Why India and Nepal Rank Low in Economic Freedom Index

Why India and Nepal Rank Low in Economic Freedom Index

Posted by: on Dec 10, 2012 | 6 Comments

On the face of it, economic freedom is a simple concept. However, it encompasses every aspect of an individual’s life. Economic freedom defines the standard of living and has a significant influence on the quality of life.

The History and Modern Forms of Baccarat

Posted by: on Nov 29, 2012 | No Comments

Which is the game whose dealings end up influencing the annual turnovers of major casinos across the globe? Which game is the favourite of the ‘high rollers’ or the casino’s crème de la crème? It is the game that was once a penchant for the French royalty and has been shown in most of the Bond movies. Yes, ladies and gentlemen, it is Baccarat.

Some of the Best Casinos Across the Globe – Part II

Posted by: on Nov 8, 2012 | 3 Comments

Casino gaming has a long and eventful history. The industry stops for breath once in a while, but its contribution to the inflow of tourists and foreign currency as well as tax revenues cannot be overlooked. Yes, it is continuously in the spotlight of government regulations, but an increasing number of countries are embracing the opportunities the casino industry has to offer.

More recently, Macau has become the epicenter of the global casino industry. However, visiting Las Vegas still remains the dream for most casino lovers. The EMEA (Europe, the Middle East and Africa) region also has its share of magnificent and exciting casinos.

In my previous article, which you can read here, I covered some of the best casinos in the Eastern part of the world. Here, I have described some of the most exciting casinos in Las Vegas and the EMEA region. There is also one casino from Nepal that finds a mention in this article.

Some of the Best Casinos Across the Globe

Some of the Best Casinos Across the Globe

Posted by: on Oct 30, 2012 | One Comment

Prior to the worldwide economic downturn, the global casino industry was surging ahead, seemingly unstoppable. Growth records were set between 2004 and 2008, with gross gaming revenues jumping 24% during these four years to US$358.0 billion.

Are the Ministries Gambling with Nepal’s Future?

Posted by: on Oct 8, 2012 | 3 Comments

Nepal’s Tourism Ministry, which had backed allowing Nepalese citizens to enter local casinos sometime back, has taken a summersault and back tracked completely. So much so that the ministry now seeks to put a ban on the entry of Nepalis into casinos, as stated in a draft released by the Ministry of Culture, Tourism and Civil Aviation (MoCTCA).

What Lies Between Nepal and Economic Growth?

Posted by: on Oct 5, 2012 | 28 Comments

Nepal is among the poorest nations in the world. It ranks 157 out of 187 countries on the Human Development Index, with approximately 25% of its population living below the poverty line. According a World Bank report, the country’s per capita income is about $750. Nepal is also among the least developed nations, as 75% of its population is dependent on agriculture. Despite agriculture providing employment to many, it contributes only about 30% of the country’s GDP.

What’s the Problem?

So, what impedes Nepal’s progress? The country is completely landlocked and is prone to natural disasters. At the same time, Nepal does have the potential to emerge from the chains of poverty. The nation has among the world’s largest untapped hydropower, estimated at 83,000 MW, according to a World Bank report. And its neighbours, India and China, being among the world’s fastest-growing economies, can prove to be huge markets for Nepal’s potential hydropower. Moreover, the tourism industry can do wonders for the country. So the greatest factor hampering the economy is not one unleashed by nature. It is political instability. This backdrop dissuades foreign investments, which could have propelled the economy.

According to International Financial Corporation’s Doing Business rank, Nepal’s status has improved from 110 in 2011 to 107 in 2012. However, this is still very a very low rank for how conducive the Nepalese environment is for doing business. The country has been plagued by political instability for over two decades. During the course of this time, Nepal has witnessed the rise and fall of 20 governments. One step in the positive direction was the declaration of a federal republic. This has experienced a setback, however, with the failure of the Constituent Assembly to concretize the new constitution. With political instability being an inherent feature of Nepal’s economy since 1990, it is not progress but progressive erosion that the nation has been facing.

Where is it Headed?

Nepal’s economy is expected to grow at 4.6% in 2012, with the growth rate likely to be around 5.2% over the forthcoming three years, according to Nepal Economic Outlook 2012, published by the Institute for Integrated Development Studies (IIDS) in June.

For Nepal to accelerate its growth, it needs to focus on the right things. The recent turmoil in the casino industry is an example. It is now illegal to allow Nepal’s citizens to enter the eight casinos in the capital city of Kathmandu. Authorities are cracking down on casinos permitting locals to gamble. Rather than investing so much muscle power into curbing the industry, the government should be seriously considering how to revive it and garner some of the momentum being witnessed in the gambling industry in Macau and Singapore.

If Nepal continues being prudent with fiscal management and focuses on investments into infrastructure and creating a political environment that is supportive for businesses, the country can achieve significant growth in the upcoming years.

 

Gambler’s Paradise: Top Casinos You Can Bet Your Money On

Posted by: on Jun 18, 2012 | No Comments

The thrill of legal gambling is known only to a select few. Moreover, a lot depends on the atmosphere of the casino, as it takes gamblers to an exalted state of mind. I will tell you about the top three casinos of the world that you definitely cannot afford to give a miss in this lifetime.

What is the Reason for Nepal’s Poverty?

Posted by: on Nov 4, 2011 | 5 Comments

Nepal is among the world’s poorest countries. Poverty in this small nation is not only persistent, but is widespread. According to the 2010 Nepal Living Standards Survey, conducted by the Central Bureau of Statistics and the World Bank, 25.2% of the country’s population lives below the poverty line.

Moreover, the World Bank reported that everyone in Nepal, leaving a handful of professionals, businessman and large farmers, is poor. Today, more than 9 million people in the country are projected to be living on an income of less than $1 a day.

 

Why is Nepal Shackled by Poverty?

 

Low agricultural productivity is one of the principal reasons for Nepal’s financial weakness. The nation’s economy relies heavily on agricultural activities, which employ approximately 80 percent of the country’s labor force. It is estimated that the over-dependence on agriculture has prevailed despite a decrease in the consumption levels. Production of chief food grains in the country has increased only marginally in the last two decades.
If Nepal has to progress it must see a rapid exodus of Nepalese citizens from agriculture to industries and services. Before 1800 the US also had an overwhelming percentage of it’s population in agriculture. Today less than 30% of the people of US are employed on farms and supply grains and other produce to many parts of the world. The government allowed industry to thrive with business friendly policies. Nepal must do likewise.
Some other reasons for Nepal’s dismal economic state are:
Inadequate infrastructural facilities: People in Nepal, particularly those who live in rural areas, suffer from sub-standard and inefficient health services. The cost of medical treatment in the country is also fairly high. The public expenditure in education is very low and wasted. Finally, there is limited accessibility to basic infrastructure like roads. As a result, people living in the remote areas in the mountain districts struggle to gain economic independence. The government has neither the resources nor the expertise to develop infrastructure. It should allow private sector – domestic and international to fill this gap.
The economic situation in Nepal is unlikely to show progress without government policies that are ‘pro-business’. There is also a serious need for the government to create sufficient employment opportunities, which is only possible by encouraging new industries to flourish in the country. How does it encourage industry? Eliminate curbs on foreign investment, end the income tax. Lower taxes on imports and production and free the trade in goods and foreign exchange.

Indian Casino Industry: Can it compete with Nepal?

Posted by: on Oct 20, 2011 | One Comment

Nepal has emerged as one of “THE” casino hot-spots during the last decade. In fact, this South Asian country is home to the region’s oldest casino industry. The first casino in Asia was established as far back as 1968 in Nepal. ‘Casino Nepal’ was owned by King Mahendra’s younger brother. During that time, the casino was only accessible to foreigners. This is because the government was afraid that the Nepalese citizens could lose all their earnings if they were allowed to indulge in the casino.

While Nepal has moved on to become a secular republic, having a federal government, it is still not very “welcoming” to the whole idea of casinos. The casinos continue to be off-limits for locals. A Nepali caught gambling illegally or even participating in a legal casino can be fined heftily in case of a first offence. In case of a second or third offence, the guilty could have to serve a prison term of as much a whole year.

However, more than four decades after Casino Nepal steered the casino industry in the nation, several changes have shaken up the spirit of the gambling business in-and-around the region. The country’s capital, Kathmandu, has eight casinos that are open 24-hours. Today, the casino industry is among the top revenue generators in the Nepalese economy.
This brings us to the question; can the Indian casino industry compete with Nepal?

The Indian Wave Rises

At present, casinos are considered legal only in the states of Sikkim and Goa. However, the union territory of Daman is all set to get a piece of the action soon. Sikkim is host to one casino, while Goa has 12- of which five are floating and seven are land-based (in five-star hotels). All the casinos offer standard games, such as Baccarat, Blackjack, Roulette, Poker and Pontoon. The chips need not necessarily be bought with Indian Rupee. Most of these casinos are extremely high-end, and accept common western currencies like the US Dollar, Euro and UK Pound.

A recent industry report stated that- while the casino industry in regions like Philippines, Singapore and Macau are expanding at an annual rate of 30 to 40 percent, the revenue from casinos in Goa is growing at a much impressive rate of 50 percent per annum. Clearly, the Indian casino industry has made its mark in the terrain. Although it might have started out late, it seems to be making up for its tardiness nonetheless.

>13% – Russia’s tax on income

Posted by: on Aug 15, 2006 | No Comments

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America is a haven for capitalists while Russia is a workers paradise. US glorifies profits, Russia vilifies it. This was the conventional wisdom. It has been turned on its head. Bush fought a bruising battle in the US Congress to marginally reduce taxes. Vladimir Putin, the Russian President, did it with ease.

Jan 1, 2001 was the beginning of a new era in Russia. Russians woke up to a flat 13 percent income tax. It was a watershed event. That’s right; it is Russia that we are talking about, not Hong Kong or Singapore. The USSR was founded on the principle that all businessmen were evil and profits were passe – a bourgeois concept.

Now, businessmen can retain 87 percent of what they earn in the land of Lenin! This is something which I would not have dreamed of 10 years ago. Truth is stranger than fiction.

What is surprising is that Russia had just three tax rates of 12, 20 and 30 percent prior to this reduction. The rates were high but comparable with what most countries charge, and, yet, Putin chopped them.

What has been the result of this relatively low tax rate? It has been an unprecedented success for Russia. It has contributed to Russia’s stability which was so lacking in the aftermath of the collapse of communism. The benefits to the Russian economy grow by the day.

Capital flight has stopped and foreign investors have started returning to Russia. This, inspite of the huge losses incurred by the dollar investors resulting from a complete collapse of the ruble in the 1990’s.

Hoover Institution scholar Alvin Rabushka observed in a February 21, 2002 analysis for www.russiaeconomy.org, “the 13 percent flat tax has exceeded the expectations of the government in terms of revenue. For the vast majority of taxpayers, its implementation is simple, and no forms need to be filed.” Adjusting for currency fluctuations, Rabushka adds, “real ruble revenues increased about 28 percent.”

This novel experiment is paying huge dividends for the Russian government by inculcating the habit of paying taxes in people who were used to a culture of evasion. This changed attitude was to be expected; after all, evasion too comes at a cost – black money is difficult to reinvest in business and peace of mind is lost. People, therefore, do pay up when rates are not extortionate.

Russian tax revenue which barely equaled nine percent of its Gross Domestic Product (GDP) has grown to 16 percent. Russia also grew by 5% in 2001. A win-win situation for all concerned. Taxpayers are smiling, Putin has become a hero of the ‘Union of World’s Taxpayers’, and Russia’s government is busy collecting a windfall.

The US meanwhile has six tax rates from 10 to a high of 38.6 percent. Its 46,900-page Tax Code provides elephant size loopholes to the wealthy while the middle classes pay up. Russians file a simple one page form.

It is estimated that tax accountants will gobble up over 150 billion dollars for the paperwork which accompanies the tax payment in the US. This burden is one of the reasons why the US economy will not average even half the growth rate accomplished by Putin’s Russia.

It is ironic that Russia has a 13 percent flat tax while the bastion of world’s capitalism cannot even bring in a flat 17 percent tax. This is what Steve Forbes, a republican contender for the US presidency, had wanted but could not achieve.

Clearly, Russia has more to do if it wants to prosper. Rule of law, freedom of speech and, especially, far stronger property rights are surely needed. The 13 percent income tax is however a very powerful step in the right direction.

Nepal, to make an impact, must abolish the income tax. To do so would signal to the world’s business community, ‘invest here; Russia may have larger markets but in Nepal you need no tax experts and pay no income tax.’

With the abolition of the income tax, foreign and domestic investment would boom and trade would virtually explode. Any loss in revenue would be more than made up by higher VAT realizations by the government.

 

The Boss