDI inflow picking up soon after the announcement of guidelines forthe much-talked-about public private partnership (PPP) initiative. Manyexpect that the power, energy and telecom sectors would be able to attract asizeable FDI under PPP. But the PPP policy guidelines are yet to befinalised. There is a debate over the investment climate in Bangladesh that isotherwise acclaimed as liberal. The Board of Investment (BoI) -- country's investment promotion wing -- is trying to attract foreign direct investment (FDI) by offering a series of incentives to the overseas investors. But stillmuch-sought-after FDI is not coming to the desired level. Why is this happening? What are the negative sides of business climate in the country? According to a World Bank (WB) report, unlike many other South Asiansisters, Bangladesh has one of the worst business environments in SouthAsia. Restrictive trade policy, characterised by poor infrastructure, red tapes and so on, still pose as big hurdles on the way to FDI inflows. Successivegovernments in Bangladesh claimed substantial progress in reformingbusiness environment in the country. But many of such reform measurescould not be implemented due to typical bureaucratic inertia. In reality,some areas of business are over-regulated while others are less regulated. Only reforms can strike a balance between the two factors. An IFC study -- Doing Business 2009 -- showed some improvements in some of the business indicators of the country. Released last year, the reportsaid Bangladesh has reduced procedures, time and cost to start a business, simplifying registration formalities to some extent. The study said nameclearance and registration for starting a business in the country are done in one day, which took minimum seven days or more in the past. But the costof registering a property is still the highest -- 10.4 per cent of the entire value -- among the South Asian countries. In fact, there are some key areas of business where reforms are badlyneeded. The focus of such reforms should have given to facilitate easyaccess to loans for small and medium enterprises, improvement of customs

clearance process, making tax payment easier, encouraging more business competition, simplifying labour regulations and land-related issues. Besides, the businesses in the country face some major challenges likecapital scarcity, inflation, corruption, labour problems etc. Bangladesh's latest position in the Doing Business index suggested thatdespite some encouraging steps taken by the previous government tochange things for the better, the situation did not improve that much. Theindicators of business conditions are not still conducive, more in reality than in appearance, to attracting major investment opportunities from theoutside world. The same need to improve -- substantially -- for creating a major stimulus among the investors -- both local and foreign. A good number of industrial units throughout the country are now out of operation because of gas shortage. The gas supply situation has worsenedso much that thousands of residents of Dhaka city from morning toafternoon are not getting gas supply to their homes. The power supply situation is even worse. Most industrial units are keeping their operationsunhindered through captive power generators during load shedding, thusadding to their cost. The power outage, already in operation in the name ofload management, is now a routine affair. The possibility of any improvement in gas and power supply situation within next few months isremote. In fact, country's bid to win more FDI calls for reducing the cost of doingbusiness. The country's economy should aim at becoming more and more competitive, especially to promote its external trade. Bangladesh has manythings to do for making its economy more competitive. A main requirementwould be to drastically improve and expand its transportation infrastructureand solve the related ills. Reports say the Bangladesh economy can increase its economic output byone per cent and foreign trade by 20 per cent a year by makingtransportation on the Dhaka-Chittagong corridor more efficient. It was pointed out that informal payments and other inefficiencies increase transport-related import costs by up to 40 per cent. A drastic improvementin transportation on this corridor is long overdue. A similar transportationimprovement throughout the country would help boost nation economicoutput. But the improvement calls for building better highways, bettermaintenance of the infrastructure and other supportive action including theelimination of extortion. All these systems of transportation need to be developed, and pretty fast, tokeep pace with business and economic development. Only a comprehensivemaster plan can develop the communication networks simultaneously. With the facilities in place, Bangladesh can hope to emerge as an attractive

investment site, by substantially reducing cost of doing business.

Economist digs deep into rich-poor gap

Renowned economist and researcher Prof Nurul Islam said yesterday anunusual hike in land prices, the culture of default loan with banks andmassive tax evasion are widening the rich-poor gap in Bangladesh.

“These are good enough to aggravate inequality in Bangladesh,” said Islam,deputy chairman of the first planning commission of the country, afterreceiving Bangladesh Bank Award-2009 at a function at Sonargaon Hotel in Dhaka.

He also criticised a recent government move on establishing a banking division to oversee the financial sector, saying that it has diluted thesupervision power of the central bank over the financial industry.

Finance Minister AMA Muhith addressed the function as chief guest. BBGovernor Dr Atiur Rahman chaired the programme, also attended byformer ministers, advisers, economists and chief executive officers of banksand financial institutions.

Islam focused on financial markets, the recent financial crisis, autonomy ofthe central bank, necessity of research economy, export, safety netmeasures and inequality.

He said rising inequality is a global phenomenon and the recent economiccrisis has worsened it further.

The economist said the US has the highest inequality rate in the world andit is increasing tremendously in China.

In recent years, the disparity widened in Bangladesh, he said.

The recent price hike of land, what he said 'astronomical increase', hasaggravated the inequality. The other two reasons he identified are:Systematic default of bank loans and massive tax evasion.

The economist said ensuring independence of the central bank is vital for astable financial market. He said he was surprised to see the BB'ssupervision power getting diluted.

The finance ministry has recently formed a banking and finance division to oversee the activities in the sector.

Islam said international experience is rather exceptional.

In the banking industry's assets, advances and deposits, state-owned banks have almost 40 percent stake. Many private banks' directors are also politically leaning towards the government, he said.

So, the BB's supervision is already diluted, he added.

"I don't see future without a research economy. But it needs highly qualifiedand motivated staffs and, of course, compensation."

He also advised the BB to be cautious about capital flow although itremained immune to the recent global crisis.

Bangladesh economy is export dependent and Prof Islam said it mightcause instability, particularly during the time of the current global shocks.

He suggested going for specialisation and diversification of exports.

The Bangladesh Bank award was launched in 1999. Prof Rehman Sobhanwas awarded in the first year. Since then no award was given. Prof NurulIslam was given the second one for his outstanding contribution to economy, education, research and independence of Bangladesh.

Islam held many important positions both at home and abroad.

After doing his PhD in economics from Harvard University in 1955, heworked as a professor of economics at Dhaka University, director of the Pakistan Institute of Development Economics (later Bangladesh Institute ofDevelopment Studies).

He was a fellow at St. Antony's College at Oxford University, assistantdirector general of the United Nations Food and Agricultural Organisation, and adviser at the International Food Policy Research Institute (IFPRI). Heheld several visiting academic appointments at Yale and Cambridgeuniversities and both the London and the Netherlands School of Economics.

He was a member and later the chairman of the UN Committee ofDevelopment Planning Policy.

China's currency and trade practices

OVER the last 60 years, China enjoyed an 8.1% gross domestic product(GDP) growth, making its 2008 aggregate output 77 times higher than thatof the 1949 level when the new China was created. During 1980-2008 period, it has maintained an enviable average growth rate of 10%, became(as of 2008) the third largest economy in the world and glided into the lower middle income group with per capita gross national income of $2940

(current US $, World Bank). In recent years much of this growth -a whooping 35% -- is attributed to its export driven manufacturing sector. Part of its 35% export growth (EXPG) is achieved by artificially letting its currency stay undervalued (pegged tothe dollar) making its exports cheaper relative to its competitors, which istantamount to export subsidy. For example, during 2001-08, net exports (= exports - imports) and the investment in building capacity in tradable sectors have accounted for over 60% of China's growth compared to 40% inthe 1990s. This is much larger than the 2001-08 average of the G7 (16%), euro area (30%) and the rest of Asia (35%). Because of these unfair currency manipulations and trade practices, China has is now facing coordinated punitive actions from nearly all industrializedeconomies. China has been resisting enormous pressure from nearly all industrialised economies to revalue its currency upward. These countries argue that theundervalued Chinese renminbi is taking a big bite out of their exportcompetitiveness. Recent estimates claim that the renminbi is undervaluedby 20 to 40 per cent against the dollar. Many believe that China's accumulation of over $2.2 trillion forex reserves is by-product of its undervalued currency. To keep the renminbi below its market value, Chinese Central Bankaggressively intervenes in the forex market -- selling renminbi and buying dollar denominated assets. It is also widely viewed that China's undervaluedcurrency has fuelled the global financial imbalances -- one of the major sources of the current financial and economic crisis. Both the US and theEuropean Union (EU) countries believe that unless China revalues its currency upward, the global imbalances are likely to continue. One wonders why the world's fast growing economy manipulates itscurrency to keep undervalued. Harvard economist argues that China'sgrowth would be reduced by more than two per cent if its currency were toappreciate by 25 per cent in real terms. The question then is: How long could China maintain its high EXPG andkeep its GDP growing around 10% or better while keeping its currencyundervalued? Despite being hit by the global financial crisis, China's economy still grewaround 7.7% in 2009 and the 2010 growth forecast is 9.2%. Experts believe,China still has some room to expand its EXPG. In fact, China's vicecommerce minister Zhong Shan recently emphasised that EXPG which is vital for China's GDP growth and job creation will continue to grow in

2010. He argued that exporting 30 million shirts involves employment of10,000 people, thus making their families or 30,000 people well off. Maintaining its high EXPG and expansion of market share would require asubstantial price cut for its products through some combination of (1)increases in relative productivity to lower costs below that of competitors,(2) a squeeze in corporate profits, and (3) greater implicit or explicit subsidies through continued price distortions (IMF Working Paper, August2009). However, on-going trade restrictions and anti-dumping duties (ADDs) from the EU and the US for its trade practices and currencymanipulations may slow down its continued EXPG, thus hindering GDPgrowth as well. Stupefied by the worst economic crisis in decades, the 27- nation EU block has launched a series of unprecedented ADDs against China of which fiveseparate impositions were made during July and August 2009, covering a wide range of products. For example, the EU on September 24 imposed afive-year official ADDs of 39.2% and 30% on seamless steel pipes andaluminium foil respectively. There are 19 countries and regions which hadrecently launched 103 trade-related investigations against Chinese products. The US-China Economic and Security Review Commission recently asserted that China's trade practices that have piled up huge surplusescausing global trade imbalances has hastened global financial crisis that started in the US 2008. The Commission claimed that even the $585 billionfiscal stimulus package that China has used to withstand the financial crisis,mainly supported more EXPG activities. China's 2008 trade surplus withthe US was $268 billion. From 2006 to 2008, imports of Chinese steel pipes increased by a massive203%. In September 2009, the US announced to slap duties on Chinese-made tires to protect local US industry. In June last year, Europe and theUS accused China for violating WTO provisions by restricting exports of essential commodities (example, bauxite, zinc, yellow phosphorus silicon,coke and other raw materials) to give Chinese manufacturers an unfair edgeover their international rivals. The US trade representative, Ron Kirk, said, "China had imposed quotas, export duties, and other costs on raw materials used in the production ofsteel, chemicals, and aluminum. These restrictions include minimum exportprices and tariffs of up to 70%, on a range of raw materials of which it is a major producer. The US complained that China produced 336m tonnes ofcoke in 2008 but only 12m tonnes were allowed for export. About a dozen Chinese products are believed to have benefited fromgovernment subsidies or are being sold in the US at less than fair value.

This triggered the US. Department of Commerce to set preliminary ADDsof 14.36% on four Chinese producers or exporters of steel grating productsto offset unfairly low prices (Reuters, Dec. 29). Many other exporters ofother products would receive an ADD at rate of 145.18%. The 2008 financial crisis hit China's export sector hard because of slowingdemand for its products from the US and EU countries. Had China divertedmore resources to its domestic consumer sector, the adverse effects of the global crisis would have been much less. That is exactly what Bangladeshand other developing countries should do - invest in products to meet domestic demand and thus insulate the economy from adverse externalshocks. China's export-oriented growth is comparable to those of Korea, Japan, andthe newly industrialised Asian Tigers, which have all maintained highEXPG through increasing market shares over a sustained period. Is Chinabeing discriminated now? Yes, no or may be. However, China is striking back after the US, the EU, and other countries slapped tariffs and filedcomplaints about Chinese steel and commodity products to the WTO.However, to maintain its overall economic growth, China can ill afford atrade war with its most important trading partners. China must realize though, that its unfair trade practices and currency manipulations arehurting EXPG of other developing economies like Bangladesh. China can still achieve a substantial GDP growth without resorting tocurrency manipulations and unfair trade practices. Much of China's pastgrowth testify to the validity of the convergence hypothesis, which was alsothe basis of Japan's becoming an advanced economy. India is on track doingthe same. Implication of the convergence hypothesis is that less developed countries (such as China, Indian, Bangladesh and others) can boost their productivity(output per worker) growth rates faster than that of the advanced countriesby transferring and adopting advanced technologies. This is how it works: Advanced economies are already using thesetechnologies and for them to grow any faster than the prevailing growth ratewould require innovating new technologies -- and that do not come by easily and quickly. The graph depicts the convergence of two hypothetical economies over time -- showing how a poorer country like Bangladesh --through faster productivity growth rate -- can glide into middle income and higher income echelon -- thereby narrowing the income gap over time and hence achieve poverty reduction.

Govt should 'expand tax net in some potential sectors’

expand tax net in some potential sectors including capital market, real estatesector, agriculture and private educations, said speakers at a roundtablediscussion Thursday. They have also proposed to simplify income tax return form, review tax exemptions, strengthen tax department and recruit more manpower for therevenue board. Chamber leaders and economists have proposed to explore more ways toincrease tax base, thwart tax evasion and reduce corporate tax rates duringthe discussion held at a city hotel. The National Board of Revenue (NBR) has arranged the meeting to shareviews on challenges of direct tax in Bangladesh with the chamber leaders, local think tank and policy makers. Finance minister AMA Muhith waspresent on the occasion. Mr. Muhith said all people should bring under tax net and pay a minimumtax to improve existing tax GDP ratio and ensure tax compliance in the country. "Everyone who has earning should pay tax, at least Tk 10, for expansion oftax net. For this, elimination of fear factors and increase of manpower forthe NBR is needed," he said in the round table. Muhith said all people including the member of parliament must pay tax. "I was surprised to know that 42 members of parliament did not pay tax lastyear," he said. In the meeting, Muhith strongly differed on a proposal made by MP AliAshraf on rejection of foreign aid. He said foreign aid is needed to share information and technical know-how. He also underscored the need for avoiding personal contact between taxmenand taxpayers to reduce harassment on tax payment. NBR chairman Dr. Nasiruddin Ahmed in his opening remarks said the number of TIN (Taxpayers' Identification Number) holder accounts for only1.5 per cent of the country's 150 million people. "The number of TIN holders in Bangladesh is 2.238 million, out of which97.63 per cent are non-corporate TIN holders and the remaining 2.37 per cent are corporate ones," he said.

The existence of a large "underground economy" is responsible for low taxbase in Bangladesh, he said. Income tax ordinance 1984 offers a variety of tax exemptions andincentives and their continuation and misuse erode the tax base and putstrains on an already heavily challenged tax administration, he said. He focused on five-point steps of revenue board to broaden tax net thatinclude education programme for taxpayers, survey, online income tax return submission, electronic record management and enhancement ofscope for withholding tax. "Empirical evidence shows that tax incentives and exemptions contributesignificantly towards tax evasion practices," he said. No attempt has been made to estimate the amount of tax evasion in Bangladesh, he added. The NBR is in the process of strengthening the Central Intelligence Cell(CIC) to combat tax evasion, he said. Dr. Mashiur Rahman, economic affairs adviser to the prime minister, hasemphasised on imposing less tax on small businesses for first few years oftheir businesses. It is necessary to build tax payment culture first rather than imposing heavytax on them, he said. He has stressed the need for ensuring timely refund of the money paid inexcess of due tax to the tax payers. NBR member Aminur Rahman, who heads the tax policy department,presented key note paper on tax base expansion and combating tax evasion. Mustafizur Rahman, executive director of Centre for Policy Dialogue(CPD), said the government has to evaluate the outcome of investment ofundisclosed money. He also requested to explore all best practices to launch online tax returnsystem. Ahsan H Mansur, executive director of Policy Research Institute (PRI), saidthere is some income generating areas such as interest amount of bankremaining out of tax net. He has also emphasised on sharing information between income tax and

Vat departments for checking tax evasion through concealment ofinformation. He also said the government has to offer tax free investment for non-resident Bangladeshis. Square group Chairman Samson H Chowdhury has urged the revenue boardto eliminate complexities in income tax payment. He also demanded withdrawal of the provision of imposing tax on discount, which is a promotional work of business. M Anis-ud Dawla, president of Metropolitan Chamber of Commerce and Industry (MCCI), has requestedthe government to utilise the tax money properly to encourage people topay tax. He also stressed the need for introducing TIN card, which will ensure a social status of taxpayers in public places. It is necessary to reduce tax rates to collect more tax by expanding its net,he said. Corporate tax rates should be lowered as it is highest in the region, he saidadding that tax collection status from professionals need proper scrutiny. He also urged the government to bring down tax-free income ceiling at a rational level. Sajjad Zahir, director of Economic Resource Group, said the governmentshould take a cautious move to increase tax rates in the next budget as thecountry's economy is already affected by gas and power crisis. Federation of Bangladesh Chambers Commerce and Industry (FBCCI)director Abdul Huq has urged the government to monitor land purchasewhich, he said, is a grey area. He said existing policy is helping tax evasion through sale and purchase ofland as the government offers tax benefit on investment of undisclosedmoney here. He said the previous caretaker government has abused CIC of NBR, which is a major reason of lack of trust and confidence among the investors. Dhaka Chamber of Commerce and Industry (DCCI) president Abul KasemKhan, said: "The government should differentiate taxpayers from non-taxpayers by providing tax card, which will give them a status in the society."

He proposed to impose heavy tax on legally earned undisclosed income. AM Hamim Rahmatullah, president of Foreign Investors Chamber ofCommerce and Industry (FICCI), has requested the government to waive 15per cent tax on rented commercial space and frame a long term policy toboost investment.

BHUTAN

Bhutan PM meets Nepali counterpart

KATHMANDU: Bhutanese Prime Minister Jigme Y Thinley, who is on aone-day visit to Nepal to attend the 13th day ritual of late Nepali Congress President Girija Prasad Koirala, held bilateral discussions with PrimeMinister Madhav Kumar Nepal in the latter's office today. Stating that Nepal had lost a guardian of Nepal's democratic movement andthe SAARC a top leader with the demise of Koirala, Thinley extended a message of condolence to the government and the people of Nepal on hisown and Bhutanese people's behalf. The PM took up the contentious issue of Bhutanese refugees living herewith Thinley and sought full support of his government to send them back home. "It is the birth right of the Butanese refugees to get repatriatedrespectfully as the third country settlement is not a solution to the crisis,"Rajan Bhattarai, Foreign Relations Advisor to the PM, quoted him tellinghis Bhutanese counterpart. In reply, Bhutanese PM said more bilateral talks were needed to amicablyredress the refugees' woes. The two prime ministers also held discussion onupcoming SAARC Summit scheduled to take place in Bhutan. "Bhutan isconcerned about the refugee crisis and is ready to hold a chain of talks withNepal in association with world community, though third countrysettlement process is underway," Thinley said. They agreed that theSAARC countries were required to give top priority to the burning issue of climate change in a united way during the summit. Thinley returned homelater in the evening. Meanwhile, Tamrat Samuel, Director, Asia-Pacific Division of the UN's Department of Political Affairs held talks with Nepal on the progress madein the ongoing peace process and the extension of UNMIN's tenure. Duringthe meet, the PM told him that the government was yet to reach a decisionwhether to extend the tenure of the UNMIN, as it was inching closer to takethe peace process to the logical end and promulgate new constitution by May 28.

Lack of political will holds back cooperation in S Asia

Absence of political will is the only roadblock that chokes flows of trade,capital and ideas across South Asia and makes sharing of its vital water and energy resources difficult for the region, a former World Bank official said. Praful Patel, who held the bank's regional vice presidency until 2009, saidthat regional cooperation could help South Asia better distribute water fromthe Himalayas and its common international rivers, which supply theworld's most densely populated flood plains with 700 million-plus people. The Himalayas comprise the world's highest mountains and their glaciers are the depositories of largest body of ice after polar region. "You've no other impediment than politics," Mr Patel said in an interview. He said: "The region has the knowledge, institutions and even solutions todrive the regional integration agenda. But political economy is holding backthat critical process." Mr Patel, currently a board member of African Center for EconomicTransformation (ACET), flew in to Dhaka last week from New Delhi toforge strategic cooperation between South Asia and Africa-initially at the civil society level. He accompanied ACET President KY Amoako on theregional tour. He said South Asia is the least integrated region in the world as intra-regional trade represents a minuscule 2.0 per cent of its gross domestic product, while it is over 20 per cent for the East Asian region. Energy trade is also low in South Asia. India, Nepal and Bhutan areinvolved in trading of electricity. Only 7.0 per cent of international calls areregional, compared to 71 per cent for East Asia.The case of Africa is no better either, with the intra-regional trade representing only 5 per cent of the continent's $200 billion total trade.Referring to Africa's Nile Basin Initiative and Senegal River Development, Mr Patel said the countriescould draw lessons from the two regional initiatives and thereby avert apotential war for securing the depleting water resources in South Asia. He said that the Nile basin flowed through 15 African nations and the NileTreaty was signed in the 1950s.The sharing of water from the Ganges, even after the historic 1997 treaty between Bangladesh and India, remainscontentious for both the nations, which have 54 transnational rivers.ACET president said the South Asian governments should establish a regionaltransport corridor, like the one in Africa, to benefit land-locked Nepal and Bhutan.

Poor connectivity, cross-border conflicts, and concerns about security, have all contributed to South Asia being the least integrated region in the world,the World Bank said in a study.Mr Patel was positive about the recent visit of Sheikh Hasina to India and the signing of protocols and treaties, sayingthese are important steps toward fostering regional cooperation. "That visit has opened up new opportunities. And opening up of Chittagong Port to India will play a critical role in promoting the regional integrationagenda," he said. Policy Research Institute of Bangladesh (PRI) has estimated income fromexports, transit and port fees to rise by about US$1.0 billion a year in the short-to-medium term. Over the longer-term, experts say more and better regional cooperation willhelp increase Bangladesh's growth rate by an additional 2.0 percentagepoints per year. If harnessed in a right way, Mr Patel said, demographics could spawn economic prosperity for both the regions as much of Europe and Asia'sJapan and China are faced with the aging time-bomb. "South Asia hosts 700-800 million youth population below 25 who can make a hugedifference to the development of the region," he added. Dr Amoako said unfolding growth stories have put both the regions on theinternational spotlight, although around 40 per cent of the world's poor areconcentrated in South Asia while the African region is home to another 30per cent. He said African nations have much to learn from Bangladesh, particularlyfrom its microfinance institutions that are playing significant role in thedevelopment process. "Next century is going to be Asia's. So we Africans need to learn from thisshining continent," said Amoako, who served with the United Nation'sEconomic Commission for Africa.

Bhutan gets duty-free access for 18 products

Dhaka, March 31 (bdnews24.com)--Eighteen Bhutanese products are set to get duty free access to Bangladesh in a day or two, commerce minister Faruk Khan said Wednesday.

Under the arrangement, Bhutan will be able to export fresh and chilled vegetables, pulses, cardamom, ginger, fresh fruits, jam, fruit juices, mineralwater, limestone, gypsum, calcium carbonate, particle board, ferro-silicon, semi-finished products of iron, non-alloy steel and others without export duty. "This will result in reduction of prices of fruits, fruit products, vegetables and others," said Khan. In Bhutan, vegetables grow in abundance duringJune-July when most of the cultivable land goes under water in Bangladesh. "Thus, we can get winter vegetables at affordable prices in the summer," the minister said. Khan said Thimpu got the facility considering "our friendship with Bhutan". Prime minister Sheikh Hasina during her visit to Bhutan in November last year declared giving 18 Bhutanese products(having highest 15 percent duty) duty-free access. Bhutan has been giving Bangladesh almost duty-free access to such products as garments, computer accessories, dry foods, pharmaceuticals and toiletries. Bangladesh's exports to Bhutan total less than $1 million, while Bhutan's exports to Bangladesh stand at around $14 million, according tothe commerce ministry figures. Bhutan's main export items are mineralproducts, foodstuffs, fruits, beverages and oats. Commerce ministry officials say, the Bhutanese goods-laden trucks will reach warehouses at Burimari and Tamabil land port stations via India. At present, Burimari is the nearest land port from Bhutan-India border, which is just over 70 kilometres from Burimari border. A senior commerce ministry official told bdnews24.com Bhutan has requested Bangladesh to open one more landport along Bangladesh-India border in Nakugaon in Sherpur. Bangladesh is yet to discuss Bhutan's request with India, he said.

SAARC workshop on government performance management Tuesday

Senior officials from SAARC countries will study and deliberate uponIndia's performance management system at a two-day workshop that starts Tuesday. The workshop, to be inaugurated by Cabinet Secretary K.M.Chandrashekhar, will be attended by senior officials of member countries of South Asian Association for Regional Cooperation (SAARC) --India, Afghanistan, Bangladesh, Bhutan, the Maldives, Nepal, Pakistan and SriLanka.'The deliberations over the next two days would help in capacitybuilding of senior government representatives for setting up a governmentperformance management system in the SAARC countries,' an officialpress release said. The idea of the workshop was mooted at the meeting ofthe cabinet secretaries of member countries of SAARC in November 2009, where there was 'considerable interest to India's swift implementation of asophisticated Performance Monitoring and Evaluation System forgovernment departments'.

Incorporating GNH into economyEconomic Development Policy

Much has been done to beef up the country’s economy, just as much has been said about the need to protect its environment that is underpinned bythe gross national happiness (GNH) philosophy.

Lyonchhoen Jigmi Y Thinley said the government would incorporate theGNH philosophy into the country’s economic policies to promote a ‘greenand sustainable economy’. “We’ll give incentives, tax relief and bonuses to economic activities,promoting a green and sustainable economy with value addition andminimum impact on environment and culture,” the prime minister said.

He said this was already incorporated in the government’s final economicdevelopment policy (EDP) document, which will be made public nextweek.

Anything leading to the depletion of resources with minimum benefit to thecountry, he said, would be discouraged. He explained that exploiting andexporting raw minerals, for instance, would not receive priority. He assuredthat, rather than terminating the existing industries, they would beencouraged to add value to their products.

“We’ll go for economic activities that ensure highest return, while alsoensuring the intergeneration equity in the sharing of natural resources,” theLyonchhoen said.

Sources said the FDI policy was delayed on the advice of the cabinet toincorporate the philosophy of GNH into the document.

Lyonchhoen said the government would encourage FDI in activities thatmade Bhutan a regional services hub in health and wellness, educationcentre, tourism, financial services, data centres and ICT.

He said Bhutan was promoting hydropower, both inside and outside thebilateral framework, and the pursuit of renewable energy sources.

An important component of GNH in economic development, he pointedout, was also the promotion of Bhutan as an organic farming country, which would immensely benefit farmers exporting their products abroad.

The prime minister admitted that, although some of his colleagues in thecabinet, like Lyonpo Khandu Wangchuk and Lyonpo Yeshey Zimbafavoured accession to WTO, he delayed the process.

He said they were still unclear to questions like how WTO could reconcilewith Bhutan’s pursuit of GNH, its impact on Bhutan’s economy and, unlikeEDP based on GNH, accession to WTO would mean indiscriminatelyopening up all barriers to external services and goods.

Bhutan could join WTO any time it wanted, but to withdraw would bedifficult and a traumatic process, he said.

On bridging the divide between the big economic policies, GNH and theeveryday needs of the people, Lyonchhoen said GNH was also about equitable development and empowerment through not just the ballot butalso economic and social empowerment.

He said to achieve that equity and empowerment, the government wasfocusing on providing essential services like roads, water, electricity, and telecommunications among others.

Lyonchhoen explained that to promote equitable development, thegovernment would provide incentives to businesses that opened in remoteareas or those other than established places like Thimphu andPhuentsholing.

He also said the country saw an influx of imported junk food, which mostdeveloped nations refused to accept because of their contents.

Products such as carbonated drinks and other juices, which were harmful topeople’s health and lead to environmental pollution, he said, would be taxed heavily.

“Some of the main elements of the economic policy will be creating anenvironment where the population grows as healthy, intelligent andeducated people, who will have the capacity to turn into meaningfulinstruments the power of the ballot,” the prime minister said.

Giving the international context, the prime minister said the present macroeconomic policies was leading to crises similar to the global financial crisis,pollution and great disparities in wealth. Therefore, he said, Bhutan would have to pursue a different path of GNH that could also be the world’ssaviour.

With all the economic activities and growth the country was experiencing,Bhutan, the prime minister said, would be an economically self-reliant country by 2020, no longer dependent on foreign grants.

Maldives

Somali pirates hijack Taiwan ship

Somali pirates attacked one Taiwanese fishing vessel, injuring oneIndonesian crew member, and took control of another, the Ministryof Foreign Affairs said yesterday.

The pirates chased the Jui Man Fa and fired shots at the vessel,hitting one man in the leg, late Wednesday evening, MOFA said.The ship escaped in the direction of the Maldives and the crewmember was out of danger, reports said.

However, the pirates succeeded in taking control of anotherTaiwanese ship, the Jih Chun Tsai 68, according to comments bythe captain of the Jui Man Fa to a Taiwanese radio station. Therewas no immediate information about the crew of the hijacked ship,which was registered in Tungkang, Pingtung County.

The attack against the Jui Man Fa happened about 395 nauticalmiles southeast of Cape Guardafui, when a relatively small shipdisguised as a Taiwanese vessel approached the ship, reports said.

When the crew of the Jui Man Fa became aware of the ploy, it leftthe area as quickly as possible, MOFA said. During the escape, thepirates fired 50 to 60 shots at the Taiwanese ship, hitting theIndonesian crew member.

The crew counted two Taiwanese citizens and 12 Indonesians, MOFA said.

After a three-hour chase, the Taiwanese ship's radar showed nopresence of another vessel within 12 nautical miles. In order toguarantee the crew's safety, the captain decided to set course for theMaldives more than 100 hours away, MOFA said.

The ministry said the injured crew member would receive medicalcare as soon as the Jui Man Fa reached the Maldives, an

independent island nation in the Indian Ocean south of India.

The international anti-piracy authorities had been alerted to the fate of the Taiwanese ship, MOFA said.

Yesterday's clash was not the first incident between Somali piratesand Taiwanese fishermen. The tuna long-liner Win Far 161 spent ten months in pirates' hands until returning home after the paymentof a ransom last February.

Freedom of expression not an excuse for 'crimes,' warns President

MALE, April 1 (Haveeru News Service) -- President Mohamed Nasheed has said that while the government respects freedom of expression andfreedom of assembly, it cannot be lenient on criminals taking unlawful advantage of those freedoms. Government would take legal action against anyone committing unlawfulactivity, even if the person is a MP or an extremist, President Nasheed said,in an address on Wednesday evening to mark the 77th anniversary of Maldives Police Service. President’s remarks come a week after three MPs of the opposition DhivehiRayyithunge Party (DRP) were taken into Police custody at a violentdemonstration, and amid concerns over portrayal of women in recent religious sermons. “So I urge them not to deem freedom of expression and democratic valuesas chances to violate laws, and to carry out their actions within legalboundaries and within the map of critical thinking,” he said. The President urged Police officers not to “forget about the citizen’s hardwork in establishing freedom of expression and freedom of assembly in theMaldives,” adding that the “people who tried to prevent such freedoms arenow attempting to cross the line and go beyond the map.” He was referring to the then ruling, now opposition DRP. “It is our responsibility to make sure that the freedom is not violated by themeasures we take to resolve the current difficulties. Rattling gates andclimbing walls has become medieval jokes for our children,” President added, a week after key DRP members rattled and climbed the gate at hisofficial residence. He warned that abuse of democratic freedoms, still infant in the Maldives,may spoil them for future generations. President Nasheed appealed government offices to deliver services speedily

when requested by Police, Customs and Immigration service. Commissioner of Police Ahmed Faseeh noted that the previous year was“remarkably successful” in Police work, adding that although organised crimes increased, the national crime rate declined on average, within a year.

Donors pledge over $300 million to help Maldives

COLOMBO: International donors have pledged 313 million dollars in aidto the Maldives to help its recovery from last year’s financial crisis, the president’s office said on Tuesday. The financial package aims to strengthen economic and public sectorreforms, good governance, social development and climate change in thenext three years, a statement said. Some 50 bilateral and multi-lateral donors participated in the two-day conference that ended on Monday, including the International Monetary Fund, the World Bank, the AsianDevelopment Bank, the European Union and the United States. The conference, held in the Maldivian capital Male, is a “strong vote of confidence” for the new government, President Mohamed Nasheed said inthe statement. Nasheed, who was elected under the first multi-party poll in 2008, is grappling with the consequences of the global economic crisis andits effect on the country’s tourism industry. The IMF last year approved athree-year 92.5 million dollar bailout package for the Maldives, an atollnation of 1,192 tiny coral islands which depends heavily on upmarkettourism. The low-lying Indian ocean state says it is also highly vulnerable to global warming as rising sea levels could wipe the islands off the face ofthe earth. Japan, the United States and the EU pledged aid for projects tomitigate the impact of climate change and the UN promised assistance for social development projects, the statement said. The IMF has forecast a 4.0-percent contraction in the nation’s economy in 2009 after an expansion of5.8 percent in 2008. The 2009 figures are yet to be released.

Govt approves plan to rent Tabuhan Island to Maldives investor

Minister of Marine Resources and Fisheries Fadel Muhammad hasapproved the Banyuwangi regental administration's plan to rent TabuhanIsland to Maldives investor PT Safari International Resort.

"A recommendation letter has been received by the Banyuwangi regent," head of the investment section of the administration's development planningagency Made Mahartha said as quoted by tempointeraktif.com onThursday.

The 5.33-hectare island, which is located at Bengkak village in Wongsorejo district, will be developed into a marine tourist site to be equipped withlodging facilities.

The island, which is at the Bali straits water, is now vacant. Its surroundingsis well-known for its beautiful coral reefs, Made said.

Made explained that according the proposal, PT Safari will rent the islandfor 30 years at a cost of Rp 100 billion.

Banyuwangi Regent Ratna Ani Lestari, he said, had set up a regionalcoordination team led by administration secretary Sukandi.

The team will be in charge of further deliberating the cooperation draft, which will cover, among others, obligations and responsibilities of the twosides, revenue sharing scheme and environmental insurance.

"This has been regulation in Government Regulation No. 50/2007 onregional cooperation implementation," Made said.

The plan to rent the island had earlier sparked pros and cons fromenvironmental activists, who demanded that the Banyuwangi administrationstrictly watch out the cooperation implementation, especially theenvironment preservation.

Inner Maldives Holidays is proud to announce it has been nominated at the World Travel Awards 2010 as Indian Ocean’s Leading Travel Agency. This is the fourth year in a row that the company has received a World Travel Awards nomination. Previous nominations include the “World's Leading Travel Agency” in 2007, 2008 and 2009. The company has won World Travel Awards for “Indian Ocean’s Leading Travel Agency” in 2007 and 2009. Inner Maldives Holidays was the very first travel agency in the Maldives to receive a World Travel Award and it is the only agency that has won the highly coveted award twice. The World Travel Awards (WTA) is the most comprehensive and prestigious awards ceremony in the global travel industry today. The Wall Street Journal has described the awards as “the Oscars of the travel industry”. The honorable recipients of a World Travel Award have undergone rigorous independent examination, proven their excellence and have raised industry standards. They enjoy the integrity and status of being labeled the best in business. Inner Maldives Holidays can include this World Travel Award 2010 nomination amongst its many impressive accolades. The company has been featured in New York Times as “one of the nation's biggest tour companies” (04/01/2005) and is also highly recommended by Lonely Planet - which is the bestselling guidebook and digital media publisher for travel in the world.

Inner Maldives Holidays blueprint for 2010 is to expand further into the region therefore offering markets beyond the Maldives. The company has already been selling outbound from Maldives into India, Sri Lanka, Thailand, Malaysia, Singapore, Indonesia, Seychelles, Mauritius, Dubai and even Europe. Inner Maldives Holidays concept of “The Maldives and beyond” is designed so that tourism in the Maldives will benefit from being sold as a twin center or multi-center holiday with a multitude of combinations: including products and services from Sri Lanka, India, Thailand, Malaysia and Singapore. The year 2010 will be one of expansion for Inner Maldives Holidays as it proactively seeks new markets in the Asian region. Inner Maldives Holidays would like to take this opportunity to thank its partners, colleagues, associates, stakeholders and dedicated employees for what has been another phenomenal year of performance and progress. Inner Maldives Holidays’ World Travel Award 2010 nomination is the result from 12 years of dedication, smiles and success

Maldives’ donor conference begins: Nearly 40 donors to help prop upMaldives’ economy

The Maldives’ donor conference kicked off today, with nearly 40 donorsnow poised to inject funds to the country’s economy, grappling a budgetcrisis.

The two day conference, bringing together a total of 40 countries andinternational agencies will be held at the Bandos Island Resort and Spa.

“Countries and international agencies that have confirmed attendancenumber 40 including the US, EU middles eastern and neighbouringcountries,” Press Secretary to the President’s office, Mohamed Zuhair toldthe Asian Tribune.

“About 80 delegates are already in town,” he said.

Zuhair said the conference is “very important for the economy as thegovernment is seeking donor assistance to alleviate the budget deficit.”

He said it will also “help Public Sector Investment programmes with short term goals of 3 years.”

However, he refused to predict on the amount of the donor funds thecountry will get.

“How much may be pledged by donors would be clear at the end of theconference Tuesday,” Zuhair added.

UAE grants 10 million dollar to Maldives

UAE has granted US 10 million dollars to support development in theMaldives during ''The Maldives Donor Conference 2010'' that concluded inMale'. H.E. Dr. Maytha Salem Al Shamsi, UAE Minister of State headed the UAEdelegation in the conference. The UAE delegation also included UAE Ambassador to Sri Lanka,Mahmood Mohamed Al Mahmood and Mohammed Seif Al Suweidi,Deputy Director General of Abu Dhabi Fund for Development (ADFD). On the occasion Al Shamsi extended greetings of UAE President His Highness Sheikh Khalifa bin Zayed Al Nahyan and Vice President andPrime Minister of UAE and Ruler of Dubai, His Highness SheikhMohammed bin Rashid Al Maktoum to participants. While addressing the conference she said that UAE's policy under the leadership of President His Highness Sheikh Khalifa bin Zayed Al Nahyansupports development process worldwide and UAE is a leading country inproviding help for the Maldives in areas of development, educational andhealth projects in the government as well as foundation level. Al Shamsi expressed her wishes for the conference to achieve the targetedgoals, affirming UAE's commitment towards the external charitable anddevelopmental aids for the needy countries.

Turkey's Tekfen plans to bid for Maldives airport

A Turkish airport construction and management corporation is eagerto take part in a project to upgrade an international airport in theMaldives, a company statement said.

A Turkish airport construction and management corporation is eager to take part in a project to upgrade an international airport in the Maldives, acompany statement said on Thursday. Turkey's Tepe-Akfen-Vie Airports Holding Corporation (TAV) has decidedto cooperate with Aeroports de Paris Management (ADPM) in a tender to upgrade the Male International Airport in the Maldives. TAV received specifications for the airport upgrade tender on January 25,2010. "Our company will cooperate with ADPM in the project," the statementalso said.

Established in 1997, as a joint venture between Tepe and Akfen Groups following their successful bid for the Istanbul Ataturk Airport InternationalTerminal Contract, TAV has undertaken the construction and operation ofthree major airports in Turkey (Istanbul Ataturk, Ankara Esenboga and Izmir Adnan Menderes Airports) and the Tbilisi and Batumi Airports inGeorgia, Enfida and Monastere Airports in Tunisia and with over 11,000employees TAV is realising projects at world class. TAV Airports Holding has 12 companies, it is operating in ground handling services, operation services, duty free shops, food and beverage services, ITand security services, which are complementary to airport operations. TAV Airports serve 285,000 flights by 300 airline companies every year,with 27 million passengers on average. With this capacity, TAV Airports isamong the leading airport operators in the world. In February 2007, it made 18.4 percent of its shares public. Aeroports de Paris builds, develops and manages airports including Paris-Charles de Gaulle, Paris-Orly and Paris-Le Bourget. Aeroports de Paris is Europe's second-largest airport services group in terms of airport revenuesand the European leader for cargo and mail. In 2008, Aeroports de Paris Group had revenues of ?2,527 million, and the company handled 87.1 million passengers.

WWF's Earth Hour 2010 continues to roll out from east to west acrossthe globe

About 90 cities and towns in Kazakhstan joined the global Earth Hourcampaign by switching off their lights for an hour. In the capital of Astana, some landmark buildings, such as the Astana-Baiterek Monument, the Presidential Palace, the Supreme Court building and the IndependencePalace, will turned off the lights between 20:30 and 21:30 local time. InAlmaty, the largest city of Kazakhstan, the city hall building, the television tower and many other buildings will also join the action. Major cities inKazakhstan participating in Earth Hour include Uralskaya, Atyrau, Aktau,Aktobe, Petropavlovsk, Aksu, Chaimey, Karaganda, Shymkent, and Taraz. Kulna, BangladeshThe Bengal Tiger was the official Earth Hour ambassador of Banglash aslights in Bangladesh city, Kulna were turned out. Kathmandu, NepalIn a region where electricity is not a constant power source – instead of being able to turn lights out, the citizens of Nepal instead held a candle litvigil at the UNESCO world heritage site in Kathmandu, Boudannath Stupa

led by WWF Nepal. Colombo, Sri LankaIn an event organized by the Environment Ministry, the EnvironmentMinistry building and all surrounding government buildings turned theirlights out. Sri Lankan VIPs lit an oil lamp which was passed along todelegates like an Olympic torch while crowds were entertained bytraditional dancers. Delhi, IndiaChief Minister of Delhi turned off the lights at iconic India Gate. Around the country, landmarks such as the Red Fort, Humanyun’s Tomb and QutubMinar all descended into darkness, while 27 cities and towns saw citizensrecognize Earth Hour. Leading Bollywood actor, Abhishek Bachchan – an Earth Hour ambassador – said, “As responsible citizens of this planet, it is extremely crucial for usto address the colossal problem of climate change through ensuringresponsible action and adopting a sustainable way of life. Earth Hour is onesuch platform and a people’s campaign that goes beyond national, regional,economic and cultural differences.” Karachi, PakistanThe President and Prime Minister switched off the lights in their homesjoining citizens in Islamabad, Karachi and Lahore. In this – their first year of being involved – President Asif Ali Zardari said, “Conservation ofnatural resources and essential commodities is critical to creating asustainable environment.” Male, MaldivesSupported by President Mohamed Nasheed, the Maldives observed a walking tour as part of the program to mark Earth Horu 2010. Not only didTelevision Maldives (TVM) not go to air for the hour of 20.30 to 21.30 butlocal hotels including the Shangri-La Villingili Resort and Spa and the Four Seasons observed Earth Hour.

NEPAL

Madhav Kumar refuses to resign as Nepal PM Kathmandu, Apr 2 (ANI): Prime Minister Madhav Kumar Nepal on Fridaysaid he would not submit his resignation at any cost. Addressing a newly elected office bearers of the Reporters Club at Baluwatar this morning, Nepal said he has support from the majority of the Parliament members,adding no new government is in sight before the Constitution ispromulgated.

He also charged that the main opposition UCPN (Maoist) has beenspreading rumors about his resignation and trying to create confusion among the general public. He also accused the Maoists of not being serious over his planning tointegrate Maoist combatants within 30 days. Saying that Maoist combatants will be integrated as per the Comprehensive Peace Accord, Nepal said the recent proposal of Maoists' GoldenHandshake' was not possible. On Thursday, during a meeting with leaders of the four left-wing fringe parties, Nepal said, he would not an obstacle if an understanding is reachedto take the peace process to a logical conclusion and to promulgate theConstitution on May 28. The present deadlock persists due to lack of a consensus on an ideologicalbasis and that he would give way if such understanding requires him to doso, he said. He further said that forming another government by gaining majority voteswould not be the solution,

India, US hand in Nepal palace carnage, says ex-minister

KATHMANDU: Nine years after the massacre of Nepal’s royal family inthe tightly guarded palace, the national tragedy continues to haunt the nascent Himalayan republic with a veteran politician and former ministernow alleging it was jointly orchestrated by India and the US. Chakra Prasad Bastola, who was Nepal’s foreign minister in 2001 whenKing Birendra and nine more members of his family died in a violentshooting during a family dinner, has resurrected the conspiracy theories thatbegan floating since then, saying it was his gut feeling that the two foreigngovernments were involved. Bastola, who is also former Nepali ambassador to India and was close toformer prime minister Girija Prasad Koirala who passed away last month,has voiced his suspicions in the Nagarik daily, in a special supplementpublished by the Nepali paper to commemorate Koirala. "I feel (the palace massacre) was jointly planned by India and the US," theNepali politician wrote. "The reason is that nothing can happen in Nepalwithout Indian involvement. The US is a giant world power, nothinghappens without its knowledge. So (I think) both were involved."

Bastola, who helped Koirala hijack an aircraft from Nepal to India during apro-democracy movement, also said the two foreign governments hadmanipulated Birendra’s brother Gyanendra, who succeeded him. The reasonwas to destroy all patriotic and democratic forces in Nepal, the formerenvoy said. While Birendra had "some vestiges of nationalism", Bastola alleged that theconspirators also planned to kill Koirala, who was prime minister at thattime. Koirala too was invited to the ill-fated dinner but the invitation was rescinded when the king insisted that it remain a family affair. Bastola alsoalleged that when Koirala went to attend the funeral procession of the royalfamily, his car was fired at. Though a high-level investigating committee reported that the killings wereperpetrated by the then crown prince Dipendra, who in a daze of alcoholand drugs turned the gun on himself at the end, few in Nepal believe that.The Maoist government that came to power in 2008 promised to hold a fresh investigation but did not keep its word. Besides India’s Research and Analysis Wing and the American CIA, therehave been allegations against Gyanendra as well. When an anti-monarchy movement forced him to surrender his crown in 2008, the deposed king held an unprecedented press conference in the palace, calling the allegationheartless calumny.

Nepal halts issuance of passport affecting foreign job seekers Kathmandu: Nepal government has stopped issuing new passports afterfailing to issue Machine Readable Passport within the deadline set byInternational Civil Aviation Authority (ICAO), according to an official atthe District Administration Office. The government has stopped issuing hand-written passports from yesterday, a decision that would affect thousands of Nepalese people from goingabroad in search of foreign jobs. Nepal Government has recently signed an agreement with security press ofIndia to print the Machine Readable Passport. However, it will take at least ten weeks to supply the MRPs to thegovernment of Nepal. The Indian government owned press has agreed tosupply the passport at the cost of USD 4 per copy.

The move to stop issuing hand-written passport will not only affect the

thousands of people who were desirous to go abroad for jobs but also adversely impact the remittances for the country. Remittance sent by labourers working abroad comprise a major portion of foreign exchange earning for Nepal. Flow of remittances to Nepal has already decreased in recent times due to the global recession. Now the situation will further worsen, warn observers.

NA begins recruitment

Nepal Army has begun a recruitment process to fill up 500 vacant technical positions, Kantipur daily reported.

NA begun the recruitment process as per the instructions from defense minister Bidhya Bhandari.

I had given NA the permission to begin the recruitment process to fill up vacant technical positions before I went to China, said Bhandari at her office in Singha Durbar on Thursday. Recruitments will continue to fill up all vacant positions, she added.

Minister Bhandari had visited China from 22 to 29 March.

National Human right commission sees Nepal army’s mistake at Bardia firing 1st Apr : Kathmandu, Nepal – National Human Rights Commission (NHRC) has said on Thursday that Nepal Army had used excessive force which had caused of murdering of two women and a 12-year old girl inside Badriya National Park four weeks ago.

Revealing its report the NHRC has also blamed the Nepal Army that it had produced fake reports that the victims. In the firing Devisara B.K, Amrita B.K and Chandra Kala B.K - were killed

Nepal Maoists demand Rs. 2 mln for each militia joining politics The Unified Maoists’ Party forwarding an interesting proposal to the Maoists’ Militia Integration and Management Technical Committee has said that the government should earmark Nrs. 2 Million and allocate 2-4 hectares(approximately) of lands to those UNMIN verified militias who would prefer to join politics. “The Militias who have played significant role in the political transformation cannot be told to quit empty handed”, Chandra Prakash Khanal ‘Baldev’ of the Unified Maoists’ Party told reporters, writes Kantipur dated April 2, 2010. Baldev is a member of the Committee. Reports also claim that if all Militias prefer to join politics as per the Maoists’ fresh stand the government needs to manage Nrs. 40 Billion rupees. No decision could be taken in the daylong meeting due to the Maoists’ new proposal, reports conclude. The technical committee is also represented by Kul Prasad K.C (Maoist), Balananda Sharma and Shambhu Ram Simkhada from Nepali Congress, Gopal Singh Bohora and Dipak Bhatta from UML and Sadananada Kurmi and Ramananda Mishra from two different Madhesi Janaadhikar Forum.

Maoists must disband its armed wing: Nepali leader

Ram Chandra Poudel, leader of the parliamentary party of the NepaliCongress (NC), Sunday said that his party would support the Maoist bid to return to power 'if they gave up violence and disbanded the Maoist army'.

Poudel told the visiting Indian media: 'If the Maoists try to move a no-confidence motion against the government and manage to prove theirmajority, then my party would support them if they gave up violence, disbanded the Maoist army and enable them to join the social mainstream.'

He said the overt political ambition of the Maoists has been their undoing.'They had to quit the seat of power because of the haste with which they acted. They have to win back the confidence of the people.'

Poudel said the Maoists had to 'remove suspicion from the minds of thepeople that it was not acting in their interest'.

'It has to return the land and homes of the people that it had taken over from the people during the days of armed struggle and instill confidence inpeople that it will pursue politics of peace. Nepal cannot maintain a parallelMaoist army and the civil war like situation has to end,' he said.

Poudel's statement came a day after a meeting between the ruling NepaliCongress and the main opposition Unified Communist Party of Nepal(Maoist) ended on a positive note with both the sides agreeing onnominating a coordinator of the High-Level Political Mechanism through consensus and settling its agenda for timely promulgation of the newConstitution.

At the end of the meeting here at the Hotel Shangri-la, leaders of both the sides said they were moving towards a positive direction on the role of thehigh level mechanism on peace and the Constitution drafting process.

'The deadline to draft the Constitution is May 28, but I am not concernedwhether the deadline can be met. What matters most is that the newConstitution has to be a democratic one,' Poudel said.

He said 'his party was in the process of constituting a core executivecommittee of nearly 75 members for better governance.'

'The void created by the death of Girija Prasad Koirala cannot be replaced.There are some instances like this in history, where one has no option but to live with a tragedy. Koirala's death was one of them. The coordinationcommittee will carry on his legacy.'

'Majority of the members in the committee will be elected, while 20 will be

nominated after being ratified by the elected members. There will be no arbitrary selection.'

Koirala wanted Nepal government to resign: Bhattarai

Kathmandu: Stepping up pressure on the CPN-UML led coalition to quit so as to save the faltering peace process, Maoists top leader Baburam Bhattarai today claimed that late Nepali Congress president wanted the present government to resign. Baburam Bhattarai, the UCPN-Maoist vice chairman, claimed that former prime minister G P Koirala had mentioned in the High-Level Political Mechanism meetings that the CPN-UML government should step down. He told mediapersons in the tourist town of Pokhara that CPN-UML chairman Jhalanath Khanal was a witness to the statement in the HLPM meetings

"Girija Prasad Koirala used to say in the high-level mechanism meetings that the government should step down and UML leader J N Khanal is witness to it," Bhattarai said. Speaking at a press conference in Pokhara, Bhattarai warned that the country will plunged into a major political crisis if the current coalition continues in office. He underlined that the ruling coalition must be replaced by a new government led by Maoists to tide over the current political imbroglio. "It is mandatory to move ahead for the accomplishment of peace and a new constitution through broader political consensus," he underlined. "In this regard, the formation of a new national unity government headed by the Maoists is imperative," he said. Maoists plan to hold a massive rally in the capital next month to destabilise the CPN-UML-led 22-party coalition as the former rebels sought the leadership of a top panel tasked to supervise the stalled peace process?

Prachanda, the chairman of the main Opposition Unified CPN-Maoist, will address the grand

rally in Kathmandu on April 6 to step up pressure on the government to quit. The former rebels accused the coalition of being the main obstacle in drafting the new constitution by May 28, the stipulated time for the process. The political leaders are struggling to meet a May 28 deadline to finish the drafting of a new constitution as stipulated by the peace process that brought the decade-long civil war to an end in 2006. Disagreements persist on such fundamental issues as the structure of the national government

and the creation of federal states. Analysts fear that the death of Koirala, who was instrumental in bringing the Maoists to mainstream politics after a decade-long insurgency in 2006, could derail the faltering peace process. Koirala, who died on March 20 aged 85, spent the final months of his life engaged in a desperate effort to put the stalled peace process back on track in the country

GP Koirala strived for Nepal constitution even in last days: Sujata

Kathmandu: In his last days, former Nepalese prime minister Girija Prasad Koirala was striving hard to bring about a consensus on the country's new Constitution, which has been delayed due to political rifts.

"A day before he died, the ailing Koirala had told prime minister Madhav Kumar Nepal to bring everybody together and finalise the constitution," his daughter Sujata Koirala, the country's deputy prime minister said.

Her comments come in the backdrop of President Ram Baran Yadav's remarks that the new Constitution may not be drafted within the stipulated time frame of May 28.

In an interview at her residence where she is mourning her father's death, Sujata appealed to all political parties, including the Maoists, to forge cooperation.

"We have to work together and build consensus to fulfill his dream," she said.

"A big vacuum has been created due to the demise of my father Girija Babu, and we should fill it through cooperation, consensus and collaboration," she said.

Sujata said three days before his demise, Koirala had told Maoist chief Prachanda and senior leader Baburam Bhattarai to behave like a "responsible political party" and to forge cooperation in order to complete the peace process.

"He had also told Prachanda not to make unreasonable remarks that create problems and to cooperate with other political parties to write the constitution," she said.

"My father is no more with us, but I feel that he rests in the heart of every Nepali... He didn't know how popular he was, there was a human sea to pay tribute to him," she said recalling that thousands of people had turned up to pay their last respects on his funeral procession.

Sujata said in the absence of the patriarch-like figure, the political parties in the country will have to behave responsibly.

"Now Girija Babu is not there, as he used to take all blames like a guardian whenever some one commits mistake, but now everybody should be responsible if things go wrong, she pointed out," she said.

She particularly asked the Maoists to behave like a "responsible political party" to resolve the political crisis.

"We all would suffer, including the Maoists, if the constitution is not written within the stipulated time frame," she said.

The deputy premier also sought help from India in generating employment, fighting poverty, in health, education, and rebuilding infrastructure.

She also advocated a federal structure for the country "that would unite the country, not the one that divides".

India constructs school and health centre in Nepal

Kathmandu, Apr 1 (PTI) India has provided an assistance of Rs 11.1 million for constructing a new school building and another Rs 2.19 million for a primary health centre in Syangja in western Nepal. Rakesh Sood, Indian Ambassador to Nepal inaugurated the building of Galyang Multiple Campus and the health centre on Wednesday, that will provide class room to over 450 students of which about half are girls. He also laid the foundation stone for a new school building. The Graho Ghyaling Primary Health Centre built at the cost of Rs 2.19 million will enhance the quality and coverage of medical care. The health centre will also provide 24-hour emergency, maternity and general medical services. India has also pledged to provide Rs 20.

Sitaula casts doubts on timely statute

POKHARA: Nepali Congress leader and former home minister Krishna Prasad Sitaula on Friday said that the constitution could not be promulgated in the stipulated deadline if the wrangling between parties continues. Talking to media persons in the office of Kaski chapter of Nepali Congress, Sitaula said, “There is a grim possibility of promulgating the statute on time as the parties are not serious to solve the contentious issue in the context that the government and the Unified CPN Maoist are in constant tussle.” Stating that the agreement reached in the meeting of High Level Political Mechanism to form the State Restructuring Commission (SRC) had given rise to little hope for the timely promulgation of the constitution, Sitaula stressed the need for the early formation of the SRC for the timely execution of the new statute to materialise. He further said that promulgation of the statute is impossible prior to the integration and rehabilitation of PLA fighters.

When asked about new recruitment of personnel by the Nepali Army, Sitaula said that it would not be against the Comprehensive Peace Accord (CPA) to fulfill the already vacant posts of army personnel by the NA. Stating that the misinterpretation of the CPA by the Unified CPN-Maoist complicated PLA integration, he blamed the Maoists for being involved in the dubious game of toppling the government. Saying the qualified PLA fighters could join the NA by fulfilling the recruitment standard of the NA, the former home minister said that PLA fighters could be integrated in other security agencies as mentioned in the CPA. He also said that the United Nations Mission in Nepal could not play a fair role in the peace process. Claiming that there is no alternative leader to replace the late GPK in the party, Sitaula said, the three senior leaders acting president Sushil Koirala, Sher Bahadur Deuba and Ram Chandra Poudel have to take the party ahead as per the consent of party cadres until the 12th convention of the party.

Threat of Return to Hindu State in Nepal Looms

KATHMANDU, Nepal (Compass Direct News) – Four years after Nepal became officially secular, fear is growing that the country could revert to the Hindu state it was till 2006, when proclaiming Christ was a punishable offense and many churches functioned clandestinely to avoid being shut down.

Concerns were heightened after Nepal’s deposed King Gyanendra Shah, once regarded as a Hindu god, broke the silence he has observed since Nepal abolished monarchy in 2008. During his visit to a Hindu festival this month, the former king said that monarchy was not dead and could make a comeback if people so desired.

Soon after that, Krishna Prasad Bhattarai, a former prime minister and respected leader of the largest ruling party, said that instead of getting a new constitution, Nepal should revive an earlier one. The 1990 constitution declared Nepal a Hindu kingdom with a constitutional monarch.

There is now growing doubt that the ruling parties will not be able to fashion the new constitution they promised by May.

“We feel betrayed,” said Dr. K.B. Rokaya, general secretary of the National Council of Churches of Nepal. “The Constituent Assembly we elected to give us a new constitution that would strengthen democracy and secularism has frittered away the time and opportunity given to it.”

The clamor for a Hindu state has been growing as the May 28 deadline for the new constitution draws near. When a Hindu preacher, Kalidas Dahal, held a nine-day prayer ritual in Kathmandu this month seeking reinstatement of Hinduism as the state religion, thousands of people flocked to him. The throng included three former prime ministers and top leaders of the ruling parties.

“The large turnout signals that Hinduism is enshrined in the hearts of the people and can’t be abolished by the government,” said Hridayesh Tripathi, a former minister and Constituent Assembly member whose Terai Madhes Loktantrik Party is the fifth-largest in the ruling alliance. “It was a mistake to abolish Hinduism in a hurry.”

Another blow for a Hindu state was struck by the Rastriya Prajatantra Party-Nepal (RPP-N), the only party that fought the 2008 election in support of monarchy and a Hindu state. It is now calling for a referendum. As a pressure tactic, it paralyzed the capital and its two neighboring cities in February by calling a general strike.

“The election gave the Constituent Assembly the mandate of writing a new constitution, not deciding issues of national importance,” said Kamal Thapa, the RPP-N chief who also was home minister during the brief government headed by Gyanendra. “Most people in Nepal want a Hindu state and a constitutional king. If their demand is not heeded, they will feel excluded and refuse to follow the new constitution. We are asking the government to hold a referendum on the two issues before May 28.”

With only two months left, it is clear the demand can’t be met if the constitution is to come into effect within the stipulated time. Now the specter of anarchy and violence hangs over Nepal.

Nepal’s Maoists, who fought a 10-year war to make Nepal a secular republic and who remain the former king’s most bitter enemy, say attempts have begun to whip up riots in the name of a Hindu state. The former guerrillas also allege that the campaign for the restoration of Hinduism as the state religion is backed by ministers, politicians from the ruling parties and militant religious groups from India.

Nepal's forests: Selling carbon credits

Nepal, like any other developing country, now could sell carbon credits in the global market by way of reducing its contemporary deforestation and degradation rates and by way of forest conservation and enhancement. It sounds too good to be true? No, surely not. The world has now conceptually moved pretty ahead in terms of rewarding the developing countries for carbons with those origins. Thanks to the inherent character of the forests which is both the source and sink of carbon dioxide—the major culprit of climate change. Thanks also to the global UNFCCC initiative which has prepared to take a great leap from its original Kyoto position (1997) that had limited its reward domain to the carbon generated from new plantations. Both the UNFCCC sponsored specialized group (AWG-LCA) and the much controversial Copenhagen have ratified the concept. It can thus be predicted that the forthcoming convention of parties (COP15) scheduled in Cancun in November 2010 would approve the case. The said international provision may open several windows of opportunity for Nepal. First, the country can benefit from checking or retarding its deforestation trend which currently stands at 1.7 per cent annually. Alongside it might benefit from checking the forest degradation whose rate, though not yet known, is believed to be even higher. The second range of benefits might come from community forests which is found to sequestrate 1.8 ton per ha/ year. Likewise, increasing the forest carbon through new plantations might have some scope all over the country.

The composite term for all these regime types is called REDD. The seemingly attractive opportunities are characterized by a host of challenges at all stages ranging from production of carbon stock to its measurements and ultimately in making claims. Challenges in production are not easy to deal particularly in the Terai. This owes mainly to the large opportunity cost of carbon compared to other land uses including agriculture. The fluid political situations combined with lack of employment opportunity also pose unprecedented pressure to the forestland. Hills as the situation stands today, may be more promising areas for carbon trade at least in relative sense. Challenges in measurement, the essential prerequisite towards making ultimate financial claims, may be difficult in all regions of the country, but is more acute in the higher altitudes owing to its access difficulties and the entailed higher costs. Monitoring degradation is much more difficult both due to lack of baseline data and the paucity of affordable measurement technique. Selling the hard earned carbon credits, the ultimate thing in the REDD business, may be even trickier than the preceding actions. The credit buyers would favor more extensive, cheaper and predictable carbon than the small, costly and less predictable ones. Though Nepal’s community forestry has proven itself for a successful case of carbon sequestration, their small and dispersed location and lack of predictability may deter aspiring buyers. Those may instead be attracted to countries with extensive and contiguous tropical forests like Brazil and Indonesia owing to host of reasons including economy of scale, compliance ease and better visibility. It is thus obvious that Nepal has to take necessary measures all way from carbon production through measurement leading ultimately to the sale if it has to take any benefit from the global provision. For efficient production, the first thing to address involves bigger challenge of addressing the poverty which is so rampant in the country. Government’s unilateral efforts to conserving the forest will be a futile exercise as shown amply by history. Devising an appropriate tenurial regime and better forest governance and inclusive mechanism that insures justice between all tiers of stakeholders ranging from local to national and from proximity to distance are needed. The mindset and the capacity of the Department of Forest Resource and Survey must be addressed in a way that all types of measurement, reporting and verification (MRV) may be done domestically without having to rely too much on the expensive expatriate service. The task of seeking potential buyers can be even more daunting. Given the smallness of potential size of carbon credits, the buyers may not be too stimulated to buy carbon from Nepal. Weaker governance and vacillating forest policy may further add up to the problem. However, there is little reason to despair. Nepal’s forests do not simply produce carbon but produce a number of important co-benefits ranging from conservation of biodiversity, protection of watersheds, and supporting people’s livelihoods. In this light we may have little problem in selling our carbon provided that we can convince the world with these hard realities. It may be hoped that the ongoing REDD strategy development process will pay proper attention over these areas so that a just and effective carbon trading can become a reality for Nepal.

War not yet over: Bhattarai

KATHMANDU: Referring to recent statements against federalism and secularism from various quarters of the society, Vice-chairman of the Unified CPN-Maoist Dr Baburam Bhattarai today said that people's war was not yet over and his party could continue the war until it achieves its goal. "People are still unaware that our party had not denounced violence even after signing of 12-point agreement with the seven parties,” said Dr Bhattarai while addressing a book launching ceremony of "The Final Days of the People's War" penned by senior journalist Manarishi Dhital. “We had decided to develop People's Liberation Army (PLA) to seven divisions during the Chunbang meeting with an intention to lead both the peaceful and the armed movement together so as to achieve our goal.” Parliamentarian parties have been focusing on dismissing the PLAs who had fought for the republican set up but never talk about democratising the Nepali Army, he said. Dr Bhattarai added, “Recent comments against federalism and secularism from different people indicates that the incidents described in the book could be semi-final days instead of the final days,” he commented. "This book, however, indicates how powerful the army equipped with ideology could become." He said the book was reportage of representative events of the people's war. "Dhital has tried to reveal some of the facets of the war,” he said adding, “I wish that those days be the final days, though.” The specialty of the Nepali people's movement was an appropriate blend of armed and peaceful struggle. He also claimed that late Girija Prasad Koirala had the best knowledge of power and the meaning of violence and he used to urge the Maoists to attack the royal regime. Meanwhile, UCPN-M politburo member Janardan Sharma 'Prabhakar' said the book was only a chapter of his 'unwritten book'. He also praised the role of media in promoting the cause of the Maoists in establishing the truth. He also wished that the title of the book 'the final days' be worthwhile. He, however, claimed that he has doubt over the title because he has seen conspiracy being hatched against aspiration of the people so war could be a necessity again. He also revealed that the then king Gyanendra had led the command from Pokhara during the people's movement when the Maoists were on Gandak Campaign to topple the royal regime. He also said he had read out a message from late Nepali Congress President Girija Prasad Koirala following attack Palpa. Likewise, journalist Ananda Sworup Verma from India claimed that facts of people's war were presented in distorted forms and many of the significant developments were ignored by media assuming that it would benefit the rebellions.

Britain Commits US$1.5 Million Aid For Elections In Nepal

KATHMANDU, March 30 (Bernama) -- British Department of International Development (DFID) funded Nepal with 961,822 Euro (some US$1.5 million) for procuring voter registration equipment. The assistance is provided to the Election Commission in Nepal to facilitate post-constitution general elections in Nepal, reports China's Xinhua news agency on Tuesday. Issuing a press release on Tuesday, DFID Nepal Head of Office Sarah Sanyahumbhi said "I am pleased to make the announcement of nearly a million pounds to acquire voter registration equipment to support Nepal's Election Commission." The Election Commission's voter registration plan will be helped by procuring 1,000 registration kits to support two phases of voter registration. Registration will be held in 16 Himalayan districts by the first week of May 2010 and other 55 Municipalities by July 2010. "We hope the support will ensure inclusive and legitimate election results which will be vital to Nepal's stability," Sanyahumbhi said. NRB introduces refinancing for productive sectors

The mid-term review of Monetary Policy has introduced a new refinancing tool to pump in enough liquidity in the banking system to finance productive sectors. The new policy has been announced as a measure for ´directed financing´ for the first time in Nepal, said a high ranking official of Nepal Rastra Bank (NRB). Going by the new policy that the NRB board meeting endorsed on Thursday, it would extend refinance loans up to Rs 25 billion to the financial institutions against collateral of good loans that they own. NRB categorizes good loans as those that are servicing interests and principals or defaulted by period of less than three months. “The extent of the loans can be extended if such refinancing produced good results,” the official told myrepublica.com. For now, the central bank will pledge refinance loans up to 80 percent of the good loans. Also, the volume of such loan would not exceed 40 percent of the core capital of the financial institution. The official stressed that the central bank has made every possible effort to ensure that the additional liquidity injected into the market through this new instrument is not used in investing on unproductive sectors like real estate and housing. "We have broadly identified four sectors -- export, tourism, hydropower, agriculture, small and medium enterprises (SMEs) and manufacturing -- as most productive sectors. The new refinancing tools will focus on these sectors only," said the official. He further stated that the board meeting also decided to charge 7.5 percent interest on such refinancing and set a condition. However, the policy has also set a number of conditions like the non-performing assets and

capital adequacy ratio of the financial institutions interested in getting refinance through the new tool should be less than 5 percent and 10.5 percent respectively. Such refinancing will be extended for a period up to six months, but the financial institution can renew it by pledging new collaterals of good loans. “This time we have taken into account that the loan extendable period of six months was the major reason behind the poor performance of refinancing for export sector,” said the official. The new measures have been introduced because the long-running liquidity crunch has started affecting investments in the industrial and infrastructure sectors that not only generate huge employments and help substitute imports, but also lay basic infrastructures for the development of the country, said the official.

Nepal Faces Food Crisis: WFP

KATHMANDU, March 29 (Bernama) --- "Food crisis is the result of various other crises in Nepal", said Country Director of United Nation World Food Programme (WFP) Richard F. Ragan in an exclusive interview with China's Xinhua news agency on Monday. "Here, we have a collision of crisis in Nepal such as natural disaster including drought and deluge, increase in the population, dependence on rainfall for agriculture," Ragan said. He added that the low agriculture productions, global economic crisis, high rate of poverty among others are the major problems that collide leading to a severe food crisis. Ragan said that different parts of the country are facing a major food crisis, including hill or southern Terai regions, and other two regions in the country - mid-western and far-western - have met with the worst food crisis situation. In the present context, the country is likely to face food scarcity due to the late start of Monsoon and unpredictable rainfall. The Ministry of Agriculture and Cooperatives (MoAC) has estimated that this year's national paddy and maize harvests have decreased by 11 and 4 percent respectively compare with last year. Last year was a record summer crop with national production of paddy at 4.5 million tonnes. However, due to a winter drought the total annual cereal balance was 132,916 tonnes deficit in 2008/2009. In August 2009, MoAc estimated that this fiscal year ending in mid-July, an edible cereal deficit will be at least 400,000 tonnes compared to the total requirement of 5.4 million tonnes. Ragan said that people in the country spend three quarter of what they earn for food increasing the high risk of food insecurity.

Moreover lack of food ruins health and people do not go for medical treatment because they cannot afford, plus they migrate for labor to different countries, Ragan said. Ragan also added that 50 percent of children born in the crisis are the victim of chronic malnutrition, which makes them physically and mentally deficient. "Our goal is to create means and opportunity to end the cycle of hunger," said Ragan, adding we use food as an entry point to attack problems around the household in Nepal. Ragan informed about the WFP's project "Food for Work" where they are work as per the need of the community. The project includes build irrigation, bringing asset as per the need, develop the cash crop and build a market to access them. Replying a query on how supportive is the Nepal government, Ragan said that the government has becoming more serious towards the issue and has begun to act more seriously. "It is rare that any government provides money to any UN agency. Last year, the government had provided US$16 million and this year the amount is expected to be twice of the last year," added Ragan. The interest of the donor agency has increased and with the increased government interest to tackle the rising long term issues, with the hopes to bring an end the food crisis in the country.

World Bank, Poverty, Aid, NGOs, and Development Paradox in Nepal

If we turn over the pages of any development books related to Nepal and other developing nations of the region, we are continually confronted by the issues of "poverty," "poverty traps," "incidence of poverty," "poverty line" and what not. Many people in fact use these words as synonyms while most rely on the standards provided by the World Bank or the United Nations organizations. For example, a World Bank poverty study that is often quoted provides the following statement: " Nepal is among the poorest and least developed countries in the world with almost one-third of its population living below the poverty line." But this statement in itself is a paradox because it hardly reflects the situation in Nepal . In 2002, a report titled "How Not to Count the Poor" was published by two U.S. academics, Sanjay Reddy and Thomas Pogge. They contended that the World Bank figures on how many poor people there are in the world were "misleading and inaccurate," "neither meaningful nor reliable" and extrapolated "incorrectly from limited data" (1). Considering this, one can refute the World Bank's report on various grounds but one cannot ignore it totally, though the World Bank's effort to end poverty has always been mythical. Furthermore, we are compelled to ask, what does poverty really mean? The history of the past

decade or so makes it difficult to be optimistic that there will be swift resolution of the poverty problems in the developing world. Before moving further, there is a "mystery," experts say that we must explain: the number of people living in poverty is growing at a faster rate than the world's population. Corporate investments and foreign aid and international loans to poor countries have increased dramatically throughout the world over the last half century, but so has poverty. Why? There are various relevant answers but the closest and the simplest answer may be this: paradoxically, the developing world now spends $13 on debt repayment for every $1 it receives in grants (2). And moreover, throughout the Third World , real wages have declined, and national debts are rising. This makes the matter very complex for developing countries such as Nepal . Those Nepalese who are not affected by International Aid too are subjected to pay the national debt. This is very unfair. But they have no magic potion. Nepal is poor. And the poorer the country the more likely it is that debt repayments are being extracted directly from people that neither contracted the loans nor received any of the money (3). Furthermore, rising debt means less export earnings -- which create further penury as it leaves the debtor country with lesser option to meet the demands of its population. Hence, a critical question is what action in the industrial countries may mean for the rest of the developing world. Nearly a billion people entered the 21st century unable to read a book or sign their names (4). But the industrialized world, though they preach about the problems faced by the developing world, did nothing concrete at all to change the direction of the developing world. But at the same time, it is unwise to blame the industrialized world alone for the problems faced by the developing world. For instance, less than 1 percent of what the world spent every year on weapons was needed to put every child into school by the year 2000 and yet it didn't happen (5). The developing nations' large percentage of the economy is eaten by war and internal strife, and this shows it is not often wise to blame the developed nations for their homemade cause. Considering all the above facts, to be precise, what are the prospects, if any, for high economic growth as well as rapid poverty alleviation in developing countries such as Nepal ? Is poverty alleviation an impossible task, as it might appear to be, based on the result of past efforts? The answer to these questions is no, in view of the remarkable results obtained by some of the poverty focused programs launched in the country. At the moment, such successful cases appear to be few and localized. Nevertheless, given the quality and quantity of their results, it is becoming increasingly evident that Nepal does offer great opportunities for rapid economic growth and poverty reduction. It has unlimited natural resources and potential; for example, quartz, water, timber, hydropower, scenic beauty, small deposits of lignite, copper, cobalt and iron ore. Moreover, Nepal has considerable scope for exploiting its potential in hydropower and tourism.

But Nepal , despite being a country rich in hydropower resources, has unfortunately been unable to utilize this asset to its advantage. Although with an estimated total viable potential of 44,000 megawatts, less than 500 megawatts are being generated. This resembles the pathetic state of the nation. The cake is right there in front of them, ready to be eaten, but they simply aren't eating it. Nepal is yet to learn from Bhutan , Canada , Norway and Laos , which are now thriving because of electricity. But sadly, Nepal has been unable to tap its most ardent natural resources. Both its resources and its potential are underutilized -- probably because of its technological backwardness, its remoteness, its civil strife and its vulnerability to natural disaster. But for how long can Nepal remain like this? Meanwhile, there is one sector in Nepal that has aided its development. Take for instance, the role of non - governmental organizations (NGOs) in alleviating poverty to some extent. In recent years, though they are often accused of farming dollars to meet their own needs, a number of NGOs have been engaged in different aspects of social, economic and human development in Nepal . The impact of their involvement so far seems significant in terms both of coverage of the poor and contribution to poverty reduction. In particular, the role of NGOs in the promotion of high-value agriculture production and micro-enterprise activities, and in the development of local skills and institutions within the framework of co-operatives to sustain these activities, has proved to be effective and sustainable. On the contrary, the experience of NGOs in promoting rural income generation on the one hand, and the generally poor results obtained by government-run poverty alleviation programs in the past on the other hand, have raised a number of issues. What went wrong in the most of the national poverty alleviation programs in the past, most observers are asking. Why is the success rate so different between programs run by the government and by NGOs? Is it the scale or the focus of activities that caused this difference? What are the missing links, if any, in those programs? All these questions are worth pondering. Although the NGOs' success cases are yet localized and perhaps too few to make a national-level impact, they do bring to light ways for pursuing the goal of poverty alleviation. "There is also growing recognition that for such programs to succeed governments and international organizations needs the active support of non-governmental and community based organizations already working at the grass root level. Increasingly, that recognition is reflected in the share of international aid directed to the poor in developing countries through NGOs" (6). The poor results by the government's various poverty alleviation programs have raised doubts as to the appropriateness of the design and seriousness in implementation. A careful review suggests that these programs have left out some important links. The planning commission needs

to show more transparency in its plan and it must build its own Nepalese poverty alleviation model if it is really to alleviate the penury of the Nepalese clan. The constraint however is this: in almost all of our governmental plans and programs, for example, there appears to be no clear linkages between the goal and the design, between design and implementation, between the lessons learned from previous programs and those applied to new programs, and between the knowledge and the practice of the implementing agency. Meanwhile, one greater accusation against the developmental failure in Nepal is given to non-accountability. Non-accountability has become a general phenomenon in every social, economic and political sphere in Nepal . Who should be held accountable for the success or failure of programs: the politicians? The civil servants? The donors? Or even the beneficiaries themselves? Who should be answerable to the beneficiaries, who are the ultimate bearers of the consequences? All these questions are debatable but must be answered if Nepal is to push ahead. The government and international organizations have proclaimed their commitment to reduce poverty and to give developmental tasks a very high priority for the rest of the decade. While recognizing that increased economic growth will contribute to poverty reduction, they must keep in mind, before implementing their policies, that they cannot eliminate poverty without programs of direct action targeted at the poor themselves. For example, practical experience as initiated by Grameen Bank, a micro lender in Bangladesh , suggests that programs that focus directly on income generation can generate the enthusiasm and participation of the poor, and help create an effective demand for the other aspects more rapidly. The progress in the latter aspects may not automatically be forthcoming; but future programs in these areas are likely to be less costly and more sustainable at the local level, experts are saying. Nonetheless, economists argue by stating that poverty is not -- and should not be -- measured only in terms of the income levels. According to them, poverty encompasses a broad range of social, economic, human, political, environmental and other aspects affecting quality of life. To be fair, their understanding is accurate. But let this be understood by all policymakers: the poor are often illiterate, and they are deprived of access to safe drinking water, health and sanitation services and many other facilities. Logically, poverty alleviation should mean improvements to all these aspects. However, is it reasonable for a program to aim at addressing all of them? If not, which ones should be given priority consideration? This is the most important question for Nepal to answer if it is to alleviate poverty and raise the standard of living of its people. But most indicators suggest that poverty alleviation is a tough job in Nepal because approximately 40 percent of the population lives below the poverty line of $12 per person per month and about four-fifths of the working population live in rural areas and depend on

subsistence farming for their livelihoods (7). The progress of development in Nepal will no doubt depend on the proper utilization of its resources -- both land and human resources -- but its progress also depends on concerted action by the global community, including industrial countries and external finance agencies. Their joint task is to foster a global economic climate that promotes the exchange of goods, knowledge and capital all over the world. And it is their duty to do so because 20 percent of the population in the developed nations consumes 86 percent of the world's goods (8). Nonetheless, in the midst of the global disparity, developing nations such as Nepal can develop but need a concrete economic road map to move ahead. It cannot afford to stroll on the boulevard of uncertainty, for time is running out. Much of Nepal remains crippled by poverty, disease and underdevelopment. Perhaps Nepal is destined to be underdeveloped because corruption, nepotism, favoritism, chaos, political uncertainty and lawlessness have taken center stage and there are no signs of them easing off in the near future because of the complexity of Nepalese politics. Hence, success depends upon getting many things right in Nepal ; for instance, economic, moral, social and legal transformation, to name a few.

Research and development: Missing input in economic growth

The growth in an economy is the outcome of the combined use of factors of production. Various factors of production are used for any particular output. They obviously are divided into two categories-direct and indirect. Land, labor, capital, energy and other intermediate inputs are direct factors of production whose contribution in growth can be measured directly and separately. Their share in the growth is directly estimated. But these factors of production by themselves are not efficient that is to say that they need external assistance to become efficient. For instance, the fertility of the land would gradually decline if farmers do not put enough inputs such as seeds, irrigation, labor, fertilizer and technological knowhow. Similarly, industrial products also need both direct and indirect inputs because direct input such as labor and capital is being made more efficient with the help of indirect input such as technology. The technological knowhow is generally termed as the indirect input that makes direct inputs effective and efficient. Generally, people consider labor and capital as the only factors needed to produce goods and services. There is no doubt these inputs play the most important role in production but they need additional help to become efficient. One way of making these factors of production efficient is the investment in human resource development. Man can develop and adopt new and innovative techniques for making labor and capital efficient. The consequence is that per unit cost of production declines with the increased use of new technology. It also enhances quality of goods and services within a fixed quantity of land, labor, capital and other intermediate input used to produce given amount of goods and services. Unfortunately, the role of technology in any type of economic activities has not yet been measured in the Nepalese economy. Hence, there is a need to assess the role of indirect factor of production (technology) in economic growth.

The hypothesis is that the output growth depends on the growth of labor, capital and productivity. The productivity growth depends on the technological knowhow while the quantity of labor and capital can be determined by the capacity of a given economy. The role of technology in growth is overshadowed as it is not considered as one of the inputs whose role is crucial and critical to increase productivity. Only after the 1950s, Solow proposed to measure the role of technology in growth. According to Solow, output growth of an economy is defined as the sum of labor growth, capital growth and productivity growth. The labor and capital growth are measured directly taking into account the direct input but the productivity growth has been measured indirectly as proposed by the Solow model. The rate of growth of productivity depends on the efficiency of labor and capital. The efficiency in producing goods and services depends on the level of the technology. However, the labor productivity measured on the simple calculation — total output divided by the number of workers — has traditionally been considered as the efficiency of an economy. This gives a rough idea of the per capita output in terms of labor. It cannot represent the total efficiency of an economy accounted over the use of technology. However, the labor and capital efficiency has been used to determine economic efficiency. The per unit output for a given amount of labor and capital has been considered as the labor and capital efficiency which is used to measure total economic efficiency. The per unit output in terms of labor and capital is the ratio of total output to labor and capital respectively. The measurement of the role of technology in the production process is known as the total factor productivity (TFP). TFP is the portion of output not explained by the amount of inputs used in the production process. It is the better measurement of overall economic efficiency as labor and capital alone are unable to capture. The government through its fiscal policy should have to focus on increasing the role of research and development (R&D) in promoting aggregate efficiency of the Nepalese economy. An adequate resource is needed to conduct research to increase the role of technology in the growth process. The role of R&D is immense in increasing the efficiency of labor and capital. But its role remains silent as it is unaccounted in the growth statistics. Nepal should realize the fact that it has to take the initiative to formulate a clearly defined technology policy. There are no studies to determine the share of technology in the growth in Nepalese economy. The degree to which Nepal has adopted new and advanced technology in all its economic sectors is low due to the low investment capacity in R&D. Irrespective of its investment in this sector, there is need to conduct a study to examine the role of technology in Nepalese economic growth. It will be the food for thought for planners and policy makers to the implementers to formulate policies to enhance its role in long run growth.

Political economy of inclusive growth

Despite identification and diagnosis of growth constraints and availability of required financing, political deadlock has stalled the implementation of poverty, health, and environment-related development programs in Nepal. Constant feuding between the nation’s major political parties has shaken the confidence of the people, development partners and also prospective investors. Maoists’ landslide victory in the Constituent Assembly (CA) election, 2008 and their exit after eight months of governance threatens the possibility of missing out May 8 deadline for completing new constitution. These eventualities have worsened socio-political and humanitarian challenges for Nepal. The civil service apparatus, which survived even during the height of armed conflict, now suffers from limited government capacity to guarantee sufficient material benefits to the poor. A weaker management structure, increased level of centralization at the ministerial level, poor supervision and misplaced accountability has been the salient feature of Nepal’s current governance system. Historically, Nepal has always experienced high degree of political and socio-cultural inequality and exclusion. The challenge in new Nepal is therefore, to maintain distributive justice and equity with regards to the allocation of goods and services. The fundamental question in a resource and capital-poor economy is the division of scarce goods by designing a modality where efforts can be made to offer fair share to every citizen. INVERSE RELATION BETWEEN GROWTH & DEVELOPMENT In spite of having major objectives to achieve accelerated growth and paradigm shift of outward-looking approach in the development policy, Nepal’s GDP growth rate remains one of the lowest in South Asia from the very beginning of its development planning. Nepal is the only country in the region whose real GDP growth rate declined in the period of 2003-2008 (3 percent) in comparison to the period of 1997-2003 (4 percent). Nepali economy is still characterized by subsistence agriculture with high incidence of pervasive poverty and a large degree of disguised unemployment. Industry has been the weakest contributor to gross domestic production. The GDP growth rate is low and erratic. The highest growth rate was realized at 7.6 percent in the year 1994 and was as low as 0.12 percent in 2002. The likely reasons are narrow industrial base (it is sad the contribution of industrial sector, in general, has remained less than ten percent), fluctuating contributions from agriculture and prolonged conflict. On the other hand, the contribution of service sector in the total GDP has increased continuously. Service sector started to pick up since 1975 and surpassed agriculture sector in 2001. Provided that an enabling environment is created for trade and investment by restoring political stability, the contribution of this sector is expected to increase further. Nepal’s agricultural products, including the food grain productions, are not cost competitive compared to India’s. The Government of India, in its annual budget of the FY 2010/11 has earmarked IRs 3, 75,000 crore (15.4 percent higher than previous year’s budget) for increasing agricultural production and productivity through easy access to credit. For infrastructure development the government has allocated IRs 1, 73,552 crore, which constitutes 46 percent of the total plan outlay. Focusing upon development of small and medium industries, the allocation stands at IRs 2,400 crore, which is 34 percent higher than last year’s. The list is long. This necessitates policy adjustment in Nepal’s forthcoming budget to diffuse negative impact of India’s budget on Nepal’s economy.

Nepal experienced a huge decline in the exports of readymade garments, thread, pulses, brans and zinc sheet to India as a result, exports dropped by 4.0 percent in the first half of 2009/10 as against a growth of 1.3 percent in the corresponding period of the previous year. The reason Nepal is experiencing increasing BOP deficits is because of the excess of imports over exports. For example, in terms of destination, the imports from India grew by 33.3 percent in the review period compared to a growth of 12. 4 percent last year. HOW INCLUSIVE IS INCLUSIVE GROWTH Nepal Living Standard Survey II conducted in 2003/04 indicated that poverty incidence declined from 42 percent in 1995/96 to 30.8 percent in 2003/04. The mid-term evaluation of Millennium Development Goal (MDGs) by National Planning Commission (NPC) reveals that poverty incidence in Nepal had further declined to 25 percent in 2008. Huge inflow of remittance (contributed one fifth of the total reduction in poverty) is considered to be the key factor for poverty reduction. Other factors include, the government’s budgetary allocation of around 43.7 percent for poverty reduction programs; non-governmental organizations’ efforts; social safety programs and infrastructure development. Increased road access, in fact, induces poor people to adopt modern technology in agriculture to diversify their agricultural products for generating more income. It took more than four decades (1951-1993) for Nepal to add nine thousand kilometer of road while the country added another eight thousand kilometer of road just within ten years from 1993-2004. Impact of road on poverty reduction has already been studied in Nepal. World Bank found that rural infrastructure had significant impact on poverty reduction and is pro-poor. Similarly, Government of Nepal found that increased access to road has positive impact of reducing poverty and the impact is stronger for lower quintile of the people. First, poverty did not come down proportionately for all the people in different regions. Secondly, income inequality increased simultaneously with the decrease in poverty incidence for the period 1995/96 and 2003/04. For instance, in 1995/96, Gini Coefficient was 34.2 but by 2003/04 it increased to 41.4. This indicates disproportionate distribution of the benefit of development among different people. Such trend necessitates the development of appropriate policy instruments to facilitate the concept and practice of inclusive growth. What is worrisome is that the declining incidence of poverty is accompanied by rising income and expenditure inequalities. It indicates policy failure in structural transformation, which was aimed at achieving higher rate of growth. Therefore, the reason that inclusive growth is on the top priority list is to make accessible public services and inputs such as land and credit to the poor. The policy under inclusive growth should focus on productive employment rather than on direct income redistribution. A developing country’s political system is pressured to contribute to direct income redistribution rather than directed towards creating productive employment. In an inclusive growth scheme, the pace of growth needs to be hastened and size of the economy enlarged, by guaranteeing equality of opportunity in terms of access to markets and resources through regulatory mechanisms. It

means expansion of both individual and economy-wide potential becomes possible under inclusive growth scheme. As long as significant segment of disadvantaged group of people are not included in the mainstream development process, there is a possibility that entire chain of prosperity will be broken. To conclude, efforts are needed to reinterpret development itself to avoid the dilemma that development is not merely a growth in per capita incomes. The fundamental reason to conduct such exercise is to find out the ways how the fruits of development percolate to the lowest level through the political economy of development

SRILANKA

Former military chief was advised to not to enter politics, Sri Lanka President says

Sri Lanka President Mahinda Rajapaksa has warned his former military commander General Sarath Fonseka against entering into politics, a news report said Thursday.

In an interview to Singapore's Straits Times, published on Thursday, the President calling Fonseka a fool to enter politics, said he advised the defeated presidential candidate not to enter politics as politics is not the Army where orders are followed strictly.

"I told him that politics is not the army. In the army, when you have an order, they follow. In politics you give order and they react in a different way... I told him, whatever he might think, I know this game, and I am going to win this election. Whoever is my opponent doesn't matter to me," Rajapaksa was quoted.

President Rajapaksa has ruled out an early pardon for the detained General as such a move would hurt the Army discipline.

When asked about the alleged coup plotted by the retired General against the government, the President declined to comment since legal proceedings are still continuing.

Speaking about his vision for the country the President said he wants Sri Lanka to be a hub for education, aviation, shipping, communications and tourism.

The President said he wants to be remembered as a man who loved his country and his people, and did his best to serve them.

Sri Lanka president visits Tamil heartland

Sri Lanka's President Mahinda Rajapakse reached out on Thursday to the country's ethnic minority Tamils as he made his first visit to their cultural heartland since his re-election.

Rajapakse, on a trip to battle-scarred Jaffna, the former stronghold of separatist Tamil rebels in the island's north, promised to work for national unity and reconciliation.

The campaign stop in Jaffna ahead of parliamentary elections on April 8 saw the 64-year-old address thousands of supporters at the Alfred Duraiappa Stadium, named after a former Jaffna mayor assassinated by the rebels.

Rajapakse resoundingly won re-election in January, largely due to a wave of popular support for his successful onslaught against the Tamil Tiger separatists last year, which ended their 37-year fight for a homeland.

"I thank all those who voted at the presidential election," Rajapakse said. "Even though not all voted for me, they participated in a democratic process which will lead to unity and national reconciliation."

Rajapakse won the votes of most of the Sinhalese ethnic group, to which he belongs, but lost out in Tamil areas such as Jaffna to his rival Sarath Fonseka, a former army chief.

The country remains deeply divided on ethnic grounds.

Fonseka, who led the battle against the Tigers, is under arrest and faces years in prison if convicted by a court martial on charges of entering politics while in uniform and breaking military procurements rules.

The ruling Freedom Alliance is tipped to win the April 8 elections as the opposition remains deeply divided after the crushing defeat of Fonseka.

Rajapakse said he was keen to establish IT-based industries in Jaffna, 400 kilometres (250 miles) north of the national capital Colombo, and spur greater economic development in the Tamil-majority region.

Tiger rebels ruled Jaffna as a de facto separate state for nearly five years till they were driven out in December 1995. However, access to the region was limited because of fighting that went on just outside the peninsula.

The president was also due to address another political rally in support of his Freedom Alliance party at the northern town of Vavuniya on the mainland, his office said.

The Psychological Impact of Political Violence in Sri Lanka

Commonly violence is defined as the intentional use of physical force or power, threatened or actual, against oneself, another person, or against a group or community that either results in or has a high likelihood of resulting in injury, death, psychological harm, maldevelopment, or deprivation (Krug, Dahlberg, Mercy, Zwi & Lozano, 2002).

Political violence refers to acts of violence undertaken to further the political objectives. Violence is a common means used by people and governments around the world to achieve political goals. In this context Sri Lanka is one of the countries that is highly affected by the political violence. The scale and intensity of political violence has increased in Sri Lanka over

the past few decades. Mob violence have become a common occurrence during the elections in Sri Lanka. Violence pervaded Sri Lankan social and cultural life. Although political violence and its associated factors are complex and multidimensional, violence continues to be a permeating and pervasive element of the Sri Lankan society.

Duncan Pedersen emphasizes the root causes for the political violence and of the view that in poor and highly indebted countries, economic and environmental decline, asset depletion, and erosion of the subsistence base lead to further impoverishment and food insecurity for vast sectors of the population. Growing ethnic and religious tensions over a shrinking resource base often escort the emergence of predatory practices, rivalry, political violence, and internal wars. (Duncan Pedersen -Political violence, ethnic conflict, and contemporary wars: broad implications for health and social well-being)

Collective violence

The collective violence is defined as instrumental use of violence by people who identify themselves as members of a group-whether this group is transitory or has a more permanent identity-against another group or set of individuals, in order to achieve political, economic or social objectives.

William Kornhauser introduced the social attachments theory of collective violence and it deals with the influence of a person’s interaction with society on their potential for membership in violent groups. This theory explains that people who have no attachments to society are more likely to join a group in order to have a sense of belonging.

Collective violence is often social control: self-help by a group. It typically defines and responds to conduct as deviant. When unilateral and nongovernmental, it appears in four major forms—lynching, rioting, vigilantism, and terrorism—each distinguished by its system of liability (individual or collective) and degree of organization -higher or lower. ( Roberta Senechal de la Roche Department of History, Washington and Lee University)

In Sri Lanka, collective violence had occurred in the form of civilian riots, protests pogroms, banditry and gang warfare.etc. Collective violence in Sri Lanka has taken place in political or ethnic dimensions and it has a drastic impact on mental health, as well as the economy.

Childhood trauma and violent behavior

Childhood trauma has a profound effect in brain development and it can negatively affect the person in relation with his / her behavior in the society. Children who had become the victims of collective and personal violence might carry anger and resentment towards the society and it can erupt in a violent form. The researches indicate that majority of the former members of the German Baader-Meinhof Group that engaged in political violence had traumatized childhood. Many research confirm that the link between adverse childhood experiences and social violence.

Trauma and violence that people experience can pass in to the next generation and it can lead to a vicious cycle. A 1998 study by R. Yehuda , et al Vulnerability to posttraumatic stress disorder

in adult offspring of Holocaust survivors [American Journal of Psychiatry, 155(9):1163-1171] confirmed that offspring of Holocaust survivor parents with PTSD have a higher lifetime risk for PTSD and report more distress after traumatic events. Therefore, sociopolitical violence has severe damaging effects to the population.

Religious Fundamentalism and Violence

Religious fundamentalism has become a subject of much controversy and debate and it has become one of the contributors of collective violence in the modern world. In the past few decades, collective violence had occurred in Sri Lanka as a part of religious fundamentalism and this trend is aggravating. The clergy who embrace violence and radical path of their faith are psychologically unsound and they view people outside their religion as opponents. They lack empathy when addressing issues related to the people outside of their religious circle and often justify violence against them. They preach hate and instigate their followers to commit violence. Often the clergy who support collective violence have had tormented childhood and some of them had been the victims of sexual abuse. Their anger and resentments are generalized or projected to people outside their faith or ethnic group. They put forth their insecurities as threats to the religion or conspiracies against religion and use it to validate violence.

Political Extremism that leads to Violence

Laird Wilcox defines political extremism as taking a political idea to its limits, regardless of ‘unfortunate’ repercussions, impracticalities, arguments and feelings to the contrary, and with the intention not only to confront, but also to eliminate opposition with the intolerance towards all views other than one’s own by adoption of means to political ends which show disregard for the life, liberty, and human rights of others.”

Political extremism in Sri Lanka has vivid faces and the extremism is often masqueraded by using national feelings or religious ideology. Political extremist is one who advocates or resorts to measures beyond the norm, especially in politics. His antisocial components are often concealed and it can emerge when the time and situation is favorable. The political extremists often try to create a homogeneous society that is based on religion or ethnic group.

What is the deep psychology beneath creating a homogeneous society disregarding the multi ethnicity or multi religious spectrum? This indicates the sadistic homosexual instincts inside the extremist’s mind. This feature was evident in Adolf Hitler’s mind. Hitler took every effort to create a homogeneous society in Germany. Hitler believed that the Aryan race were supreme to other races and did not have any racial tolerance. His extremism was connected with the libidinous instincts. According to Henry Murray a prominent personality specialist at Harvard University, Hitler was confused about his sexuality.

According to the DSM 4 homosexuality is not a mental illness but homosexual instincts mixed with sadistic traits and if the person is deeply troubled by it a pathological condition may appear. A political extremist who is deeply confused with his sexuality unable to come to terms with his homosexual impulses would try to create a homogeneous society under any cost. He would be

focused and make this extreme vision as his life mission. The German people once surrendered their liberty to such a person.

Political violence and Democracy

Political violence manifests itself at all levels of social organization. The prolonged arm conflict in Sri Lanka has caused a massive and radical transformation in democracy justifying political violence. Free arm circulation aggravated the condition and violence has became a part of day today life. Many politicians facilitated such conditions and saw it as one of the easy ways to grab power and rule inspiring fear among the opponents. The vicious cycle of political violence affected the every layer of the Sri Lankan society.

Kristine Höglund, of the Dept. of Peace and Conflict Research – Uppsala University describes the nature of political violence in Sri Lanka.

……From the perspective of democratic politics, violence and insecurity may affect the election results or the outcome of elections in various ways. Threats and intimidation may be used to interfere with the registration of voters. Voter turn out may be influenced if large sections of the population refrain from casting their votes due to fear of violence. Assaults, threats and political assassinations during the election campaign may force political contenders to leave the electoral process or prevent elections from taking place. ( Electoral Violence in War-Ravaged Societies: The Case of Sri Lanka by Kristine Höglund )

Political violence in the first parliamentary elections in Sri Lanka

The first parliamentary election of Sri Lanka was held in 1947 and mob violence were unleashed in larger scale. As a result of such action, one active supporter of the Communist Party of Sri Lanka (pro-Soviet wing) was injured and became disabled. His 4-year-old son became heavily traumatized by this incident. As a boy, he realized that the people in politics made his father a disable aggravating their living condition. In the later years, the disabled man’s son launched two insurrections causing a collective trauma in Sri Lanka. In the both events, nearly 70,000 people lost their lives.

The Prabhakaran Fctor

Ethnic riots were initiated as a part of political violence in Sri Lanka. Some of the local politicians organized gang violence against Tamils for cheep popularity. When the tensions rose between the Tamils and Sinhalese, some people fabricated awful stories to keep high emotions. Young Prabhakaran used to listen to the terrible stories that occurred in the Gal Oya riots (1956) and 1958 ethnic riots where the mob savagely attacked the Tamil civilians causing many deaths. As the investigative journalist M.R.Narayan Swamy describes he was utterly ravaged when he heard the story of the violent murder of a Hindu Poosari in Panadura. The Poosari was burnt alive by the mob during the ethnic riots in 1958. He was determined to take revenge. He became very much focused and his made his entire life mission to fight Sinhalese. At the age of 16, he committed his first antisocial act – setting fire to a CTB bus. When he became the leader of the LTTE he ordered a number of massacres including Anuradhapura

massacre in 1985 and Aranthalawa Massacre in 1987 and hundreds of suicide bombings targeting Sinhala civilians. Hence, Prabhakaran launched his terror for three decades causing over 90,000 deaths in Sri Lanka

Violence conducted by the radical political groups in Sri Lanka

In Sri Lanka, several radical political organizations conducted violence to achieve their political targets. The JVP launched two insurrections in 1971 and subsequently in 1988. Tamil militant groups launched their violent campaigns since 1970 s and the LTTE became the mainstream militant group that was in action until 2009 May.

As Professor Gamini Samaranayake highlights the origin and development of the JVP and the LTTE relate more closely to the social expansion and the lack of economic and political development in Sri Lanka since the beginning of the 1960s. Basically, both groups are more action-oriented than ideology-oriented and dominated by youth with a similar socio-economic background.( Political violence in Sri Lanka: A diagnostic approach Gamini Samaranayake )

The former JVP General Secretary Lional Bopage explains the genesis of political violence in Sri Lanka in following account.

The island’s post-1948 political leadership did not come into being as a result of a coherent anti-colonial struggle that unified its people. The neo-colonial establishment not only carried forward the policies and practices of the exclusively colonial, mono-cultural and unitary administration, which were not only incongruent with the culturally and linguistically diverse nature of its inhabitants, but also their socio-economic, political and cultural expectations.

The post-colonial Sri Lankan state never considered it significant to protect the dignity and security of marginalised and disadvantaged social groups. Domestic issues were viewed and dealt with in a mindset of a conflict paradigm. Peaceful demands for social equity, justice, security and dignity were continuously disregarded and/or violently suppressed. The indignity and insecurity caused by such attacks on the physical and psychological integrity of individuals and communities thus motivated them to take up arms.- (Political violence in Sri Lanka- L. Bopage)

The Ethnic Riots and Political Violence

The human rights activist Rajan Hoole points out that the politicians like Gamini Dissanayaka, Cyril Mathew etc instigated ethnic riots as a part of political violence. (Sri Lanka: The Arrogance of Power: Myths, Decadence & Murder – Rajan Hoole)

Following extract is taken from Sri Lanka: The Holocaust and After,” by L. Piyadasa, Marram Books, London (1984) which gives a comprehensive account how violence can be planned and executed by the politicians.

In Kelaniya, Industries Minister Cyril Mathew’s gangs were identified as the ones at work. The General Secretary of the government “union” the Jathika Sevaka Sangamaya (J.S.S.) was

identified as the leader of gangs which wrought destruction and death all over Colombo and especially in Wellawatte, where as many as ten houses a street were destroyed. A particular U.N.P. municipal councillor of the Dehiwela-Mount Lavinia Municipality led gangs in Mount Lavinia. In the Pettah (the bazaar area, where 442 shops were destroyed and murders were committed) the commander was the son of Aloysius Mudalali, the Prime Minister’s right-hand man. And so on. Thugs who worked regularly for the leaders of the U.N.P., the Ministers of State and Party Headquarters, and in some cases uniformed military personnel and police, were seen leading the attack. They used vehicles of the Sri Lanka Transport Board (Minister in charge, M. H. Mohammed) and other government departments and state corporations. Trucks of the Ceylon Petroleum Corporation’s Oil Refinery came from many miles away bringing the men who destroyed so much of Wellawatte. There is much other evidence of this sort. In view of the quasi-governmental nature of the “action,” the killings that took place may have been difficult for the eye-witnesses to resist … But in the neighbourhoods, after the initial shock, Sinhalese and Burghers organised themselves and kept off the gangs who had been sent to burn and kill.

How Nuwara Eliya was erupted following the minister Mr. Gamini Dissanayake s visit, specifies in Sri Lanka – ‘Paradise’ in Ruins,” (Sri Lanka Co-ordination Centre, Kassel, 1983. )

The town was closely guarded by the army. All vehicles were checked. Bus conductors had orders not to transport Tamils. Minister Gamini Dissanayake came from Colombo to Nuwara Eliya to hold a meeting with party members. The day before, M.P. Herath Ranasinghe had arrested precautiously (sic) some well-known rowdies. Soon after the end of Gamini Dissanayake’s party meeting they were released. These people went out immediately, well-equipped with petrol, iron rods and other kinds of weapons, and tried to attack two Tamil priests in town. They managed to escape. Without having succeeded they moved on – another mob joined up with the first one. They laid a ring of petrol around a Tamil shop which was then burnt.

Election Violence

Electoral violence has become a widespread trait in Sri Lankan politics. It has profound effects on people and their perceptions about politics and power. As Kristine Höglund, of Uppsala University points out that the electoral violence is used for a number of reasons: to hinder people from voting, to prevent candidates from campaigning, to display discontent with election results, or to overthrow the outcome of the election.

Politics in Sri Lanka and in the Village Politics impede many aspects of life in Sri Lanka. In an anthropological study of a rural village, politics in Sri Lanka is described as “a consuming passion” (Spencer 1990), closely linked to nationalist and religious identity formation. State-based political patronage is widespread in Sri Lanka. State resources have been used by the party leaders for personal benefits, to reward political loyalty, to remain in power, and to undermine the opposition (Suri 2007, 46).

Patron-client relationships are core aspects of party politics and organization in Sri Lanka. The party workers and supporters expect benefits in different forms – for themselves and for their family. Such rewards include, for instance, employment opportunities, state contracts and loans,

or governmental welfare benefits (Suri 2007, 99). (Hoeglund, Kristine.- Paying the Price for Patronage: Electoral Violence in Sri Lanka )

Series of violence were unleashed in 1977 elections and many people became victims. Similarly, in subsequent elections this violent trend became a foremost factor. Murders, assaults and arsons became common occurrences during the election time. In the infamous Wayamba Provincial Council, election in 1999 52-year-old woman was assaulted and stripped in public by a local politician.

In 2001 election, a new tendency emerged in the Sri Lankan politics and politicians used army deserters and ex combatants to initiate election violence in larger scale. The culmination of the violence took place in Kandy on polling day for the General Election and ten Muslim youth were gunned down in Udathalawinna.

A large number of combatants with battle trauma took part in election violence from 2001 to 2010 elections and some of them were believed to be undiagnosed PTSD patients. As military psychologists indicate, anger and violence are prevalent problems combatants with PTSD.

Matthew Tull, of the University of Mississippi Medical Center in Jackson did extensive case work on PTSD and social violence. According to him, individuals with PTSD may have intense and unpredictable emotional experiences, and anger and aggressive behavior may ways of establishing a sense of control. Anger may also be a way of trying to express or release tension connected to uncomfortable emotions often associated with PTSD, such as shame and guilt. His research on Iraq and Afghanistan War veterans who screened positive for PTSD reported significantly greater anger and hostility than those in the subthreshold-PTSD and non-PTSD groups. Veterans in the subthreshold-PTSD group reported significantly greater anger and hostility than those in the non-PTSD group.

It’s a known fact that the traumatized soldiers can be used to commit political and social violence. This factor was seen in Somalia and in Rwanda. Extreme groups transform traumatized people into perpetrators of violence. At the end of the American Civil War, extremists formed KKK that conducted a series of racial violence in America through ex soldiers. Many Lincoln brigade soldiers who fought in the Spanish civil war involved in social violence soon after the Great Depression.

Political Violence and Antisocial Personality Disorder

From JRJ to the present leadership every head of the state had his or her henchmen to carry out politically connected violence. They were either ministers or the members of the parliament or thugs with political patronage. Most of them were under educated and had violently inclined behavior. These mob elements had committed a number of atrocities and violent acts but they were always protected and safeguarded by their political masters. This phenomenon has become a naked reality of politics in Sri Lanka. These men were always above the law and had licenses to commit violence in the name of their political leaders. In the psychological context, these characters have deviant behaviors and fit in to the diagnostic category of Anti Social Personality Disorder ( ASPD).

Antisocial Personality Disorder is a condition characterized by persistent disregard for and violation of the rights of others. Deceit and manipulation are central features of this disorder. The people with ASPD disregard the social norms and respect to lawful behaviors. They are impulsive as well as aggressive and with a slightest provocation, they can commit violent acts. They are also reckless disregard for safety of self or others and irresponsible. Their characters are marked with lack of remorse. They are selfish, callous and remorselessly use of others to full fill their goals. They have chronically unstable, antisocial and socially deviant lifestyles. When these brands of men become politically powerful, they can do a vast damage to the country.

Psychological Impact of Political Violence

There is a close relationship between political violence, mental health and psychosocial wellbeing. Political violence has a variety of discernible long-term effects on political beliefs and attitudes, behavior and behavioral intentions, emotions, and other psychological variables. It can massively affect the mental health of the people. People constantly exposed to violence and deteriorating social conditions, become emotionally insensitive and gradually losing their respect for the values of life. The “culture of violence” transforms people to believe that aggressive attitudes and violent behavior are normal and acceptable in an environment where violence is viewed as an acceptable way to get and maintain power and to solve problems. Therefore, psychological distress and mental disorders are closely connected with political violence.

Brandon A. Kohrt of the Emory University, Atlanta, Georgia, did a clinical research of the Bhutanese refugees in Nepal and the impact of the Maoist People’s War and found that psychological distress and mental disorders in situations of political violence.

Political violence is linked to poor mental health outcomes at the individual and collective levels. People exposed to political violence have symptoms of traumatic stress, depression, anxiety and aggressive feelings and it can lead to a vicious cycle of further violence.

Raija-Leena Punamäki – Department of Psychology, University of Helsinki did extensive study on political violence in Palestine and according to him exposure to political hardships also increased mental health problems, which is a reminder of the price which people are forced to pay in order to cope with political violence.

Ending Political Violence in Sri Lanka

Sri Lanka is a beautiful country with high 91% literacy rate. This earthly paradise has been deeply traumatized by the political violence for many decades. The violence has generated further violence damaging inner layers of the communities making it more dysfunctional. Ending political violence in Sri Lanka is a responsibility of an every citizen. When the civil society is aware of the manipulative nature of the political violence, they do not support such action. When the people have insight, they are not gullible or easily carried out by false propaganda that instigates political violence. When the civil society is strengthened and it is safeguarding democracy and protecting human rights there is no space for the political violence.

The Psychological Impact of Political Violence in Sri Lanka5.053

Sri Lanka police arrest opposition candidate for threatening a woman

Sri Lanka's main opposition, UNP candidate for the Colombo District and former journalist Susil Kindelpitiya was arrested by the Mirihana police today (2).

Kindelpitiya was arrested on a complaint lodged by a woman yesterday (1) who claimed she was abused and threatened by him.

Police Spokesperson SP Prishantha Jayakody said the woman had complained that she was also Kindelpitiya's mistress for the past two years. She has told the police that he had threatened her and she feared for her life since he possessed several illegal firearms.

Jayakody said that when the police finally caught up with him this morning, Kindelpitiya was with another young woman, a navy deserter, and was in the possession of a 7.62 mm pistol.

According to the complaint received by the police, Kindelpitiya had allegedly abused many other women as well. Kindelpitiya entered politics after resigning from his post as News Director of the Sirasa media network.

The police are currently conducting further inquiries

'Fonseka could die in custody'

COLOMBO: The wife of Sri Lanka's detained ex-army chief Monday accused authorities of preventing her husband from receiving vital medical treatment and said he could die in custody. Sarath Fonseka's health had deteriorated since he was held at the naval headquarters in Colombo. The government is insisting that he is not suffering from any ailment to deny him specialist treatment and thereby ensure his natural death in custody, Anoma fonseka said in a statement. She said her husband needed specialised care since suffering injuries in an April 2006 suicide assassination attempt blamed on Tamil Tiger rebels, whom he eventually crushed in May last year as army chief. Following concerns raised by Sarath Fonseka's political allies, the military had denied earlier that the general's health was failing and said a medical examination had found nothing wrong. "A naval doctor and another specialist examined General Fonseka on Monday morning," the military said in a statement, adding that the doctors had not noticed any health problems with the former army chief.

Fonseka, who led the military to victory over the Tamil Tiger rebels last year, fell out with President Mahinda Rajapakse and unsuccessfully tried to unseat him in elections in January

Sri Lanka Suspicious over UK “The UK is biased. The timing of this statement is very suspicious. Britain has been harping about Sri Lanka’s human rights record for a very long time. They have clearly planned this to suppress the victories of the government,” Minister Rambukwella said. He further said that a special government delegation will be replying to Miliband’s statement shortly.

In a special video statement released by Miliband, the British Foreign Secretary said that there are three priorities which he has identified for the Sri Lankan government to address in the months and years to come. Miliband said that he had raised these priorities at the meeting of the Global Tamil Forum which he had addressed in London last month.

“One of the things that is important to say is that I give the same message to you, the mixed audience, as I gave to the Global Tamil Forum. It is very important in the modern age that we give consistent messages to the audience. The first priority in Sri Lanka, concerns the renunciation of violence. It is through politics that social and economic change occurs and not through violence. Violence does not serve any of the communities in Sri Lanka,” Miliband said in his special statement.

The second priority, he said, concerns the social economic political rights of all Sri Lankans on an equal basis. “Many of you will be concerned for the run up to and after the recent Presidential Elections and also the restrictions on media freedom in Sri Lanka. It is very vital that we understand that a healthy democracy thrives not just through elections but also through an independent judiciary in an independent society,” Miliband said.

He added that the second set of rights which Sri Lanka should recognize is the development of constitutional norms that respects the equal rights of all of Sri Lankan citizens. “This is a challenging issue in any country but respect for minority rights is an absolutely vital part of the values that are essential to a civilized society,” he said.

Further addressing the suspension of the GSP+ trade benefits to Sri Lanka, Miliband said that the European Union wants to have an open and engaged trading relationship with Sri Lanka but have been forced to suspend the GSP+ provisions because of the absence of key human rights issues that have been raised by the European Commission. “I very much hope that in this period the Sri Lankan government will urgently address them,” Miliband said

Bringing Tamils back into mainstream critical for new Lankan govt post elections: CSM

Colombo, Apr. 2 (ANI): Sri Lanka's parliamentary elections scheduled for April 8 could become the prelude of a new era of progress, if the newly elected government decides to end discrimination among Lankan natives and Tamils and unify the war-torn nation, experts say. But if the government pursues the same discriminatory tactics it used for the presidential election in January, it will further alienate the island's Tamil community and diminish hopes for peace, the Christian Science Monitor reports.

While the presidential elections were the first in more than a quarter century, they were marred by the misuse of state resources to aid the ruling party's candidate, unfair coverage by the state media, and poor transportation to carry internally displaced Tamils to their voting places, the report notes. The election results illustrated the deep polarization between Sri Lanka's Sinhalese and Tamil communities that fueled a 26-year civil war and left about 100,000 dead, it added.

Now experts say that Rajapaksa's new government needs to reach out to the Tamil community and repair the economic, personal, and physical wreckage from nearly three decades of fighting. "The government of Sri Lanka must address the underlying issues that gave birth to the conflict: equality for Tamils under the law, particularly with regard to basic freedoms and human rights," the report says. "Paramount are the rights to free speech, freedom of movement and a free press, all of which are essential to guaranteeing the legitimacy of next week's parliamentary elections and ensuring that Tamils are stakeholders in the island's democracy," it adds

Sri Lanka cenbank says met all end-March IMF targets Sri Lanka has met end-March IMF targets for net domestic financing, net international reserves, and reserve money required under a $2.6 billion loan, its central bank governor said on Friday.

"We met all three end-March targets for the IMF programme," Ajith Nivard Cabraal told Reuters. However, he did not elaborate on the numbers.

Koshy Mathai, the IMF's resident representative for Sri Lanka, said the lender was waiting for the end-March data.

"I had a meeting with the governor yesterday and he said that end-March targets were met. We haven't seen the data yet. If that's true, we are really happy," Mathai said.

The IMF delayed the third tranche of the loan on Feb. 25 after Sri Lanka's 2009 budget deficit hit an eight-year high of 9.7 percent, overshooting the IMF target of 7 percent

Sri Lanka President hands over rehabilitated Tiger cadres to parents

Sri Lankan authorities Thursday handed over 1,365 former LTTE soldiers who had been rehabilitated by the government, to their parents at a ceremony held at Pambeimadu Army Camp in Vavuniya with the participation of President Mahinda Rajapaksa.

President Rajapaksa symbolically handed over three former combatants, Yogeshwaran Aravindan, Hinduraja and Hindur to their parents.

The group of 703 male cadres and 467 female cadres had been forcibly recruited by the LTTE as the war escalated in the North. Among the returnees were 31 who were qualified to enter the university and 164 minors.

They were arrested by the Security Forces during the war and subsequently detained in rehabilitation camps where they were given educational and vocational training to prepare them to enter the society and make a living.

President Rajapaksa also opened a computer centre dedicated for further training of the youth who received computer training during their rehabilitation. Virtusa Corporation donated the computers worth Rs 25 million for the center.

The youth requested the President to take measures to provide more education and self employment opportunities in the war-battered region. The President instructed his officials to take necessary measures immediately to fulfill the rehabilitated cadres' request.

Minister of Resettlement and Disaster Relief Service Risath Bathiyutheen, Northern Province Governor Major General G.A. Chandrasiri, Secretary to the President Lalith Weeratunga, Vavuniya Government Agent Ms. P.S.M. Charles, Northern Commander Major General M. Hathurusinghe and Wanni Commander Major General Kamal Gunaratna along with all Divisional Heads of the Army were also present

Sri Lanka opposition parties discuss formation of a national reconciliation government

Sri Lanka's Democratic National Alliance (DNA) led by former Army Commander Retired General Sarath Fonseka has initiated discussions on an "unofficial" level with other opposition parties the possibility of forming a national reconciliation government after the April 8 general election.

DNA front liner and Marxist party JVP parliamentary group leader Anura Kumara Dissanayake said the party has already held "unofficial discussions" with several opposition parties to consider the possibility of forming a joint opposition government after the elections.

He said there were two ways to form a government. "One way is to be elected with a majority through a general election to form a government and the other is for several opposition parties to join together to form one," he explained.

Meanwhile, the Opposition Leader Ranil Wickremasinghe has reportedly said the opposition would gain the majority in the next parliament after the general election with about 115 seats.

He said the UNP led UNF would receive 83 seats, the Tamil parties between 15-20 seats and the JVP the remaining number of seats required for a majority.

Sri Lankan government to raid price gouging traders

Sri Lanka's Consumer Affairs Authority (CAA) has taken measures to carry out raids to nab errant traders throughout the country during the upcoming New Year festive season.

Chairman of the CAA, Rumi Marshook said 75 newly trained officers will be deployed island wide to carry out the raids on price gouging vendors.

In addition, action will be taken against vendors who sell expired products and who do not display price lists, the Chairman warned.

The CAA has carried out 2,750 raids last month, especially to nab traders selling rice above government set prices. The Authority has taken action against 1,300 traders charged with selling rice above the government set price.

Sri Lanka Opposition Leader says government does not have any development plans

Sri Lanka's Opposition Leader Ranil Wickremasinghe says the current government does not have any development plans and has missed all opportunities to serve the people.

He told a public rally in Kiribathgoda yesterday (1) that the current government is trying to gain credit for the development programmes and construction work initiated and planned by the United National Party.

According to Wickremasinghe, the government in its eagerness to gain credit for all development programmes has forgotten the history of the development initiated by the UNP.

Referring to the Hambantota Harbor project, Wickremasinghe observed that it was a plan of the UNP. He said that the government's much talked about project was in fact a UNP plan.

"It is no wonder that these government candidates are talking about developing Gampaha, because they do not know the history about Gampaha and that the area was developed best during the UNP. Former UNP Leaders like the Late J R Jayawardena and R. Premadasa developed Gampaha on an unprecedented scale. The Biyagama Export processing zones, roads and market construction were done during the UNP regime," Wickremasinghe said

Sri Lanka accuses the UN

Sri Lanka has questioned the double standards of the United Nations by attempting to set up an expert panel on Sri Lanka within nine months whereas it took nine years for the organization to set up a probe commission to investigate Britian's involvement in Iraq. Foreign Minister Rohitha Bogollagama, questioning the UN’s rush in appointing such an expert committee on Sri Lanka, stated that the UN Secretary General Ban Ki Moon should have granted more time and space to the government to address the issues raised by him. “We defeated terrorism only nine months ago in May 2009. Now we are into April 2010. In the UK, it took nine long years to appoint a committee to investigate affairs on the Iraqi issues and UK’s involvement such as the deployment of forces, violations of human rights etc. In Sri Lanka, only nine months have passed so it would have been better if the Secretary General would have given us more time and space,” Minister Bogollagama said. The government has also raised suspicion on the timing of such a panel and said it ‘was a matter of concern’ as to why such a decision was taken just before an election.

“We also could do just an adhoc arrangement but they are not going to serve the purpose. It is a matter of concern why the Secretary General decided to appoint such a committee just before a general election. We oppose this move because it was not needed and not warranted and the timing is absolutely not right for the Secretary General to have proceeded,” Minister Bogollagama said. The Foreign Minister further said that the Secretary General should have obtained the permission of the Security Council to appoint such a committee which would look into the affairs of another country and clearly ‘hoped’ that Mr. Ban Ki Moon would respect and avoid any type of influence in the local electorate in a manner that would have very adverse repercussion

India donates cement bags to the resettled families in Northern Sri Lanka

Indian High Commissioner to Sri Lanka, Ashok K. Kantha, at a ceremony in Peliyagoda today handed over the 10,000 cement bags to the Secretary of Ministry of Resettlement and Disaster Relief Services U.L.M.Haldeen for the benefit of the resettled civilians in Northern Sri Lanka.

This is the first lot out of the 400,000 cement bags being supplied by the Indian government, a press release issued by the Indian High Commission in Colombo said. The cement bags procured from Ultratech Cement Lanka Pvt. Ltd. will be supplied in lots of 10,000 bags each day for the next 40-45 days.

The bags will be dispatched to various areas in North by Sri Lankan government authorities for distribution among the resettled population in the Northern Province.

Each resettled family is expected to receive 8 cement bags to use for repair and renovation of their houses damaged during the war.

These cement bags, along with an earlier supply of 530,000 Metal Roofing Sheets by India are meant to contribute to reconstruction of dwellings of the resettling IDPs in the new areas of their habitation, the High Commission said.

The total cost of the cement consignment at 200 million rupees (US$ 1.75 million) is financed from the 12.5 billion rupees grant assistance announced by Government of India for reconstruction activities in Sri Lanka in May 2009.

The High Commissioner speaking on the occasion said the Indian contribution of cement bags and roofing sheets was based on the priorities and requirements projected by the Sri Lankan government.

Kantha expressing hope that the supplies would assist the resettling IDPs in rebuilding their lives said India is actively working on rehabilitation assistance directed at restoring the social, cultural, and economic infrastructure in the Northern Province.

The assistance includes a proposal for reconstruction and restoration of the damaged houses, hospitals, and schools for the re-settling IDPs as well as reconstruction of the railway

infrastructure for which the Government of India has already announced a line of credit of US$ 425 million.

The High Commissioner added that India and Sri Lanka enjoy extremely close and cordial relationship and Indian contribution to the rehabilitation and reconstruction efforts in Northern Sri Lanka was a manifestation of the excellent and friendly relations between the two countries

Sri Lanka's Opposition Leader calls on Speaker to summon urgent party leaders meeting

Sri Lanka Opposition Leader Ranil Wickremasinghe has in writing requested the Speaker of Parliament, W.J.M. Lokubandara to summon an urgent meeting of party leaders to resolve the issue related to the swearing in of two new UNP MPs in place of UNP defectors Johnston Fernando and Indika Bandaranayake.

Wickremasinghe's letter to the Speaker was in response to an earlier letter sent to the main opposition by the Secretary General of Parliament that two new UNP members could not be sworn in on April 6 as the House is to meet for a specific purpose.

According to Wickremasinghe, it was the Secretary General of Parliament who initially informed the Elections Commissioner in terms of Section 64(1) of the Parliamentary Elections Act of the two vacancies.

"It was thereafter that the Commissioner of Elections acting in terms of Section 64(2) of the Parliamentary Elections Act gazzetted the names at Messrs M.M.M Mustafa, D.R Bandaranayake and Anura Gopallawa as being duly elected to fill these vacancies," the letter stated.

The Opposition Leader had reminded the Speaker that the non- filling of these vacancies would deprive the people from Kurunegala the fundamental right to represent the area.

He told the Speaker that not swearing in the members whose names were gazetted is tantamount to permitting Fernando and Bandaranayake to enjoy the benefits of being Members of Parliament

Sri Lanka new port seen breaking even by 2015 Apr 02, 2010 (LBO) - A new port being built in southern Sri Lanka will face difficulties in the first few years in repaying loans taken from China to build it but should reach breakeven by 2015, a senior official said. Sri Lanka Ports Authority chairman Priyath Wickrama said the Hambantota port has a business plan to generate revenue to repay loans and would not be a burden on the authority.

"During the first three years we have some issues but after 2015 we should reach breakeven," he told a forum organised by the Ceylon Association of Ships' Agents.

He was responding to a question on whether the port, initially for bulk cargo, would be able to make enough money to repay 360 million dollars in loans from China's Exim Bank taken to build it.

The port is being built by Chinese contractors.

"We have a proper business plan to meet the target. Also there is a grace period in repaying the loan by which time we expect to have developed the business."

Port construction was ahead of schedule and the first ship is expected to berth in November this year.

"We will not burden Colombo," Wickrama said, referring to the island's main habour, which is a transhipment hub for south Asia and the main source of profit for the SLPA.

Lanka seeks India's help for power plant

India will help Sri Lanka in construction of a 500 MW coal-based power plant in Trincomalee and an agreement in this regard is expected to be signed next month.The agreement is being signed pursuant to a request from Sri Lanka for financial support for the power project in the eastern part of that country.

Officials from both the countries held a meeting here last month to discuss modalities for the proposed project and agreed to sign the pact next month, sources said. "The Sri Lankan government is seeking financial assistance from India for developing a port and a power evacuation infrastructure for the project," a senior NTPC official told PTI. However, the amount of funds sought by the Sri Lankan government is not known at this point of time. The meeting was held in the first week of March, the next one between the two governments is expected shortly, with the likelihood of the joint venture agreement being signed in May, the official said, adding that the financials of the project would be discussed in the meeting. The Rs 4,000-crore thermal project is a joint venture between India and Sri Lanka and is the latter's first largest coal power plant. While, construction work on the coal power plant will be undertaken by NTPC, the Ceylon Electricity Board will monitor the engineering work for it. NTPC is spreading its operations across the sub-continent and has zeroed in on countries like Sri Lanka and Bangladesh for constructing thermal power projects. India and Sri Lanka have also signed a Memorandum of Understanding (MoU) for providing 250 MW of power from the former's central grid to Bangladesh. An estimated investment to the tune of Rs 870.6 crore is required for grid inter-connection, of which Rs 710 crore would be spent for works in Bangladesh and about Rs 240 crore in India.

As per the deal, Bangladesh's Power Development Board (PDB) could sell electricity to India when it will have surplus electricity.

Foreign election monitors to arrive in Sri Lanka today

A team of foreign election monitors is due to arrive in Colombo today (01) to observe the next week's parliamentary election, a local group said.

According to People's Action for Free and Fair Elections (PAFFREL) sixteen observers from Japan, Bangladesh, Malaysia, Indonesia, Afghanistan and Thailand representing Asian Network for Free Election will be arriving in the country on a request made by the election watchdog.

The team divided into eight groups will be deployed, particularly, in the North and East from tomorrow until April 10 to cover pre and post election periods, PAFFREL executive director Rohana Hettiarachchi told the media.

Another five foreign observers invited by the Center for Monitoring Election Violence (CMEV) will be arriving in the country on Friday for pre-election monitoring.

Both monitoring organizations have deployed a combined total of 14,670 local monitors to ensure a free and fair parliamentary election on April 8.

Sri Lanka's president urges Tamil voters to trust him

Sri Lankan President Mahinda Rajapaksa on Thursday promised voters in the minority Tamil city of Jaffna a role in solving their own problems in his second visit since the end of a three-decade civil war in May.

Voters in Jaffna and other Tamil areas roundly rejected Rajapaksa, who led Sri Lanka's victory over the Liberation Tigers of Tamil Eelam and their 25-year-separatist war, at a presidential poll in January at which he secured a second six-year term.

The president's United Peoples Freedom Alliance (UPFA) is campaigning for parliamentary polls on April 8, at which Rajapaksa hopes to secure a two-thirds majority to give him the votes to change the constitution to his liking.

"We should get rid of the ethnic thinking and should not be racists," Rajapaksa said. "We will be able to solve the issues in the north through the people's participation councils by giving the opportunity to the people to address issues by themselves." Rajapaksa was addressing a small crowd in the stadium in Jaffna, at the Indian Ocean island's northernmost tip. Although the president's party is expected to secure a majority in parliament, he is unlikely get many Tamil votes.

"Let's have a bright future," he said. "Trust me as I trust you."

Rajapaksa used the Sinhala words jana sabha, a reference to local councils which have had a role in Sri Lankan governance in the past. In general, the citizen panels advised elected bodies like the provincial and city councils.

A core goal of the Tamil Tigers and other Tamil political groups has been devolution of power from the central government in Colombo, which has been dominated by the Sinhalese ethnic majority since independence from Britain in 1948.

The Tigers led one of Asia's longest-running wars in an attempt to create a separate state in Sri Lanka's north and east for Tamils.

Asked if the president was talking about some kind of devolution, a senior official in the president's office said it was not clear yet what shape the people's councils would take, nor how they would be funded.

Soldiers did not permit journalists who attended the rally to speak to voters after the president spoke.

"I'm afraid that Mahinda will take revenge on us for not voting for him at the presidential elections," a 41-year-old state employee who identified herself only as Priya told Reuters on the streets of Jaffna.

Jaffna is considered the center of Sri Lanka's Tamil culture, but the war has left it in ruins. It has only now begun to show signs of new life after 15 years under heavy guard by troops fending off ceaseless Tiger attempts to retake it.

"Thirty years of armed struggle was useless and a waste of time for Tamils," 55-year-old S. Shivapragasham told Reuters. "It's time to get what we lost from whoever comes in."

Sri Lanka govt rules out more protection, subsidies for business Apr 02, 2010 (LBO) - The Sri Lankan government cannot give more protection and subsidies for local and export businesses who must instead be more productive and innovative, Treasury Secretary P B Jayasundera said. He told the National Chamber of Exporters the government has delivered peace by ending the Tamil Tiger war and begun building key infrastructure like roads, ports, airports and power plants.

It was now up to businesses to be entrepreneurial and more productive and make the country a more advanced economy, he said.

The government wants to increase earnings from more value-added exports and services to accelerate economic growth.

Jayasundera was responding to calls from the NCE for electricity subsidies to make exporters more competitive, release of state land for businesses like export agriculture and curbs on imports to encourage local production.

Sri Lankan businesses face the highest electricity costs in the region and have also suffered from years of high inflation which hit 28 percent last year but has now been reduced to single-digit levels.

Jayasundera said "break-neck" economic growth was required to make up for time and opportunity lost during the 30-year ethnic war and make the island a middle-income country.

Other successful export economies like China, Vietnam and the Philippines were not giving subsidized power and in fact some faced lengthy power cuts, Jayasundera said.

"They are not giving power free - some are robbing power, there are six hour power cuts during the day and at night.

"But in Sri Lanka in the last few years there have been no power cuts. Power is available but at a price because we invested heavily in new power plants. We've gone for 1.2 billion dollars in investment in power generation."

Electricity prices should come down as more cheaper coal-based power plants are added.

"So exporters should not ask for special or dedicated electricity tariff for various industries - that era is over," Jayasundera said.

"Our exporters should also not think in terms of stopping all imports. You must recognize imports must be allowed."

He said if other countries adopted protectionist policies and decide not to import from Sri Lanka, exporters would lose.

"Singapore exports and imports everything but they add value. That value has a premium. We should go behind that premium like what entrepreneurial tea, rubber, cinnamon and apparel exporters have done."

Sri Lanka should also reduce reliance on its traditional tea, rubber and coconut export model and move into more value-added exports where earnings are higher, as a few exporters have succeeded in doing, Jayasundera said.

"We should never get back to the old form of tea and rubber exports. We must stop exporting bulk tea one day. We should never export any raw rubber."

Value-added exports of spices also hold much potential as much as tea and rubber, Jayasundera said.

The country has the potential to increase exports and match imports and erase the trade deficit.

Increased service export earnings would also ensure a surplus in the current account and more foreign investments will ensure a surplus in the capital account as well.

"If that happens we will have a real surplus. Then pressure will come in the opposite direction on our exchange rate," Jayasundera said, adding however that the government would not let the rate appreciate too soon in order to help exporters remain competitive.

He said exporters would have to learn and be helped to be more productive and live with a stronger rupee eventually as the country's economy grows stronger with the end of the war.

The dollar is now around 115 rupees.

"In the next three years we will not let the rate appreciate," he said. "But are we ready even for a rupee appreciation in the exchange rate? You should think of exporting at 100 rupee a dollar and anything more as a dividend."

Jayasundera also said the government has brought down inflation and made state banks reduce interest rates to help businesses by reducing the costs of borrowing.

"Exporters and everybody else are getting a good deal from (state) banks though they are not getting much praise," he said.

Sri Lankan Economy Accelerates at Fastest Pace in Five Quarters

Sri Lanka’s economy expanded at the fastest pace in five quarters as the government stepped up spending on new roads and ports after the end of a quarter- century of civil war in the country.

Gross domestic product rose 6.2 percent in the three months ended Dec. 31 from a year earlier after gaining 4.2 percent in the previous quarter, the statistics department said in a statement in Colombo today.

President Mahinda Rajapaksa, who was reelected for a six- year term in January after defeating the Tamil Tiger rebels in May, has pledged to spend $1 billion on ports, roads and power plants in 2010. Reconstruction in the $41 billion South Asian economy is boosting profit in companies including Tokyo Cement Co. Lanka Plc and Central Industries Plc.

“The infrastructure investments will have a spillover effect in the economy,” Saminda Weerasinghe, research manager at Acuity Stockbrokers Pvt. in Colombo, said before the report. “It will help even faster growth in the second half of 2010.”

Central Bank of Sri Lanka Governor Nivard Cabraal on March 18 maintained benchmark interest rates at a five-year low to boost consumer demand and drive growth to as much as 7 percent in 2010. Sri Lanka’s reverse repurchase rate is 9.75 percent and the repurchase rate is 7.5 percent.

Low Inflation

Cabraal can afford to keep borrowing costs low because of tame inflation in the country. Consumer prices in the capital, Colombo, rose 6.9 percent in February from a year earlier, almost half the average inflation rate between 2004 and 2009.

Commercial bank loans rose to 1.196 trillion rupees ($10.5 billion) in January from 1.195 trillion in December, the fourth gain in five months, according to the central bank, an indicator of growing consumer spending.

Low interest rates are also critical to support domestic demand as Sri Lanka’s exports may slow in the coming months after the European Union on Feb. 15 said it will suspend preferential trade benefits to the island nation because of human rights “shortcomings” during the war.

Sri Lankan exports rose 6.4 percent in December to $723.4 million after a yearlong decline.

Peace has prompted foreign companies, including HSBC Holdings Plc and Emirates Telecommunications Corp., to start operations in the island’s northern and eastern areas that were earlier under the control of the separatist Liberation Tigers of Tamil Eelam.

HSBC Holdings, Europe’s biggest bank, in February opened the first branch by any foreign bank in Sri Lanka’s northern Jaffna peninsula.

Start Operations

Etisalat, the United Arab Emirates’ biggest phone company, started services in Jaffna on Feb. 26 after acquiring Tigo Pvt., the Sri Lankan unit of Millicom International Cellular SA, for $155 million in October.

Demand for building roads and ports after the end of the war helped lift sales at Tokyo Cement by 79 percent in the three months ended Dec. 31.

Sri Lanka plans to invite overseas and local companies this month to set up business in a new $550 million tax-free port zone in the island’s south. The country is also seeking foreign investments to help build a new terminal in Colombo port, Sri Lanka Ports Authority Chairman Priyath Wickrarma said March 5.

Sri Lanka economy grew 3.5-pct in 2009: statistics office Mar 27, 2010 (LBO) - Sri Lanka's economy grew 3.5 percent in 2009 pushed by growth in all three major sectors of economic activity, agriculture, industry and services, the Department of Census & Statistics (DCS) said in a statement The Gross Domestic Product (GDP) growth was much slower than the six percent achieved in 2008, largely owing to the global slowdown, although the economy has been recovering in recent quarters with revenue and exports picking up.

The Central Bank has forecast economic growth of five percent this year.

The statistics office said key contributors to growth of in 2009 came from rubber, which grew 7.9 percent, vegetables which grew at 7.3 percent, fishing which expanded by 6.9 percent, mining for construction which grew 18.1 percent, hotels and restaurants which expanded 13.3 percent, and post and telecommunications at 11.7 percent.

The services sector, which accounts for almost 60 percent share of economic activity, grew 3.3 percent, industry which accounts for just over a quarter of economic activity grew 4.2 percent and agriculture, which has a 12 percent share, expanded by 3.2 percent.

The statistics office said estimated per-capita GDP at market prices (per capita income) for 2009 was 235,945 (2,053 US dollars).

The total investment rate for the year 2009 was 24.5 percent with the government investment ratio up 6.6 percent in 2009 from 6.5 percent the year before.

"The gross saving was up 23.7 percent in 2009 compared with the relatively low rate of 17.3 percent in 2008."

It has been pointed out that the economy was destroyed under the United National Party government

Minister Dalas Alahapperuma reiterates that the expectation of the Mahinda Chinthana Idiridekma to make Sri Lanka, the wonder of the Asia, is not a mere set of words. He points out that the systematic programme has already been implemented to achieve this objective. The prominent myth in the country was that Tiger terrorism could not be defeated. Another myth second only to this myth was that only the United National Party could develop the country’s economy. The Minister participating in a discussion programme of the SLBC this morning further said that the main promise given by the UNP government which came into power in 2001 was to provide a relief package to the masses within 100 days. However, this government never handed over this concession. He added that then UNP government took measures to destroy the CWE which provided relief to the masses for 20 years. The Minister recalled how the agricultural sector was fallen into the pathetic level of farmers committing suicide. There are several indexes to gauge economic growth of any country. The main index put forward by the previous UNP regime to display economic growth was the stock market. The minister also pointed out that however that it was under the present government that the Colombo Stock Exchange became the best stock market in Asia. He added that the Colombo bourse has also become the stock market with the highest growth in the world. Per capita income is another factor which points out economic growth. Sri Lanka’s per capita income for 57 years from the year 1948 was at 1,100 dollars. The Minister added that however, this figure has increased to 2014 dollars since the year 2005. The unemployment which remained at 8.3 percent in 2005 has by now fallen to 5.2 percent.

A striking growth in the transport sector has also been witnessed during the period 2005 to 2009. The CTB bus fleet has been increased from 2200 to 5,200. Not a single railway line has been constructed since the time of the western imperialists. However, by the year 2012, Sri Lankans will be able to travel to the north and to Thalaimannar by train. The railway track will be extended to Beliatta by the year 2012 under the first phase of the project to construct a railway line to Katharagama. In addition, five harbours, are being constructed and carpeted highways and flyover bridges are being built to facilitate transport

Previous governments erased country’s history - President

President Mahinda Rajapaksa yesterday said that previous governments of the country had erased the history of the country.

“History was removed from school curriculum; as a result, the present generation does not know our history. But, when someone wants to go abroad, he/she learns the history of that country and even sits for examinations too,” he said declaring open a new library in Netolpitiya.

The level of knowledge of history of our country is unbelievably low. Some pretend as if they were the patriots but in fact they represent Western countries. They appreciate and value the histories of those countries, not our own,” President Rajapaksa addressing a gathering said.

He said that the children should be taught the country’s history. He pointed out that knowledge was something that couldn’t be robbed.

“If we spend more time with newspapers, books, we do not have to go behind politicians or wait in queues. We must have good understanding about the development in the country, How to build our economy.”

“We have made our farmers stronger. We get loans to develop our country, and we use those to develop the country and not to buy food. The food needs of the people are now the responsibility of the farmers. We have provided the necessary facilities for them. All these are done for the future generations of our country. Our sons and daughters should know about what we do. For that, libraries like these can be used.”

“We must get rid of poverty right away.

“In Hambantota District, poverty has been eradicated very fast. In the same manner, other areas of the country will also be developed. We are building what your children would need in the future. When the country is being built in this manner, the development shall not be an impossible thing,” the President added.