FNCCI Trade & International Affairs Newsletter Trade & International Affairs

FNCCI Newsletter

Issue 5

FNCCI Actitivies

April 2015

4th Nepal International Trade Fair: Promotion of Nepalese Products

The Fourth Nepal International Trade Fair was held successfully on March 12-16 in Kathmandu, Nepal. A total number of 340 stalls were set up in the trade fair. There were 90 exhibitors from Bangladesh, 28 from India, 22 each from Pakistan and China, 2 from Bhutan and 1 from Malaysia. About 125,000 visitors visited the fair. The Fair was jointly organized by the FNCCI with the support from Government of Nepal, Ministry of Commerce and Supplies and Trade & Export Promotion Center. This year, Bangladesh participated as the Partner Country. India and China were the Partner Country at the

previous editions of the NITF. Inaugurating the Fair, Minister for Commerce and Supplies Sunil Bahadur Thapa stated that Government is planning to develop international standard Trade Fair and exhibition ground at Chobhar and expressed his delight that the NITF is making its mark as the prominent trade fair of Nepal. FNCCI President Pradeep Jung Pandey said that such trade fairs would help in promoting Nepalese products and help in establishing linkages with international buyers. President Pandey also reiterated FNCCI's commitment and

support to organize this fair every year and enhance its standard and quality. FNCCI has been organizing the Fair as its flagship event since 2012. The main objective of the NITF is to promote Nepalese exportable products, especially identified by the Nepal Trade Integration Strategy 2010 and establish this as a platform where buyers and sellers could meet. This year, Federation of Handicraft Association of Nepal (FHAN) and Nepal Herbs and Herbal Products Association (NEHHPA) were the coorganizers of the Fair.

Nepal and Bangladesh: Trade and Transit Issues to be Addressed Soon On the outset of the NITF 2015, FNCCI organized a business seminar on cooperation between Nepal and Bangladesh with the focus on enhancing bilateral trade and transit relation. Joint Secretary of Bangladeshi Ministry of Commerce Md. Obaidul Azam along with the visiting Bangladeshi business delegation participated in the meeting. The Bangladeshi delegation was in the capital to participate in the 4th Nepal International Trade Fair, where Bangladesh was the country partner. Welcoming the Bangladeshi delegates, FNCCI President Pradeep Jung Pandey lauded the support of Bangladeshi private sector in making the NITF successful with their active participation in the Fair every year. He further stated that such interactions among the private

sector as well as with the government officials would help in further strengthening trade and transit relation between the two countries. In the meantime, President Pandey also requested the government officials of the both countries to address issues raised by the private sector of the both countries in order to improve bilateral economic ties. The meeting discussed various issues regarding promoting bilateral trade and transit ties between Nepal and Bangladesh. Bangladesh Ambassador to Nepal Mashfee Binte Shams expressed her delight to be the Partner Country of the 4th NITF and stated that there is a huge potential of trade and investment between Nepal and Bangladesh. She further said that Bangladesh could be Nepal's one of the largest

export destination for Nepal and suggested to diversify Nepalese export basket to Bangladesh. Md. Obaidul Azam, Joint Secretary of Bangladesh Ministry of Commerce stated that Bangladesh is ready to address the concerns raised by the Nepalese private sector and also requested Nepal Government to address their concerns to further enhance trade relation between Nepal and Bangladesh. Jib Raj Koirala, Joint Secretary at Ministry of Commerce and Supplies expressed that Bangladesh has become Nepal's important trading partner of late. He also assured that the upcoming meeting between Government officials of Nepal and Bangladesh would address various issues related to trade and transit between the two countries.

German Ambassador Matthias Meyer: Stability is Imperative for German Investment to Nepal

German Ambassador Matthias Alfred Meyer met FNCCI President Pradeep Jung Pandey at the FNCCI and discussed on the contemporary economic environment of Nepal. In the meeting, President Pandey said that it is the right time for foreign investors to invest in Nepal and sought German envoy's support to invite German investors in the country.

President Pandey informed that investment climate in Nepal is improving and the recent Doing Business Report of the World Bank Group has ranked Nepal second among South Asian nations. He also informed about the commitments made by the government for investment-friendly legislations and assured FNCCI's cooperation and facilitating role to the

investors. In the meeting, Ambassador Meyer assured that his office would support Nepal and the private sector in its economic development and would convey the message to German investors through the German government. Ambassador Meyer noted that the political stability is the imperative condition to attract any investor and happy to note that Nepal is moving towards that direction. Deputy Chief of Mission of German Embassy Jacqueline Groth, FNCCI vice president Dinesh Shrestha, President of Nepal German Chamber of Commerce and Industry Senon Dorje Lama, Director General Hemant Dabadi and Senior Consultant Dharanidhar Khatiwada were present at the meeting.

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FNCCI Trade & International Affairs Newsletter

SAARC Chamber: Gearing Towards Economic Cooperation in the Region

The 62nd Executive Committee Meeting and 20th General Assembly of the SAARC Chamber was held in New Delhi on March 10, 2015 concluding with the roadmap to deepen greater economic cooperation in the South Asia Region. The meeting was organized by SAARC Chamber in cooperation with the FICCI. The meeting

decided to conduct South Investment Caucus in three phases focusing sub regional cooperation. The first caucus would be held in Pakistan focusing regional cooperation among Afghanistan, Pakistan and India. Similarly second caucus would be held in Sri Lanka focusing cooperation among India, Maldives and

KOTRA DG: Nepal has a potential for trade and investment A Korean business delegation led by the Chief Director General of Korea Trade-Investment Promotion Agency (KOTRA) Dong Seok Choi met the FNCCI office bearers and other members. The meeting focused on exploring opportunities for promoting bilateral trade and investment between Nepal and Korea. FNCCI Officiating President Pashupati Murarka gave private sector's views on the contemporary economic situation and stated that confidence of business community as well as investment environment in Nepal is improving of late, and there has been huge increment in FDI in Nepalboth from domestic and foreign investors. He further mentioned that sectors like hydropower, tourism, cement manufacturing are attracting huge investment and requested the Korean delegates to not miss the opportunity.

the objective of the visit and said that many Korean companies want to do business in Nepal. He further assured that KOTRA would cooperate with Nepalese private sector in promotion bilateral economic relations between Nepal and Korea. Korean companies based in India, like Hyosung Corporation India Pvt. Ltd., Daewoo International India Pvt. Ltd., Samsung C&T Corporation India, and POSCO E&C India Pvt.Ltd participated in the meeting. Likewise, from FNCCI, Vice President Kishore Kumar Pradhan, EC Member Gyanendra Lal Pradhan, DG Hemant Dabadi, Sr. Consultant Dharanidhar Khatiwada, IPPAN Secretary General Kumar Pandey and FCAN Secretary General Ram Sharan Deuja was present at the meeting.

KOTRA Chief Director General Choi reflected

Chinese Delegation at FNCCI China's Economic delegation led by Tang Yongshou, Deputy Director General of Department of Commerce of Tibet Autonomous Region of the China, met with the FNCCI President Pradeep Jung Pandey on 11 March 2015. The Chinese delegation was on visit of Nepal to participate in the 4th Nepal International Trade Fair. During the meeting, the issues regarding strengthening cooperation between FNCCI and Department of Commerce of Tibet AR and increasing participation of Chinese businessmen and exhibitors in the future Nepal International Trade Fairs were discussed. The Chinese side assured FNCCI of their efforts to bring more Tibetan businessmen and exhibitors to participate in the forthcoming Nepal-Tibet fair in Kathmandu, and also invited Nepalese businessmen and exhibitors to participate in the next Nepal-Tibet fair to be organized in Tibet.

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FNCCI Past President Ravi Bhakta Shrestha, Vice President Dinesh Shrestha, Senior Consultant Dharanidhar Khatiwada, and EC Members also participated in the meeting.

Sri Lanka. The third caucus would be held in Bangladesh focusing cooperation among Bangladesh, Bhutan, India and Nepal. The External Affairs State Minister of India Gen. VK Singh inaugurated the Opening Ceremony of the meeting. Minister Singh emphasized that South Asia and SAARC have an opportunity to ensure that an environment is created where industry and trade could prosper and become a powerhouse of trade and commerce in the region. He further urged the industry to develop a concrete, doable and progressive roadmap to tap the benefits of diverse sectors and resources of SAARC member states. The senior vice president of the SAARC Chamber and the immediate past president of the FNCCI Suraj Vaidya said that at the 18th SAARC Summit a realistic approach was adopted owards addressing the problems faced by SAARC member states. He further added that this year SAARC has a focused business agenda, and in November it plans to come out with a concrete document describing the challenges faced by member states and a way forward to increase intra-regional trade. A strong Nepalese delegation participated in the meeting, which include Gyanendra Lal Pradhan, Chandra Prasad Dhakal, Om Bahadur Rajbhandary, Rajendra Man Sherchan, RB Rauniar, and Rita Bhandari. The delegates also held discussion with Minister for Power Piyush Goyal, Minister for Micro, Small and Medium Enterprises Kalraj Mishra, Commerce Secretary Rajeev Kher, Canadian High Commissioner Nadir Patel and other business dignitaries.

FNCCI ink MoU with GCCHK: Collaboration for Bilateral Trade and Investment Promotion FNCCI and the General Chamber of Commerce Hong Kong decided to cooperate in promoting bilateral trade and investment relation between Nepal and Hong Kong as well as explore business opportunities in Nepal and Hong Kong for its members. A Memorandum of Understanding between the two organizations was signed on February 10, 2015. Trade representative of the FNCCI to Hong Kong Krishna Prasad Pandey facilitated in getting the MoU signed.

Earlier similar MoU was signed with HKGCC in 2004, but the cooperation remained inactive and the need was felt to revise the mutual cooperation between the two organizations. FNCCI President Pradeep Jung Pandey and HKGCC CEO Shirley Yuen signed the agreement for their respective organizations.

FNCCI Trade & International Affairs Newsletter

National Business and Economic News Nepal's Foreign Trade Performance: A Dismal Export Performance A recent report published by Nepal Rastra Bank showed a very dismal export performance in the seven months of current fiscal year. Since the start of this current fiscal year, the export, in periodic comparisons with the last fiscal year, has been in a negative zone since.

In the same period, import from China has also increased by 50.1 percent while that from India increased by 8.0 percent. Because of the rising import from China, the trade deficit with China also increased by whopping 51.5 percent. The trade deficit with India, in the meantime, only increased

by 10.7 percent, while in the same period last year, such deficit had increased by 26.0 percent. Though India is still Nepal's major trading partner, the data showed that China's share in Nepal's trade is increasing of late.

The merchandise export declined by 5.1 percent to NRs. 50.19 billion in the seven months of 2014/15. The export to India decreased by 9.5 percent while that to China, it increased by 13.7 percent.

Total Exports

50,187

-5.1

Data showed that Nepal's export to China has increased by double digit number, but the value of the export is not worth mentionable. Though Nepal's export to 'other countries' is still dominated by three products, viz, woolen carpet, readymade garments and pashmina, their growth this year, in comparison with last year's growth in the same period, have not been encouraging.

To India To China To Other Countries Total Imports

31,711 1,800 16,676 444,772

-9.5 13.7 2.5 13.3

From India From China From Other Countries Total Trade Balance

281,048 63,123 100,601 (394,585)

8.0 50.1 11.3 16.1

With India With China With Other Countries Total Foreign Trade

(249,338) (61,323) (83,925) 494,958

10.7 51.5 13.2 11.1

With India With China With Other Countries

312,759 64,923 117,276

5.9 48.8 9.9

Of late, the trade between Nepal and China has been increasing in comparison with its trade to India and 'other countries'. In the review period, Nepal's total trade with China increased by 48.8 percent while that of with India and 'other countries' just increased by 5.9 percent and 9.9 percent respectively.

Direction of Foreign Trade in FY 2014/15*

Source: Nepal Rastra Bank (*seven months)

Government brings National Employment Policy With the aim of improving employment scenario, the government has introduced National Employment Policy (NEP), 2015, replacing the Labor and Employment Policy, 2062. The Ministry of Labor and Employment (MoLE) finalized the policy, which focuses on creating more job opportunities and discourages the trend of youths flying abroad for employment. Under the new policy, a separate ´National Labor and Employment Investigation

Academy´ will be set up to constantly monitor labor and employment market of the country and provide policy advice to MoLE. It is expected that the implementation of the policy would help produce skilled manpower who can compete in the international market. Currently, almost 1,500 to 1,700 youths are leaving for foreign employment destinations due to lack of job opportunities at home. Most of them go to work as unskilled laborers.

The newly-introduced act also aims at encouraging employment-friendly investments. Also, the policy will incorporate agriculture, manufacturing, construction, tourism, informationtechnology and water-resource/energy sectors. Currently, Foreign Employment Act, 2064, and Foreign Employment Policy, 2068, are serving as tools to regularize and manage foreign employment.

Land Acquisition Policy in Place The government has introduced Land Acquisition, Resettlement and Rehabilitation Policy, paving the way for developers of various physical infrastructure projects to acquire land without affecting livelihood of people who have to be relocated from the area where such projects will be built. The policy, which calls for creation of a scientific standard for land valuation and extension of compensation

equivalent to minimum market value of land, is expected to facilitate developers to implement projects, like hydro, roads and transmission lines, on time. This will reduce chances of significant cost overrun, which inflates project cost. Also, a provision in the policy that allows the government to take action against those who try to disrupt land acquisition process or create hurdles for project developers that have acquired

land by following the due process is expected to help project developers in completing the projects on time. Currently, many developers have to wait for an extremely long time to acquire land required to build various physical infrastructure projects. At present, project developers are acquiring land to develop various physical infrastructure based on Land Acquisition Act 1977. However, the Act

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FNCCI Trade & International Affairs Newsletter does not properly address issues such as rehabilitation of people who have to be relocated from the area where projects are being built. As a result, locals launch protests to press their demands for better compensation, which delays project implementation. The policy has tried to address these complex issues so that the country can achieve its development goals without causing erosion in living standard of the people who are displaced or affected by the projects. In this regard, the policy has stressed on the need to first assess economic and social impact of the development project. Based on this, projects will be categorised as high-, medium- and lowrisk. High-risk projects refer to those which displace 50 or more households in the mountainous region, 75 or more households in the hilly region and 100 or more households in the Tarai. Medium-risk projects, on the other hand, are those that force relocation of less than 50 households in the mountainous region, less than 75 households in the hilly region and less than 100 households in the Tarai. Likewise, low-risk projects refer to

those which cause productive property to shrink by up to 10 per cent. The policy states that upon evaluation of impacts, a strategy on land acquisition and compensation must be framed for low-risk projects. But in the case of high- and medium-risk projects, a detailed resettlement and rehabilitation plan must be designed. Also, families should be entitled to compensation if works like installation of transmission, telephone and underground drinking water pipe lines affect livelihood. And in case the projects affect yields of registered commercial crop, fruit or flower producers, compensation equivalent to five years of revenue must be given in cash.

a five-member compensation committee formed under chief district officer. The committee can form a technical team to determine the compensation amount. This team should derive the compensation amount by working closely with members of families that are likely to be displaced. Those not satisfied with land acquisition, resettlement and rehabilitation processes can lodge complaints at a body formed at the project office and complaint hearing offices at district and regional levels. If verdict issued by the regional level complaint hearing office is also deemed unsatisfactory, the person can knock on the doors of appellate court, says the policy.

All expenses related to land acquisition, compensation and implementation of resettlement and rehabilitation plans should be considered as project cost, adds the policy. Also, interest should be paid on compensation amount depending on the days it took to release funds to those affected by the project. The interest calculation begins from the day a formal decision was taken to operate the project, says the policy.

(Courtesy: The Himalayan Times)

The compensation amount for those affected by the project will be fixed by

•

• • • •

Major points Creation of scientific standard for land valuation Extension of compensation equivalent to minimum market value of land Provision for action against those who try to disrupt land acquisition process Categorisation of projects based on economic and social impact assessment Relocation and rehabilitation of people affected by the project

Foreign Aid Commitment in Nepal: Optimism shown by Development Partners The latest data released by Ministry of Finance showed that foreign aid commitment has jumped by 259 per cent so far this fiscal year, an indication that development partners are optimistic about prospects of the country. In the nine months of the current fiscal year of 2014/15, the country received foreign aid commitment of Rs 252.47 billion as against Rs 70.35 billion in the same period last fiscal year. Of this commitment, Rs 126.13 billion, or 49.96 per cent of the pledged amount, was in the form of loan, while Rs 126.34 billion was in the form of grant. It is believed that one of the reasons for sharp hike in foreign aid commitment this fiscal year is successful completion of Constituent Assembly election, which was able to install an elected government. This has raised hopes for

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return of some sort of stability in the country, which gave a boost to the confidence of development partners. Yet, the government fails to make timely use of funds allotted by development partners largely due to problems such as delay in land acquisition and preparation of procurement plans, presence of weak public financial management systems and practices, delays in procurement process, and weak project planning and implementation capacity. So far this fiscal, 14 development partners of the country, including the European Union (EU), the US Agency for International Development (USAID), the World Bank (WB), the Asian Development Bank (ADB), the UK's Department for International Development (DfID), the OPEC Fund

for International Development, the International Fund for Agricultural Development (IFAD), the Saudi Fund for Development, the Japan International Cooperation Agency (JICA), and the governments of India, China, Switzerland, Norway and Finland, pledged to give away grants and soft loans of various sizes. Of these development partners, India topped the list with commitments of Rs 107.13 billion in grants and loans. The amount pledged by India is 42.43 per cent of the total foreign aid commitment received by the country so far. India is followed by the European Union with the total commitment of Rs 44.80 billion and USAID of Rs 38.60 billion.

FNCCI Trade & International Affairs Newsletter S.No 1) 2) 3) 4) 5) 6) 7) 8) 9) 10) 11) 12) 13) 14)

Developm ent Partner India European Union USAID World Bank China ADB DFID OPEC Fund Switzerland IFAD Saudi Fund Norway Finland JICA Total

Pledge Amount (In Rupees million) 107,134.70 44,800.00 38,600.00 18,235.90 12,830.60 12,097.40 5,080.00 3,049.20 2,758.00 2,510.00 2,410.00 1,830.00 867.00 272.70 252,475.50

Percent 42.43 17.74 15.29 7.22 5.08 4.79 2.01 1.21 1.09 0.99 0.95 0.72 0.34 0.11 100

Source: Ministry of Finance (between July 17, 2014 - March 17, 2015)

International Business and Economic News International Energy Agency: Emissions of carbon dioxide stalled in 2014 Preliminary data from the International Energy Agency (IEA) indicate that global emissions of carbon dioxide from the energy sector stalled in 2014, marking the first time in 40 years in which there was a halt or reduction in emissions of the greenhouse gas that was not tied to an economic downturn. "This gives me even more hope that humankind will be able to work together to combat climate change, the most important threat facing us today," said IEA Chief Economist Fatih Birol, recently named to take over from Maria van der Hoeven as the next IEA Executive Director. Global emissions of carbon dioxide stood at 32.3 billion tonnes in 2014, unchanged from the preceding year. The IEA data suggest that efforts to mitigate climate change may be having a more pronounced effect on emissions than had previously been thought. The IEA attributes the halt in emissions growth

to changing patterns of energy consumption in China and OECD countries. In China, 2014 saw greater generation of electricity from renewable sources, such as hydropower, solar and wind, and less burning of coal. In OECD economies, recent efforts to promote more sustainable growth - including greater energy efficiency and more renewable energy - are producing the desired effect of decoupling economic growth from greenhouse gas emissions. "This is both a very welcome surprise and a significant one," added Birol. "It provides much-needed momentum to negotiators preparing to forge a global climate deal in Paris in December: for the first time, greenhouse gas emissions are decoupling from economic growth." In the 40 years in which the IEA has been collecting data on carbon dioxide emissions, there have only been three times in which emissions have stood still or fallen compared

to the previous year, and all were associated with global economic weakness: the early 1980's; 1992 and 2009. In 2014, however, the global economy expanded by 3%. More details on the data and analysis will be included in an IEA special report on energy and climate that will be released on 15 June in London. The report will provide decisionmakers with analysis of national climate pledges in the context of the recent downturn in fossil fuel prices, suggest pragmatic policy measures to advance climate goals without blunting economic growth, and assess adaptation needs, including in the power sectors of China and India. "The latest data on emissions are indeed encouraging, but this is no time for complacency - and certainly not the time to use this positive news as an excuse to stall further action," said IEA Executive Director Maria van der Hoeven. (Courtesy: www.iea.org)

Boao Forum for Asia 2015: Chinese president promotes regional vision Chinese President Xi Jinping argued Saturday for strong China-led efforts to promote Asian economic and political cooperation while opening a major regional economic conference. Xi delivered the keynote address at the Boao Forum on Hainan island in the country's south, at which he lauded the promise of the Chinese economy despite slowing growth. He celebrated what he said was a multipolar world in which all countries play equal roles in regional development and security. The comment comes as China challenges U.S. leadership in Asia by promoting its own

projects such as the U.S.-shunned Asia Infrastructure Investment Bank and assertively staking territorial claims around the continent. With hundreds of regional leaders listening, Xi said Asia needed to build "a community of common destiny" that would contribute to world prosperity. "We need to make sure all countries respect one another and treat each other as equals," Xi said. "Countries may differ in size, strength, level of development, but they are all equal members of the international community with equal right to participate in international affairs."

At the same time, Xi sought to reassure leaders about the health of China's economy, which has shifted to annual economic growth levels of about 7 percent, the slowest in two decades. He said China would emphasize quality and efficiency in its economy rather than rapid expansion and will import $10 trillion in goods over the next five years. "This new normal of the Chinese economy will continue to bring more opportunities for trade growth and development for the countries of Asia and beyond," Xi said. (Courtesy: news.yahoo.com)

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FNCCI Trade & International Affairs Newsletter

ADB: Strong Growth for Developing Asia in 2015 and 2016 in the PRC as it adjusts to its new normal, less decisive action on reforms in India than anticipated, potential spillover effects on the global economy of the Greek debt crisis and the deepening recession in the Russian Federation. The impending rise in US interest rates may reverse capital flows to the region, requiring monetary responses to maintain stability. The benefits flowing from the low price of oil could evaporate if geopolitical tensions push it sharply higher. Across the subregions, economic growth in East Asia will slow to 6.5% in 2015 and 6.3% in 2016 reflecting the moderation in the PRC. The subregion grew 6.6% in 2014. Mongolia will see growth decelerate sharply in 2015 as foreign direct investment dries up and fiscal and monetary policies are tightened. Growth will be stable in Taipei,China, but accelerate in Hong Kong, China, and Republic of Korea, reflecting rising domestic demand and the improving global economy. Growth in South Asia accelerated to 6.9% in 2014 and is projected to trend higher to 7.2% in 2015 and 7.6% in 2016, reflecting the strong performance anticipated in India. Both Bangladesh and Pakistan are following through with wide-ranging economic reforms that include efforts to overcome power shortages, though political challenges may limit progress in 2015. Sri Lanka's economy is expected to moderate in 2015 as investors await clarity on the new administration's plans

22nd Southern Africa International Trade Exhibition for retail products (SAITEX) June 21-23, 2015, Johannesburg, South Africa Contact: Ms. Anina Hough Business Development and Exhibition Manager T: +27 832608131 E: [email protected]; [email protected]

TECHTRADE 2015 April 16-20, 2015, Ahmedabad, India Contact ASSOCHAM Regional Office: 608, 6th Floor, SAKAR III Opposite Old High Court Income Tax, Ahmedabad- 380014 Gujarat, India. Tel: + 91-79- 2754 1728 / 29, 2754 1867 Web: http://www.assocham.org Email: [email protected]; [email protected]

Mr. Anup Kumar Shrestha, Deputy Director Mr. Arun Shrestha, Asst. Director Mr. Bishnu Prasad Adhikari, Asst. Director Ms. Prabina Pandey, Sr. Officer Mr. Tshering Tamang, Officer

Layout & Design: Bkas @ FNCCI

Trade & International Affairs Federation of Nepalese Chambers of Commerce & Industry (FNCCI) P.O. Box 269, Teku, Kathmandu, Nepal Phone : +977-1-4262061 / 4266889 Fax : +977-1-4261022 / 4262007 Email : [email protected] Web : http://www.fncci.org

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for governance reform and economic policy. Southeast Asia is poised for a growth rebound in 2015 after subregional growth fell to 4.4% in 2014. Aggregate growth is seen rebounding to 4.9% in 2015 and 5.3% in 2016 as recovery in Indonesia and Thailand leads the way, and with most of the subregion expected to benefit from rising exports and lower inflation. Weak oil prices and recession in the Russian Federation pushed subregional growth in Central Asia down 1.5 percentage points to 5.1% in 2014. In 2015 growth will slacken in Kazakhstan, Turkmenistan, and Uzbekistan as lower petroleum exports constrain domestic spending. The weak economy in the Russian Federation will curb export and remittance flows, slowing growth in Armenia, Georgia, the Kyrgyz Republic, and Tajikistan. Average growth in the subregion is forecast at 3.5% in 2015 and 4.5% in 2016. GDP growth in the Pacific reached 6.1% in 2014, accelerating for the first time in 3 years as natural gas exports began in Papua New Guinea (PNG), the subregion's largest economy, and expansion picked up in most other economies. In 2015, the first full year of gas production in PNG, growth in the Pacific is expected to peak at 10.7% before falling back to 4.5% in 2016, with only a few economies growing faster than in the previous year. (Courtesy: ADB)

UPCOMING EVENTS

Divisional Staffs

A new Asian Development Bank Report said that developing Asia will maintain its strong economic growth in 2015 and 2016 supported by soft commodity prices and recovery in the major industrial economies. ADB's flagship annual economic publication, Asian Development Outlook 2015 forecasts developing Asia will achieve gross domestic product (GDP) growth of 6.3% in both 2015 and 2016. The region also grew 6.3% in 2014. From the trough of the global financial crisis in 2009, developing Asia has contributed 2.3 percentage points to global GDP growth-nearly 60% of the world's annual 4.0% pace. Eight economies in the region posted growth exceeding 7.0% in nearly every year of the post-crisis period, including the People's Republic of China (PRC), the Lao People's Democratic Republic, and Sri Lanka. Growth in the United States (US), where recovery seems to have turned a corner, is leading major industrial economies. While signs are mixed in the euro area and Japan, soft oil prices and accommodative monetary policy will support growth. As a group, these economies are forecast to expand by 2.2% in 2015, up 0.6 percentage points from 2014, and 2.4% in 2016. With improving external demand for the region's outputs, an expected pickup in India and in most members of the Association of Southeast Asian Nations (ASEAN), could help balance gradual deceleration in the PRC, the region's largest economy. Growth slowed in the PRC in 2014 on weak fixed asset investment, particularly in real estate. As the government proceeds with its structural reform agenda, further slowing of investment is expected to diminish growth to 7.2% in 2015 and 7.0% in 2016. This is a much more moderate rate than the average growth of 8.5% in the period since the global financial crisis. India is forecast to overtake the PRC in terms of growth as the initial phase of government efforts to remove structural bottlenecks is lifting investor confidence. With the support of stronger external demand, India is set to expand by 7.8% in FY2015 (ending 31 March 2016), a sharp rise from 7.4% growth in FY2014. This momentum is expected to build to 8.2% growth in FY2016, aided by expected easing of monetary policy and a pickup in capital expenditure. Risks to the outlook include possible missteps