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SOUTH ASIA WEEKLY REPORT
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Vol. V Issue. 48
Planned development in Nepal: Opportunities and challenges
Akanshya Shah
01 December 2012

Analysis

It is half a century that planned development began in Nepal. Although progress has been made in some important areas, the expected achievements could not be realised, mainly in ensuring stable macroeconomic growth and overall welfare of the people by raising their living standard and taking the country out of the category of 'least developed countries' under international norms.

Planned development in Nepal was initiated in the year 1956. Since then nine five-year plans and one three-year plan have been formulated. The last three-year plan expired in 2010 without meeting the basic objective of ushering an era of peace, justice, stability and prosperity for all.

The long-term vision of the Plan was to ensure socio-economic equality, justice through inclusive polity and decentralised administration within a two-decade period. To achieve the Millennium Development Goals (MDSs) by 2015, the targets set were to create dignified and gainful employment opportunities, reduce economic inequality, ensure regional balances, improve living standard of the common Nepalese by eliminating social exclusion, and reduce poverty level.

In poverty-alleviation, Nepal has scored good points. From a staggering 45 per cent population living below the poverty line since the early 1950's, the number came down to 25 per cent by July 2012. The country, led by the National Planning Commission, has now set a target of bringing the population living below the poverty line to 21 per cent through broad-based economic growth.

In addition, significant positive results were seen in meeting other MDGs. The net enrolment in primary education went up to 93.7 per cent and gender parity was achieved in enrolment in primary education. Likewise, under-5 mortality rate was reduced to 50 per 1000 live-births and infant mortality rate was down to 41 per 1000 live-births.

Likewise, maternal mortality was reduced by halved in 10 years to 229 per 100,000 live- births. The country has also achieved significantly in stopping the spread of HIV/AIDS and now aims to reverse the spread.

However, despite efforts made through planned development, there is rampant poverty, especially in Karnali region areas like Mugu, Humla, Jumla, Rukum and Jajarkot. The goal of halving population living in extreme hunger by 2015 seems impossible while the country is struggling to meet its food security goals. There are daunting challenges in ensuring gender parity in universal primary education, and the drop-out rates among the girl children is high.

Even the gains made so far are unevenly distributed among the populace. For instance, if we look at education sector and disaggregate data, we can see that the literacy rate among Dalit women, who are historically marginalised, is just 15.8 per cent against the national average women literacy rate of 35 per cent. The national average rate for men is 62.7 per cent. In the same manner, there is limited access to treatment of HIV-AIDS.

The unemployment and under-employment problem is rising and the country is suffering from brain drain. Huge labour force is leaving the country in search of better opportunities abroad, mainly to Gulf countries. One estimate shows that almost 500,00 semi-skilled and unskilled labourers from the country enter overseas job markets annually besides those who go to India taking advantage of the open- border facility.

Nepal is also a high-risk country to the effects of climate change and natural disasters. It is affected each year by devastating floods. Although the last major earthquake rocked the Himalayan nation in early 1990, it is the ninth most vulnerable country against tremors. Due to global- warming, its high Himalayas are at risk. The fast-melting glaciers from the high Himalayas pose threat to the life and property of millions. Nepal has already witnessed two major incidents of climate refugee problem in the recent past.

Over the years, the economic growth rate has lingered between three and four per cent. Nepal needs to ensure stable economic growth to meet the target of 5.5 per cent growth by 2015. Agriculture still employs the majority of the workforce in the country, and thus immediate steps need to be taken to enhance production capacity through innovative means and new technology. The immediate challenge is to deal with the energy crisis as the country faces 56 hours of load-shedding per week. It also has to ensure good governance, inclusive development and sustainable growth in the near future. It is also necessary to undertake strategies to invest in some large infrastructures such as mid-hill highways, Kathmandu-Tarai Fast Track, mega power plants etc.

However, the most immediate challenge is of political stability as without this no economic programme or policy can be prepared or implemented. The political instability and the inability of the political parties to conclude the peace process and Constitution-writing have severely hampered Nepal's development prospects. Foreign investment is lacking in major sectors like infrastructure and hydro-power development. Industry is suffering and donor-funded projects remain incomplete. The transition to an equitable and inclusive development requires political stability, which has been illusive in Nepal since 1990's.

There are opportunities for Nepal's growth mainly through development of hydro sector and expansion of market as a "bridge" between two giant economies of the world - India and China. The political class should realise this immense opportunity knocking Nepal and resolve the political tensions at the earliest for the sake of peace, development and well-being of all Nepalese people.

(The writer is an Associate Fellow at the Observer Research Foundation)

Pakistan

No end in sight to sectarian violence

Matthias Vollhardt
On November 21, Pakistan was rocked by several bomb blasts aimed at Shia places of prayer and congregation. These blasts did not occur in the remote hills of the Federally Administered Tribal areas (FATA), but in the major cities of Rawalpindi and Karachi. The attack in Rawalpindi killed 23 and wounded over 60, while those in Karachi claimed two lives.

The Tehreek-e-Taliban Pakistan immediately claimed responsibility, speaking of more violence yet to come. They also sent out death-threats via SMS to Pakistani Shia, with such unsavoury messages as "Kill, Kill Shias". Large-scale police mobilisation, blockade of streets and mosques as well as temporary shut-downs of the mobile network could not prevent the attacks.

While the occasion for this cluster attack was the 10-day mourning period of Muharram, the most important religious observances for the Shiites, sectarian violence in contemporary Pakistan needs no special inducement. According to data made available by the South Asia Terrorism Portal, the last three years especially have seen a surge in fatalities and injuries due to sectarian violence.

A tragic all time high of 509 dead in 2010 was followed by 209 in 2011 and up to 459 as of November 2012. This year has also seen the second highest number of incidents in the last ten years, with 155 occurrences of sectarian violence and still counting. According to a Human Rights Watch report, the Shia community bears the brunt of the attacks, having lost well over 300 people this year.

Shias are targeted not only at their places of prayer but on the street, while at work and on pilgrimages to Iran. On February 28, militants dressed as army officers killed 18 Shia passengers of four buses returning from Quom. Other pilgrimage convoys were attacked in June and August, leaving 15 and 16 dead, respectively. These attacks establish a pattern of violence that targets its victims especially when in transit.

Singled out in the past three years have been the members of the Hazara minority community, a Shia-majority, Persian-speaking ethnic group with roots in Afghanistan and a sizable diaspora population living in and around Quetta, the capital of Balochistan.

Of the Shias killed in 2012, over a 100 reported cases have been of Hazaras. Economically underprivileged and easily identified due to their Asian features, Hazara represent easy prey for the Pakistani and Afghani Taliban who increasingly operate in Balochistan and are traditionally anti-Shia and anti-Hazara. As they are an important part of the tribal dynamics in Afghanistan, the Hazara persecution in Pakistan gains an ethnic as well as a trans-national dimension.

In the northern region of Gilgit-Baltistan, outbursts of sectarian violence have been particularly severe this year. There, shortly after the above-mentioned February 28 attack, unidentified assailants threw a hand grenade into an Ahle-Sunnat-Wal-Jamaat (the successor to the banned anti-Shia organisation, Sipahi-e-Sihaba) procession, leading to intense sectarian clashes that claimed the lives of over 20 people and injured well over 50.

The State reaction, like all around the country, has been muted and ineffective. On invitation from the local Government, the Army tried to calm the waves, with little promise of a long-term solution. A parliamentary task force was sent to the area, and has yet to produce a report. It has been up to local Sunni and Shia clerics, who formed a Masjid board, to work towards creating harmony - a remarkable effort whose success has come into question only this Friday, when a Sunni Jamiat Ulema-e-Islam party official was shot dead.

In the metropolis of Karachi the situation - while not as bad as in 2011, when over a third of sectarian attacks were committed there - remains highly problematic, with a growing plethora of sectarian organisations now increasingly targeting each other in brutal tit-for-tat killings.

Identity discourse

Sectarian violence arguably poses the greatest threat to Pakistan today. It strikes at the heart of the unresolved question of what it means to be a Muslim - and at the same time what it means to be a Pakistani, as both are often equated with each other. It also raises the question how long a polity can sustain itself without having a society-wide and inclusive definition of citizenship and identity.

In the Eighties, military dictator Zia-ul-Haq's islamisation policies attempted to construct Pakistani identity as purely Sunni. The earlier declaration of the religious Ahmadi minority as non-Muslims under civilian Prime Minister Zulfikar Bhutto also set a dangerous precedent. Itt encouraged those who thought, and continue to think, that a similar declaration could at some point also be extended to the Shia minority. This poisonous idea has never entirely left the Pakistani identity discourse.

Currently, the emerging nexus between anti-State militants like the Tehreek-e-Taliban Pakistan and 'traditional' sectarian, anti-Shia groups like Lashkar-e-Jhangvi (to mention only the most prominent) is particularly worrying. Both have been expanding into each other's main fields of activity and cooperate while doing so. In their actions they are only marginally harassed by the security forces, operating with a large degree of impunity.

Aligned in their quest for an ultra-orthodox Deobandi Sunni theocracy, while originating from different areas and social contexts, they have found that in order to fundamentally transform Pakistan they have to both challenge the State and its societal make-up at the same time. As such, they increasingly pursue insurgent activities, both against the State and religious minorities concomitantly.

So far, hard-hitting measures against militants have really only extended to those actors actively fighting the State. There has to be a realisation that there are no "good" and "bad" extremists, there are only elements that are detrimental to this fragile democracy's short, medium and long-term well-being.

(The writer is a Research Intern at the Observer Research Foundation)

Country Reports

Nepal
Biplav in China again

As political parties are engaged in parleys for the formation of a new government in Kathmandu, CPN-Maoist leader Netra Bikram Chand ´Biplab´ is once again on a China visit.

This is Chand´s third China visit in the last seven months. According to media reports, Chand, accompanied by CPN-Maoist politburo member Hitman Shakya and former vice-commander of the now-dissolved People´s Liberation Army (PLA) left for China on November 23 and is scheduled to return to Kathmandu on December 1.

The latest China visit by Chand, who proposed CPN-Maoist General Secretary Ram Bahadur Thapa as the prime ministerial candidate, has been kept a secret. Chand is believed to have met Chinese political leaders while in Beijing.

Chand´s visit, arranged shortly after the Communist Party of China (CPC) national congress that picked Xi Jinping as China´s next president, is being viewed as a move to garner support for Thapa´s candidacy.

Chand´s China visit is meaningful also because he was on the forefront of CPN-Maoist´s anti-India agitation last month, in which vehicles bearing Indian number plates had been prevented from entering Nepal and Hindi movies were banned.

Within CPN-Maoist, Chand is known as a leader who strongly advocates another armed struggle against the state. Plans are afoot to militarise CPN-Maoist's youth wing led by Chand.

Source: myrepublica.com, November 30, 2012

President extends deadline

President Ram Baran Yadav has extended the deadline for political parties to nominate a consensus prime ministerial candidate in seven days, following demands from party leaders.

The President decided to give one more week for the purpose as politicians from the major political parties failed to pick a prime ministerial candidate within the weeklong deadline that expired on November 29.

"The President has extended the deadline till December 6 as demanded by leaders from the major political parties to nominate a consensus prime minister," said a statement issued by the President´s office. The statement cited Article 38 (1) of the Interim Constitution 2007, which states that the Prime Minister shall be elected through political consensus and the Council of Ministers shall be formed by him.

Source: ekantipur.com, nagariknews.com, November 29-30, 2012

Pakistan
Elections in May

Pakistan plans to hold landmark national elections in May, the country's Information Minister said Tuesday. The vote would mark the first time a civilian government completing a full five-year term in the country and transferred power through the ballot box.

Previous governments have either been deposed in Army coups or dismissed by Presidents allied with the generals. That history has led to fervent speculation in the past few years about whether the government would make it to the finish line this time around.

Despite repeated predictions that the Government would be forced to call early elections because of political pressure, it now appears that the ruling Pakistan People's Party (PPP) will serve out its full term, which expires in March.

Voicing concerns over possible voter -raud and lack of transparency, PTI's Imran Khan has called for Army personnel to be deployed at the election booths in order to ensure a fair voting process. The Chief Election Commissioner, retired Justice Fakhruddin G Ebrahim has already hinted earlier at sending soldiers to "sensitive" polling stations.

In the meantime, the mastermind behind Pakistan's nuclear bomb, Abdul Quadeer Khan has registered his new political party, the Tehrik-e-Tahafuzz (TTP). Running on an anti-corruption platform, his party's electoral prospects seem dim, however, despite his great popularity in Pakistan. Rohail Akbar, TTP spokesman, said the party would form an alliance with right-wing parties, but not those in Government or the main Opposition party, Pakistan Muslim League-Nawaz (PML-N).

Source: Express Tribune, November 30, 2012, The Nation, November 28, 2012

Taliban commander wounded

Maulvi Nazir Wazir, also known as Mullah Nazir, was wounded in the attack at the main market of Wana, the capital of the South Waziristan region. It was not immediately clear who was behind the attack or the extent of Nazir's wounds. The blast destroyed Nazir's vehicle, killed six people and wounded 12, said Maulana Amir Nawaz, a spokesman for Nazir.

"Nazir is a very important commander with the support of his tribe," said Mansur Khan Mahsud, the director of research at the Islamabad-based FATA Research Centre. The al Qaeda-linked Nazir is an ally of the Afghan Taliban and had signed peace accord with the Pakistani government in 2007. His group has previously clashed with other Taliban fighters during a struggle for leadership.

Tribal elders say that Nazir was more interested in attacking US forces in Afghanistan than Pakistan's security forces, a divisive issue within the Pakistani Taliban leadership. They said the Government had even asked Nazir to help expel fighters who were bent on attacking Pakistani security forces, leading to Pakistan security official referring to him as "good Taliban"

Nazir's brother Hazrat Umar was killed along with several other militants in a US drone strike in South Waziristan in October 2011

Source: Reuters, November 29), 2012

Full ties with US restored

Pakistan and the US have restored full military and intelligence ties after relations hit a low point last year, and Islamabad will take further steps to support a nascent Afghan peace process, Pakistan's foreign minister said on Wednesday.

Full cooperation between Islamabad and Washington is critical to US efforts to stabilise Afghanistan before most NATO combat troops withdraw by 2014.

"There was a fairly difficult patch and I think we've moved away from that into a positive trajectory," Pakistani Foreign Minister Hina Rabbani Khar told Reuters news agency in an interview, referring to Pakistani-US relations. "We are coming closer to developing what could be common positions. We wish to see a responsible transition in Afghanistan."

The year 2011 saw a turn for the worse in US-Pak relations. The shootings of two men by a CIA contractor, the raid on Osama bin-Laden's compound in Abbottabad and the killing of 24 Pakistani soldiers in a mistaken NATO air-raid in November that year severely strained bilateral relations. In response, Pakistan imposed restrictions on visa issuance for US officials, expelled CIA agents and military trainers and shut down supply-routes for trucks providing goods to NATO troops in Afghanistan.

Now, Khar said, relations were fully repaired, including military and intelligence contacts. Following Afghani-Pakistani peace talks last and this week, the Pakistani administration is also prioritising its relationship with the war-torn country it shares a 2,640-km long porous border with. "For us in Pakistan today, the most important capital in the world is Kabul," said Khar, because instability there could spill over into Pakistan, and fuel its own Taliban insurgency. She said the Afghan and Pakistan Governments were discussing ways to strengthen military cooperation.

Source: Reuters, November 28, 2012

Sri Lanka
Mahinda cancels Malaysia trip?

President Mahinda Rajapaksa has reportedly cancelled a scheduled visit to Malaysia, to participate in the eighth conference of the World Islamic Council at Kaula Lumpur, from December 3-6.

According to Malaysian sources, the decision follows threat of protests from local NGOs, including 15 Tamil organisations, that they would launch a country-wide agitation against the Sri Lankan President's visit, in the aftermath of accountability issues pertaining to 'Eelam War IV'.

Earlier, President Rajapaksa had faced protests, including cancellation of a Talk at the Oxford Union, UK, and also the US.

Source: Uthayan, November 27, 2012

TNA to protest 'police action'

The Tamil National Alliance (TNA) is planning a protest, condemning the alleged police attack on Jaffna University students, when they reportedly observed the annual, November 27 'LTTE Heroes Day' on the campus, and also elsewhere in the North, the following day.

According to reports, TNA parliamentarian E Saravanabhavan and the editor of a Jaffna-based Tamil daily were among those who were injured when security forces intervened to stop the Heroes' Day observances, and subsequent protests.

Three years after the conclusion of 'Eelam War IV', this year's November 27 observances turned out to be the first major 'incident' on the Jaffna University campus, once considered the hot-bed of Tamil youth politics and militancy,

Source: Uthayan, November 29, 2012

Protest against Indian fishers

Over 1,000 traditional fishermen from 117 associations affiliated to 11 federations went in a procession in Jaffna, protesting against the intrusion of Indian trawlers (from Tamil Nadu) in their seas, interfering with their occupation and destroying traditional fishing fields. They were also protesting against local fishers deploying trawlers, and threatened of mid-sea action if their demands were not met in 15 days' time.

The protestors submitted a memorandum at the Indian Consulate-General, and also at the offices of various Government departments and the political office of local Minister Douglas Devananda, in charge of Northern Province affairs in the Cabinet. Officials promised the protestors to take up their issue with the President and other senior leaders in the Government, and pointed to the bilateral nature of their problem.

Fisheries officials meanwhile said that they had arrested 12 local trawlers mid-sea this year, and courts had disposed of six of those cases already. They also warned fishers of severe action, starting with mid-sea arrests, if the latter deployed trawlers and used banned fishing net and other equipment.

A section of the Northern fishers also charged the security forces with sticking to the war-time policy of permits-based fishing and harassment if they landed back from the sea after sun-set. They also wanted the security forces to stop destroying their catch and net by indiscriminate use of sharp equipment, when they returned from the seas.

Source: Uthayan (Tamil), November 29, 2012

Afghanistan
No clarity on residual US troops

There is still no clarity on the size of the American and NATO presence and its precise configuration after 2014 in Afghanistan. Gen John Allen, the commander of US and NATO forces in Afghanistan, has made a preliminary recommendation that 6,000 to 15,000 troops should stay on.

It is being suggested that the Obama Administration favours a small deployment as it would be more acceptable to both the American and the Afghan public. One option that is being seriously considered is of keeping 10,000 US troops in Afghanistan along with several thousand NATO troops.

The troops would be restricted to providing training and support to the Afghan Army and police. This would be in addition to a small counter-terrorism force of 1,000 troops.

As the US and Afghanistan opened negotiations for a bilateral security agreement, it has become imperative for the US to take a decision on the size of its future military presence in the country.

Source: The New York Times, November 25, 2012; The Telegraph, November 26, 2012

Political collusion in bank scam

An inquiry into the $ 900-million Kabul Bank scandal found that Afghan officials missed signs of fraud and political meddling halted prosecutions. The inquiry lays bare for the first time the extent of fraud, cover-up and political collusion in a crisis that nearly crashed the national economy.

The Kabul Bank report stated that Sherkhan Farnood, the founder and chairman of the bank, was wanted by Interpol for money-laundering and illegal banking, but Afghan authorities ignored his arrest warrant for years, leaving him free to plunder his home country.

The Interpol arrest warrant came as Farnood was just starting to use bank money to build up a portfolio of luxury villas and other property in Dubai worth $151 m, and help other share-holders, friends and political connections line their own pockets. In 2007, the police in Afghanistan were also told that Farnood was wanted by the Russians for financial crimes.

More than $800 m of the stolen money went to just 12 people and seven companies connected to them. Hundreds of millions of dollars were sent abroad, some in the food trays of an airline owned by shareholders linked to the bank.

Members of Kabul's elite, including the brothers of President Hamid Karzai and Vice-President Mohammad Fahim were among the share-holders. Both have repaid money and deny any wrong-doing. Farnood and the bank's CEO, Khalilullah Ferozi, both went on trial this month for their part in the bank's collapse, but the hearings were suspended after the first week. The head of the special court said it was not clear when the trials would resume.

Source: The Guardian, November 29, 2012

Electoral registration to start soon

According to Afghan security and IT officials, the plan for the distribution of electronic ID cards is ready, but they need to wait for a proper design for the cards. The Communications and IT Minister Amirzai Sangin said that they hope to start the distribution of the cards within two months.

The electronic cards will include finger print data, eye scan and other necessary information which will avoid any kind of possible fraud.

However, it is unlikely that the distribution will completed by the time of the 2014 presidential election and is likely to reach only 80 per cent of the population.

Meanwhile, the Independent Election Commission of Afghanistan warned that without a proper registration of voters, which is due to start in April 2013 and cost around $30 million, a free and fair election is impossible.

Source: Daily Outlook Afghanistan, November 29, 2012; Tolo News, November 28, 2012

Germany gives $126 m

Germany has fulfilled part of its Tokyo Summit pledge to Afghanistan by giving it $126 million. This money is earmarked for the development projects in education, rural rehabilitation and irrigation.

According to the Afghan Finance Ministry, ?20 million will be spent on improving the education sector, ?32m on Kabul's water supply, ?5m towards rehabilitation of Faizabad in Badakhshan province and Emam Saheb of Kunduz province, and ?40m will be transferred to the Afghanistan Rehabilitation Fund.

Source: Tolo News, November 26, 2012

Bangladesh
Factory fire kills 112

In a tragic incident of factory fire more than hundred people were killed in a readymade garments factory near capital Dhaka. The fire has revealed poor safety condition of the factories. However, Government is smelling sabotage. Prime Minister Sheikh Hasina had said that the incident was a plot to impede the development momentum of the country.

The fire at Tazreen Fashions has put a spotlight on global retailers that source clothes from Bangladesh, where wage costs are low - as little as $37 a month for some workers. Rights groups have called on Western firms to sign on to a safety program in that country, the world's second-biggest clothes exporter

Source: The Daily Star, November 27, 2012; The Independent, November 29, 2012; reuters.com, November 28, 2012

Restore caretaker government or face hartal: Khaleda

Opposition Bangladesh Nationalist Party (BNP) chief Khaleda Zia this week declared a month long protest movement demanding restoration of a non-party and neutral caretaker government (CG) to conduct parliamentary election. BNP chief made the announcement during a public rally in capital Dhaka which saw presence of thousands of people. BNP chief also declared to hold a blockade on December 9 as part of party's month long protest programme.

Khaleda Zia further threatened to embark into the streets if the Awami League Government declares a state of emergency or impose curfew in the country. BNP chief all informed that her party and alliance partners want election in due time for the continuation of democracy and preventing the emergence of non-democratic forces.

Meanwhile, Prime Minister and Awami League chief Sheikh Hasina ruled out any possibility of imposing emergency. Hasina opined that as people of the country are the source of all power and her party assumed power democratically, there is no question of declaring emergency. Contrarily the accused Khaleda Zia of hatching a plot to bring emergency in the country and that is the reason for here announced anti- government movement.

Source: The Independent, November 29 & 30, 2012

Border death reduced

Prime Minister Sheikh Hasina has informed the Jatiya Sangsad (National Parliament) that after she assumed office, number of killing of Bangladeshi nationals by Indian Border Security Force (BSF) has reduced significantly. She also informed that her government is now working to bring down the number to zero.

Highlighting a comparative picture of killings of Bangladeshi nationals by the BSF, she said that a total of 95 Bangladeshis were killed in 2006 during the period of the BNP led four-party alliance government and the number was 87 in 2007 during the rule of the past military caretaker government.

On the other hand, she said that 48 Bangladeshi nationals were killed in 2011 and the number was 31 till date of the current year.

Source: www.bss.net, November 28, 2012

Offshore bidding process cleared

Prime Minister Sheikh Hasina has given final clearance to Petrobangla for setting up 12 new blocks in the shallow and deep sea for oil and gas exploration in the Bay of Bengal up for bidding.

"We've received the PM's directives in this regard, but we're set to announce the bidding round on December 16," a senior official of the energy ministry claimed. Government plans to award undisputed blocks to international oil companies (IOCs) by June 2013.

Source: The Independent, November 30, 2012

Bhutan
ADB to aid greater regional trade

The Asian Development Bank (ADB) has provided US $ 48 million to Bangladesh, Bhutan and Nepal. This aid is aimed at improving the trade among these three nations by the overhauling time-consuming, costly, and often opaque customs procedures which inhibiting intraregional trade.

The project will help the three countries to adopt an international customs administration protocol, upgrade existing automated customs management systems, and establish web-based electronic trade portals.

Despite healthy growth, it said, South Asia's low levels of intraregional trade make it one of the least integrated regions in the world.

Processing and export delivery times are more than 30 per cent slower than in East Asia and the Pacific, while administrative fees and storage and handling costs are 40 per cent more expensive, said the bank.

Source: nzweek.com, November 29, 2012

No response yet on Nepal mission

In an apparent snub, Bhutan has not responded to a long overdue proposal of Nepal to open its mission in Thimphu. This is despite the fact that the then Nepalese Prime Minister Madhav Kumar Nepal had himself formally proposed the same to his Bhutanese counterpart Jigme Y Thinley during their side-line meeting at the SAARC Summit in Thimphu on April 28-29, 2010.

By forwarding a formal letter to Thinley, Prime Minister Nepal also assured that Nepal would be happy if Bhutan reciprocates by opening its mission in Kathmandu. "Two and a half years have passed since then, but we have not received any response from the Bhutanese side," a top official at the Nepalese Ministry of Foreign Affairs (MoFA) told The Himalayan Times.

A report prepared by the MoFA early this year has proposed to open up a residential mission in Thimphu at the soonest, referring to the multiple benefits of bilateral relations and possible areas of cooperation between the two Himalayan neighbours.

Diplomatic relations between the two South Asian land-locked Himalayan neighbours have been mostly lukewarm due to the Bhutanese refugee problems since late 1980's, when ethnic Nepali-speaking people of Bhutan were forced to leave the country, for Nepal, seeking refuge.

Source: thehimalayantimes.com, November 24, 2012

Ties with Poland

The Kingdom of Bhutan and the Republic of Poland, wishing to strengthen and develop mutually-beneficial relations between their countries and peoples, have established diplomatic relations with effect from November 29, 2012.

The joint communique on the establishment of diplomatic relations was signed between Lhatu Wangchuk, Ambassador and Permanent Representative of Bhutan to the UN, and Ryszard Sarkowicz, Ambassador and Permanent Representative of the Republic of Poland to the UN, at the Polish mission at the UN.

At the signing-ceremony, the two Ambassadors expressed the interest of their Governments to cooperate closely in the bilateral and multilateral fields. In particular, they expressed the desire to further deepen the present level of cooperation between the two countries at the United Nations and at other multilateral forums.

Poland is the 48th country with which Bhutan has established diplomatic relations.

Source: bhutanobserver.bt, November 30, 2012

EU to help diversify trade

Prime Minister Lyonchhen Jigmi Y Thinley met with the Ambassador of the European Union (EU) to Bhutan, Joao Gomes Cravinho where the two discussed Bhutan-EU relations. The Ambassador said EU has been watching Bhutan with great admiration for the progress it has made. He assured that EU will remain Bhutan's strong development partner and will strengthen support in the areas of climate-change and trade diversification.

Lyonchhen thanked the Ambassador, and congratulated the European Union on receiving the Nobel Peace Prize and for promoting world peace and stability. He said that Bhutan is deeply grateful for EU's assistance and partnership in Bhutan's development. Lyonchhen spoke on Bhutan's need to diversify its relationship with the EU and how Bhutan desires to be free of donor assistance by 2020. He informed the Ambassador that the 11thPlan will be critical in achieving this goal.

Source: bhutanobserver.bt, November 30, 2012

India
Dealing with China, map for map

External Affairs Minister Salman Khurshid has said the Chinese action of depicting Arunachal Pradesh and Aksai Chin as it own territory is on that India is "not prepared to accept".

China has been showing both these areas as part of its territory in the new e-passports being issued by it with watermarks of maps. In a tit-for-tat measure, India has responded by issuing visas to Chinese nationals showing both these territories as part of a map of India.

Source: The Asian Age, November 24, 2012

Border talks on December 3-4

India and China will try to narrow differences on a proposed framework to resolve the boundary dispute, when National Security Advisor Shiv Shankar Menon will meet Chinese State Councilor Dai Bingguo for an 'informal' parley in Beijing on December 3 and 4 next.

"We are in the process of agreeing on a framework to settle the boundary and the next step, hopefully the third stage, is to actually agree on a boundary. Right now we are at the second stage," the National Security Adviser said ahead of his visit to Beijing that comes close on the heels of the row over the maps in China's new e-passports that depicted Arunachal Pradesh and Aksai Chin as parts of the communist country.

Source: www.deccanherald.com, November 26, 2012

Together on climate talks

On the first day of climate-change talks in Doha, India joined hands with China and other developing countries, including small island-States and the least developed countries (LDCs), to put rich countries on the mat for their lack of appetite to reduce greenhouse gas emissions. The influential green NGOs too joined in to demand greater commitment from the developed world.

The like-minded developing countries, a new formation of 15-20 nations anchored by India and China, said, "Our work in Doha must ensure that Annex I parties (developed countries that are part of Kyoto Protocol) take on ambitious and legally binding mitigation commitments under the Kyoto Protocol." They linked the emission reduction obligations that developed countries such as the European Union (EU) take under the protocol to future of the new post-2020 global regime slated to be negotiated by 2015.

Source: www.timesofindia.indiatimes.com, November 27, 2012

Missile-shield tested

There were some big fireworks over the Bay of Bengal on Friday afternoon when India tested its experimental ballistic missile defence (BMD) system to intercept two "incoming hostile" missiles with interceptor missiles.

Elated with the "bang-on accurate" test, the seventh time the BMD system has been tested successfully over the last six years, the Defence Research and Development Organisation (DRDO) promptly declared a missile shield could be deployed for New Delhi by 2014.

Source: The Times of India, November 24, 2012

Outlook stable: Moody's

In a big relief which was hailed by the stock markets zooming to recent new heights, rating agency Moody's on Tuesday, pegged India's credit outlook as 'stable' on account of its strong economic growth and high savings and investment rates but cautioned against the challenges of high fiscal deficit and persistent inflationary pressure facing the economy.

In its 'Credit analysis on India', Moody's pointed out that even as the country's 'Baa3' sovereign rating is supported by credit strengths-a large, diverse economy, strong GDP growth, savings and investment rates-there were numerous credit challenges which constrained the rating.

Source: The Hindu, November 28, 2012

NIB on the way

Decks have been cleared for setting up a National Investment Board (NIB) to expedite projects entailing investment of Rs 1,000 crore and more. The body will have both monitoring and approval powers; it could, however, be called the 'Cabinet Committee on Investment (CCI)' if the cabinet so prefers.

It is learnt that the Cabinet Secretariat received a Cabinet note on the proposed body from the Finance Ministry on Tuesday. The cabinet is likely to take it up shortly.

Source: The Indian Express, November 29, 2012

Maldives
Govt scraps GMR contract

The Government of President Mohammed Waheed Hassan Manik has scrapped the construction-cum-concession contract for the Ibrahim Nasir International Airport at Male, with the Indian infrastructure major, GMR Group. Serving seven days' notice for GMR to exit the airport, Attorney-General Asima Shukoor declared that the contract was ab initio void, and even the damages due to GMR would not be as much as anticipated.

GMR had contested earlier administrative pinpricks in judicial forums in Singapore, chosen in the contract for legal and arbitration relief, and a local High Court had stayed proceedings on earlier issues. The Maldivian Government however has said that it would not extend the visas of GMR employees but would ensure the safety and security of men and material.

The Indian Government that had sought to intervene in the past, said that the Maldivian counterpart should follow judicial and arbitration norms under the contract, if found faulty. Indian media also quoted officials as saying that New Delhi may be forced to 'reconsider aid-package' to Maldives, which is heavily dependent on the South Asian neighbour even for daily supplies.

Source: SunNews Online, Haveeru Online, Minivan News, November 27-30, 2012

Debt totals 82 pc of GDP

Minister of Finance Abdullah Jihad has said that Maldives could become a heavily indebted country if its debt continues to increase at the current rate. Presenting his budget summary Parliament, Jihad said that by the end of the year, external debt is estimated to be at MVR 15.1 billion, while internal debt is estimated to be at MVR16.2 billion - resulting in a total debt of MVR 31 billion, which was 82 per cent of the GDP.

Jihad highlighted that since Maldives is no longer on the list of least developed countries, it needs to be able to cover its expenses with its own income. He noted that the country follows an expensive public management system, and that half of the recurring expenses will be spent on salaries. He said that a Pay Review Board will be formed to address this problem, and stressed the importance of expediting the Bill on the state salary system.

The total budget for 2013 is MVR 16.9 billion of which 70.7 per cent will be spent on recurring expenses. Of the recurring expenses, 48 per cent will be spent on salaries. The budget shows that out of the MVR 971 million assigned as budget support, MVR 771 million is estimated to be received as foreign loans, while MVR 200 million is estimated to be received as domestic finance.

The Government estimates the debt to increase to MVR 26 billion by the end of the year. Minister Jihad cautioned that given the present situation, foreign governments and overseas agencies would refuse to extend loans and credit-lines.

The Minister however announced that the Finance Ministry is planning to establish an Offshore Financial Centre (OFC) in the country, to generate a source of revenue for the State without being overly reliant on the tourism industry.

"Offshore financing can be successfully done in small island nations like Maldives. Large banks around the globe have their interest in Maldives," Jihad said, adding that he and senior officials had visited Mauritius to study the system.

Meanwhile, reports indicated that the committed $ 25-million budget-support loan from India has been delayed after Maldives failed to complete paperwork, and not the 'GMR issue'.

Source: SunOnline, November 27, 2012, Haveeru Online, November 27, 2012, Minivan News, November 27, 2012

Myanmar
Thailand may deport 1-m workers

Around one-million Myanmarese migrant workers in Thailand could face deportation unless they complete a procedure to verify their nationality before December 14, according to Myanmarese Government and Thai media sources. Myanmar has asked for the deadline to be extended but Thailand has so far declined to do so.

Myanmar's Deputy Minister for Labour, Employment and Social Security Myint Thein met with Thai Labour Ministry's Employment Department Director-General, Prawit Khiangpol, in Bangkok and requested for an extension of the deadline for another six months, but the request was turned down.

The Thai Government has already extended the nationality verification deadline several times, most recently pushing it back from June 14 to Dec. 14.

Source: irrawaddy.org, November 28, 2012

ICG Peace Award for Thein Sein

The International Crisis Group (ICG) will present President TheinSein with the top honour at its annual In Pursuit of Peace Award Dinner in New York City on April 22, 2013. The event is deemed an opportunity to celebrate inspirational figures from government, diplomacy and public policy whose visionary leadership has transformed the lives of millions and brought forth the promise of a world free of conflict.

ICG President Louise Arbour said, "Myanmar has initiated a remarkable and unprecedented set of reforms since President TheinSein's government took over in March 2011, including freeing hundreds of political prisoners, liberalizing the press and promoting dialogue with the main opposition party."

Former Brazilian President Lula will also be honoured at the event for his work propelling his country into a new economic and political era that took millions out of poverty. "At a time when so much of the world seems to be headed in the wrong direction, Myanmar and Brazil stand out as clear examples of presidents working for a better path for their people," said ICG Chairman Thomas R. Pickering.

Source: irrawaddy.org, November 28, 2012

'No N-plan with N Korea'

Naypyidaw has denied the existence of a bilateral nuclear programme with North Korea as reports emerge that a shipment of uranium enrichment material for missile development was intercepted being transported to Myanmar through China.

The cargo of around 50 metal pipes and 15 high-specification aluminium alloy bars was seized by Japan on August 22, the Asahi Shimbun Japanese news agency said. According to the report, some of the cargo was of the high strength needed for centrifuges for a nuclear weapons program.

Myanmar's President's office said Naypyidaw will respect and obey regulations of the UN Security Council and has agreed to sign a nuclear pact. The government has also agreed to sign international agreement that will declare all nuclear facilities and materials in the country. It will also allow more scrutiny by UN nuclear inspectors.

The disputed cargo was reportedly destined for Yangoon-based construction company Soe Min Htike, which the US believes is a front for Myanmar's military procurement.

Source: irrawaddy.org, November 26, 2012

Contributors:

Afghanistan: Aryaman Bhatnagar;
Bangladesh: Dr.Joyeeta Bhattacharjee;
Bhutan and Myanmar: Sripathi Narayan;
India:Dr.Satish Misra;
Nepal: Akanshya Shah;
Maldives & Sri Lanka: N Sathiya Moorthy;
Pakistan: Matthias Vollhardt;