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In the spring meetings of the International Monetary Fund (IMF) and the World Bank Group from April 8-14 in Washington D.C., various flagship reports of the IMF have been unveiled, namely, the Global Economic Outlook, the Financial Sector Stability Report, and the Fiscal Monitor. Finance Ministers and the Governors of the central banks and representatives of 189 member nations took part in this event. The IMF and the World Bank discussed policy agendas, development and institutional capacity support, with emphasis on prudent fiscal and monetary policy regime for the macro-economic stability in light of the slowdown in global growth to 3.3 percent in 2019. Pushpa Raj Acharya of the Annapurna Media Network talked to Anne-Marie Gulde, Deputy Director of Asia Pacific Department of the IMF, on how Nepal can develop a resilient economy amid the global uncertainty.

The IMF’s Asia Pacific Outlook 2019 is quite optimistic. What are the policy parameters that the IMF would like to prescribe to small economies like Nepal so that they can be more resilient? 

We project Asia to grow by 5.4 percent both in 2019 and 2020, largely unchanged from ourprojection from last October. The region continues to account for more than 60 percent of the global growth, but downside risks have increased, including faster than expected deceleration in global growth and trade, the possibility of new trade tensions, higher oil prices, and global financial market volatility.

On Nepal, we see the near-term outlook for growth as favorable, but macroeconomic and financial vulnerabilities have been building up. Growth is expected to reach 6.5 percent in FY2018/19, supported by ongoing reconstruction, investment in hydro-power projects, and strong tourism-related activity. However, fiscal and credit policies are too expansionary, leading to rising non-food inflation, widening current account deficit, falling foreign exchange reserves, and a buildup of financial sector vulnerabilities.The policy priorities are to contain rising domestic demand pressures and external imbalances and safeguard financial sector health. These policies, combined with actions to make Nepal’s economy more competitive and attractive to investment, will help deliver stronger and more sustainable medium-term growth.

The IMF has emphasized coherence of fiscal, financial and monetary policies for macro-economic and financial stability. However, as per general understanding, fiscal and monetary policies are different. Fiscal policies normally focus on growth while monetary policiesareframed to tame inflation, evaluate credit flows from financial institutions and to assess external sector stability. What sort of coherence is required among them? 

Policymakers—governments and central banks—generally share a broad set of economic objectives: healthy growth, solid job creation, and macroeconomic stability. Fiscal policy involves control over government spending and taxes, while monetary policy involves control over money supply and interest rates. These policies need to work together, but to avoid conflicts among targets it is generally accepted that the primary mandate of the central bank is price stability, which is a precondition for macroeconomic stability and growth.

For Nepal, the improved near-term outlook provides an opportunity to address vulnerabilities and deep-seated structural weaknesses.Expansionary fiscal and credit policies are exacerbating domestic and external imbalances and have led to increased financial sector risks. Policy stimulus should therefore be withdrawn in the near term, in particular by scaling backcentral government spending and tightening monetary and macroprudential policies. This would reduce domestic demand and henceease pressure on the current account. These policies, combined with actions to make Nepal’s economy more competitive and attractive to investment, will deliver stronger and more sustainable medium-term growth.

What does a slowdown in the Chinese economy mean for South Asia?

We expect a continued but gradual slowdown of China’s economic growth, given its demographic trends and the maturing of its economy. South Asia has been less integrated than other parts of Asia into value chains in manufacturing linked to China, but China is an important partner country in investment and financial relations. South Asian economies should focus on policies to sustain their growth over the medium and longer runs, taking into account global, regional and country specific developments. For all countries labor and product market reforms should continue, with a view to boosting employment, firm dynamism, and innovation, while at the same time strengthening social spending to address rising inequality and inclusion gaps. Alongside, more open trade regimes could build resilience.

Deepening trade integration among Asian countries is one major recommendation of the IMF to keep them away from major shocks. What advice would you give South Asian economies which are least integrated in the world in terms of trade and investment?

Trade openness can play a much larger role in shared prosperity. We strongly believe countries in South Asia would benefit from further reform efforts to improve the business climate, ease supply bottlenecks, and facilitate trade and investment liberalization. These would help boost the countries’ export competitiveness and increase their integration into global value chains.

Nepal aims to graduate into the league of ‘developing countries’ by 2022 and to sustainably grow above 6.5 percent compared to under 5 percent over a decade ago. What are the risks for the Nepali economy and what needs to be done in the near and medium terms?

Our growth projection of 6.5 percent for FY2018/19 reflects the authorities’ established policies. However, this elevated near-term growth will likely put substantial pressure on the domestic economy and the current account. As we note in our recent Article IV report on Nepal, it is crucial to withdraw policy stimulus in the near term to manage fiscal and external sector pressures, avoid an abrupt slowdown later, and promote a more durable economic expansion. The medium-term outlook would also be bolstered by a swift implementation of structural reforms. Last month’s successful Investment Summit was an excellent opportunity to showcase improvements in Nepal’s investment climate. Nepal should continue to advance policies to improve its business climate and put the country on a faster growth trajectory.

Will the South Asian economies be able to maintain the same momentum of growth if they do not face any major shocks? 

Asia remains the “growth engine” of the global economy, accounting for over 60 percent of global growth. The outlook for South Asian economies in particular remains broadly positive. However, downside risks have increased, including from trade deceleration, higher oil prices and global financial market volatility. To navigate these risks, macroeconomic policies should aim at stabilizing growth while ensuring sustainability and increasing resilience. Countries also need to focus on policies to sustain their growth over the longer run in the face of declining productivity growth and rapid aging. Policiescan include labor and product market reforms, strengthening social spending to address rising inequality, and efforts to open up the region's economies further to trade.

‘Digital economy’fascinates planners and policymakers everywhere. But there have been delays in developing regulatory frameworks for leveraging these innovations and technologies due to lack of capacity. How can the IMF can help member countries in capacity development in this regard?

Indeed, the digital economy promises a radical transformation of the global economy. In Asia, digital innovation has accounted for nearly one-third of its per capita growth over the past two decades. E-commerce is associated with higher firm productivity. Digitalization is helping improve both revenue collection and expenditure targeting.Neither the opportunities nor the challenges related to digitalization have yet become fully apparent. However, a reorganization of jobs and a wave of investment in physical and regulatory infrastructure will likelydetermine the productivity gains from the digital revolution.

Policy responses will need to strike the right balance between enabling digital innovation and addressing digitalization-linked risks. Policy priorities differ across Asia (and the world), as economies’ initial conditions are different. Policies to harness digital dividends include revamping education to meet the demand for more flexible skill sets and lifelong learning, as well as new training; reducing skill mismatches between workers and jobs; investing in physical and regulatory infrastructure that spurs competition and innovation; and addressing labor market and social challenges, including income redistribution and safety nets. In line with our mandate, we will continue to closely monitor these developments and foster international cooperation among different stakeholders on effective responses to developments in this area.

Head to the sixth floor of Civil Mall in Sundhara for some cool fun. Ice-skating is a recreational activity that also ensures that you burn enough calories. In the synthetic ice rink of Civil Mall, you can spend an entire day skating for just Rs 600. The cost includes necessary gear and even a trainer. It is a great way to spend time with your family and friends. So why don’t you skate your way to fitness and fun?

A home-stay in Panauti ensures quick break from the hustle and bustle of Kathmandu. Panauti, which is just an hour’s drive from Kathmandu, is a beautiful historic town with an ancient, nostalgic surroundings. One of the oldest towns in Nepal, it has many temples dating back to the 15th century or even earlier that are still intact. Visiting Panauti is an opportunity to be close to the authentic lifestyle of the Nepali people. It is also considered a great example of a well-preserved heritage site that is rarely visited by tourists! Have a fun day out visiting this Newari town!

The Matka Café can be found not just in Thapa Gaon, New Baneswor. It is ubiquitous on Twitter, where owner Prakash Pyakurel (@Jitpur) regularly tweets and communicates with his customers, and where he debates contemporary topics—even about how expensive the tea is at Matka!

 The Matka, probably the only café in Nepal with a strong Twitter presence, is also the hub for a big group of Nepali Twitterati who spend hours socializing and chatting in the cozy café. Free wifi, a separate smoking zone and good company make it an ideal place to spend one’s leisure time, or drop by for a quick bite.

 The debate over the pricing of Matka’s Rs 120 masala tea served piping hot in a hardened clay cup (matka) is just an excuse for its followers (or non-followers) to have a bit of fun, we think. The APEX food sleuths have had more expensive tea at far less appealing joints.

THE MENU

Chef’s Special:

- Milk Masala Tea

- Mutton Khaja Set

- Saadheko Mo:Mo

Opening hours: 8 am to 8 pm

Location: New Baneshwor

Cards: Not Accepted

Meal for 2: Rs 1,000

Reservations: 9851075260

Q. Who do you respect the most?

A. My parents.

Q. Could you share any of your secret tricks?

A. Practice, practice, practice.

Q. What advice would you give to other aspiring DJs?

A. Take a three-month course, at least!

Q. If you could eternal­ly be stuck in one year’s music scene, which year would it be?

A. Definitely 1998.

Q. What is one mis­take you see a lot of up-and-coming DJs making?

A. They don’t focus and just practice a lot on their set.

Q. What is something that bugs you about the DJ scene?

A. Unprofessionalism.

Q. What is one super­power you want?

A. The ability to fly.

Q. What is one track that never gets old for you no matter how many times you hear it?

A. ‘Chyangba hoi Chyang­ba, suna suna hoi Chyangba’.

Q. What is one track that got popular that you can't stand?

A. ‘Gucci Gang’.

The recently appointed 18 High Court judges have taken their oath of office. The five new judges nominated for the Supreme Court will face a parliamentary hearing in the next few days. Yet the storm of controversy the Judicial Coun­cil’s judge nominations kicked up refuses to subside. Rightly so. At stake is no less than the judiciary’s inde­pendence and impartiality.

The all-powerful Nepal Communist Party runs the federal government. Likewise, Nepali Congress is easi­ly the single biggest opposition party. Even as the two parties differ on myriad other issues, they were ready to divide the judicial nominations among themselves, making a mockery of the concept of parliamentary check and balance. The Congress likes to rail against ‘creeping authoritarianism’ of the communist govern­ment. Yet few take it seriously because on matters of mutual interest, it readily colludes with members of the same government. No wonder PM Oli so easily dis­misses the opportunistic NC leaders.

With a clear majority of political nominees, the composition of the Judicial Council that nominates high-level judges is flawed too. In its current form, it is hard to see it acting impartially and picking judges based on their qualification and competence rather than their closeness to this or that political party. A recent conference of judges rightly asked for the coun­cil’s rejigging so that those from a judicial background are in the majority.

What is happening right now is state capture by stealth, as the ruling alliance slowly tightens its grip on all levers of power. The compromised judiciary, instead of being neutral arbiters of disputes, including the con­stitution’s sole interpreter, will increasingly be behold­en to their political masters, to grave consequences for the health of Nepali democracy.

The NCP already has an absolute hold on the execu­tive and the legislative and only the judiciary seemed capable of holding it to account. But on current form we will see an increasingly pliable judiciary that has no authority besides rubberstamping the government position on vital issues. The parliamentary hearing committee can still stop this travesty of justice at the apex court. Even though the committee too is packed with members of the ruling alliance, people’s chosen representatives are expected to act in the public inter­est. Otherwise, why have such hearings at all?

Nanda Ram Jaisi | Jumla  

 It’s surrounded by tall walls with barbed wires on top. The gates are securely locked and guarded by armed police. From inside the rooms of this prison in Jumla dis­trict, all one can see is the sky above. The 84 prisoners here inhabit a different and dark world. No wonder they feel they are like birds in a cage. But ever since the launch of the ‘Books in Prison’ move­ment two months ago, the prisoners have experienced a semblance of freedom and have gotten an opportunity to learn more about the world.

This drive that started from Jumla has been launched in all prisons in Karnali province. After a library was set up in the Jumla Prison, inmates have started develop­ing a reading habit, which has helped bring about positive changes in their outlook.

Siwani Singh Tharu, a nov­elist, formally inaugurated the bibliotheca on April 6. It was followed by an interaction program where Tharu, some prisoners and a few other speakers shared their expe­riences. “The more we read, the more we want to read,” said Tharu.

 “Studying books not only makes us more informed about various topics but also helps develop positive thinking”

Dal Bahadur Karki, an inmate

Deputy Superintendent of Police Sitaram Rijal said that prisoners were becoming more disciplined and urged the inmates to cultivate a fra­ternal spirit. Chief District Offi­cer Durga Banjade requested the prisoners to be content with the services provided by the state and assured them that they would not be mis­treated in the prison.

The library in the Jumla Prison has a collection of var­ious genres of books, which means the prisoners can read the ones that interest them. The number of books is steadily growing.

Dal Bahadur Karki, an inmate, said, “Studying books not only makes us more informed about various topics but also helps develop positive thinking. We have started find­ing freedom and a whole new world in the books.”

Binod Shahi, another pris­oner, said he used to find it dif­ficult to spend his days. Now, he feels days pass quickly when he is reading a book. “Although we inmates have committed different crimes in the past, this initiative will help us emerge from our crim­inal mentality and to think positively,” said Shahi.

The government has adopted a strategy to reduce the rates of recidivism by instilling discipline and civil­ity in prisoners. Raj Bahadur Mahat, a local civic leader, argues that the future of the prisoners who develop a reading habit is bright when they complete their prison sentence. He underscored the need to take this campaign to all districts of Nepal.

On April 6, all other jails in Karnali province inaugu­rated their libraries as well. Libraries were inaugurated in the districts of Surkhet, Dailekh, Salyan, Rukum (Western), Jajarkot, Kalikot and Dolpa. Senior novelist Sanat Regmi, senior novel­ist and storyteller Nayanraj Pandey and poet Nawaraj Parajuli inaugurated the library in the Surkhet Prison. Similary, novelists Yug Pathak (pictured alongside) and Amar Neupane inaugu­rated the libraries in Kalikot and Dolpa respectively.

If you want to try thangka painting, join a class with Man Bahadur Tamang, who is a professional artist with more than a decade of experience. You can choose to have a class as short as four hours, or a longer course. The four-hour class will cost you Rs 2,700, and you will learn to make something basic; basically, you will be taught the cornerstone techniques of thangka art. Learn the significance of thangka designs and patterns in the company of other enthusiastic learners. You can even take home your own hand-painted thangka art.

To book a place, email support@ backstreetacademy.com.