POLICE FOR FIRST TIME TO MANAGE TRAFFIC WITH PROTECTIVE GOOGLES Kathmandu, 26 May: All 1,200 policemen in The Valley will for the first time henceforth manage traffic with goggles provided by Australia to protest themselves from increasing pollution. The protective goggles were handed over by Ambassador Susan Grace Friday to Metropolitan Traffic Police Division chiefDIG Ganesh Raj Rai amid a function at the Tilganga Institute of Ophthalmology. nnnn. BIMAL GURUNG ON RUN FORDEFRAUDING ARRESTED AFTER NEARLY SEVEN YEARS Kathmandu, 26 May: Bimal Gurung ,40, was arrested Friday from the capital by Central Bureau of Investigation (CBI).. Gurung is a promoter of Bhawani Multipurpose Cooperative Ltd from Min Bhawan; he was absconding since 11 July 2005 after conviction for fraud involving Rs..4.6 million. nnnn. CREDIT CONTRACTION LEADS TO ECONOMIC SLOWDOWN Kathmandu, 26 May:: Despite the rosy picture painted by government figures, the lethargic rate of credit expansion by banks is signalling that the economy is heading towards a slowdown, Dikshya Singh Writes in The Himalayan Times.. In the first three quarters of current fiscal year, the amount of credit floated by commercial banks has grown by only 11.9 per cent, according to Nepal Rastra Bank (NRB) figures. Deposits have grown by 15.8 per cent during the review period. Commercial banks have about Rs 792 billion as deposits but they have floated loans worth only Rs 589 billion in the period. Even after omitting 20 per cent of the total deposit that could not be lent to maintain regulatory Credit to Deposit Ratio, the banks still have an idle balance of around Rs 50 billion. “The presence of idle loanable funds in the financial system means that economic activities are contracting,” pointed out economist Dr Bishwambher Pyakuryal. “The credibility of our economy in the international eyes is being maintained due to the whopping Balance of Payments (BoP) surplus recorded lately but economic reality is different,” he added. In the first nine months, Nepal recorded a BoP surplus of Rs 91 billion and inflation also abated to almost the target level, says NRB data. Growth projection also estimates GDP to grow by anywhere near 4.5 per cent thanks to the bounty harvest this year. However, lack of demand for credit from the private sector despite the excess liquidity means employment generating activities are not taking place in the economy. When credit expands, consumers can borrow and spend more, and businesses can borrow and invest more. Increasing consumption and investment creates employment and expands income and profits, thus heralding a much aspired for growth in the economy. A year ago, annual credit growth rate stood at 12.1 per cent and a year ago in fiscal 2009-10, credit expanded at 16.8 per cent. The liquidity crunch had been blamed for the inability of the banks to extend more credit last year. Though the financial institutions are overwhelmed with deposits their loan flotation level is still low. “The government and the regulator have not introduced any measures to boost investor confidence or make banks offer easy access to credit,” said Dr Pyakuryal, lamenting that banks have also failed to offer competitive lending by minimising their operating profit. Another economist Dr Chiranjibi Nepal also supports that the Nepali economy is not doing well in spite of the veil of prosperity. “Our economy is being supported by the remittance sent by migrant workers from abroad and not by domestic economic activities,” he said, calling the current Nepali economy as swollen. “Our economy appears to be healthy only due to remittance and if that source dries up we will be in a really bad situation,” he pointed out. However, bankers have not yet lost heart with the current slow rate of credit expansion. “If this situation continues for some more time then only do we need to start worrying but in the current scenario there is still room for hope,” pointed out vice-president of Nepal Bankers’ Association Upendra Paudyal. “If the political situation improves and interest rates see a downward revision along with a solution to power shortage, then credit will pick up instantly,” said Paudyal, who is also CEO of NMB Bank. nnnn UML GAIN ASKS LAWMAKERS TO OBEY PARTY Kathmandu, 26 May:: With the clock ticking away and inter-party negotiations on issues of constitution writing entering a crucial and final stage, the CPN-UML has activated its powerful bodies, including the district committees to strictly instruct lawmakers to firmly stand in favor of the party´s official position, Republica reports. A district committee meeting of the party in Kavre on Friday instructed the lawmakers from the district to firmly stand by the party´s official position. The district body issued such an instruction after finding lawmaker Sheela Katila from the same district of having joined the campaign for ethnic-based federalism. Top UML leaders took strong exception to party lawmakers´ participation in the campaign for ethnic-based federalism, which is in line with the position taken by the UCPN (Maoist). "The district committee meeting today has clearly instructed party lawmakers to stand by the party decisions," UML Kavre district committee Chairman Gokul Baskota told Republica. "Party membership of lawmakers breaching the party decision will be scrapped." "How can a UML lawmaker submit an application to the UCPN (Maoist) chairman seeking action on agendas of state restructuring? Such lawmakers must make it clear which party they belong to," said Baskota. Threat of action won´t deter me: Katila However, lawmaker Katila asserted that she wouldn´t be deterred by "threat of action". Stating that she has no intention at all to go against the party´s stated policy and decisions, she urged the party leaders not to react on the lawmakers´ initiatives for the cause of their communities. "It is natural for dalits and women to raise their voices when a constitution is being written. The leaders should understand that we are not writing our party´s manifesto," she said. "I won´t budge from my conviction if the party doesn´t stand for the cause of marginalized communities." Irrational activities by leadership: Subba UML´s politburo member Prithivi Subba Gurung, who is also the head of the caucus of lawmakers representing various ethnic and indigenous communities, accused the UML leadership of resorting to irrational tactics to discourage the lawmakers from lobbying for identity-based provinces. He said the UML leaders´ activities are likely to widen intra-party rift and compel party members and lawmakers to quit the party. "The pressure tactic adopted by the party leadership will only harm the party and result in further divisions within the party," he said. "The leaders listen to the voices of oppressed communities and respond to them properly." A party leader said the decision taken by the Kavre district committee is not a case in isolation. Several lawmakers involved in the campaign have formally as well as informally been pressed to stop lobbying for identity-based federalism. Subba Gurung recently submitted a memorandum to Maoist Chairman Dahal demanding identity-based federalism. Altogether 320 lawmakers from ethnic, indigenous and Madhesi communities from various parties had signed the memorandum. Of them, 51 lawmakers were from UML alone. UML has 107 lawmakers in CA. Nnnn ________________________________________ MID-HILL HIGHWAY TOUCHES SIKKIM Kathmandu, 26 May: Under the government´s ambitious ´national pride projects´ the mid-hill highway in the eastern part of the country has now reached the Sikkim border. A track from Chyangthapu of Panchthar district in eastern Nepal linking up with Chiyabhanjhyang on the Sikkim border was completed recently, Bhim Chapagain writes in Republica from Panchthar.. With the completion of the new track the distance from Myanglung, Terathum to Chiyabhanjhyang, Sikkim is now only 200 km. People can now travel to and fro by bus between the two sides. “The track from Chyangthapu, Panchthar of eastern Nepal has been linked to Chiyabhanjhyang in Sikkim. It will benefit travelers from both Panchthar and Tehrathum headed for Sikkim,” said Shree Jabegu, an engineer involved in the project. However, he cautioned that the track might not yet be of much use during the rainy season. “Only Land Rovers might be able to negotiate the road on rainy days,” he added. According to Jabegu, the government is working to upgrade the road soon. “There is a plan to widen the track and construct retaining walls on either side. The work is already in progress,” Jagebu said. Similarly, he informed that work on construction of five bridges in the Fidim to Chiyabhanjhyag section is also ongoing. “As there are no big rivers in this section, we hope the bridges will be completed soon,” he said. Jagebu further informed that a bridge under construction on the Myaglung - Fidim section is about to be completed while work on another two bridges in the same section has just begun. “The main work for a bridge at the Tamor river is yet to be carried out. Soon a bridge will be erected there also,” he said. According to him, it was relatively easy to carry on work in the eastern region as the issue of compensation for land did not turn out to be crucial. “In other parts of the country, the problem of compensation obstructs road development. However, we face relatively little problem here. Only those who lost their houses have claimed compensation; otherwise, there was huge support from the locals,” Jagebu said. The government had allocated Rs 82 million for the construction of the eastern section of the mid-hill highway, which has been divided into three different parts. nnnn ________________________________________