Should antipathy be natural between government and private sector? If so, there is an impediment to them working together. However, given the trend of globalization with the market economy being in the position of commanding heights, this concept of antipathy between nation states and their private sectors will vitiate the atoms here of delivery system to our economy. Hence, the auspices of suspicion and mistrust should be discarded. Therefore, not only must governments and private sector work together but also work in a woven world where regional cooperation has become the key element in tackling sustainability and growth.

My vision of that highly motivated woven world, in which national governments and the private sector will have to perform with the strength of regional cooperation, is what I would like to place before you.

Amidst all this, the decisive new force is computers. Information technology is creating a woven world of distant encounters and instant conversations. Knowledge and information do not have to wait. Within, outside and across organizations and national boundaries people are tied together. Sharing information and points of view working in virtual teams; bartering goods and services; swapping bonds and currencies; exchanging chatter and banalities and passing the time. Information of every kind is available. A ten-year old can get access to more and better data than a senior official could have done five years earlier. Libraries are open for business on the Internet. Researchers share their results in real time. Activists bound together to promote their causes. Would be terrorists search for weapons designs. All this is increasingly heedless of the nation-state and outside the traditional structure of organizations. If the Internet is the new commanding height, it is also beyond the reach of the state. While governments can promote the Internet, they cannot control it.

The hallmark of this new globality is the mobile economy. Capital sweeps across countries at electron speed. Manufacturing and generation of services move flexibly among countries and are networked across borders. Markets are supplied from a continually shifting set of sources. Ideas, insights, techniques all disperse among countries with increasing ease. Borders - fundamental to the exercise of national power- are eroded as markets are integrated. International trade between 1989 and 1997 grew at an annual rate of 5.3% -nearly four times faster than the global output of 1.4%. Over the same years, foreign direct investment rose even faster at a rate of 11.5%. One indicator of the rapidity of change is the transformation of more and more firms into multinationals that provide the world market with goods and services that are conceived, promoted and assembled in several countries. The criterion of "national origin" has given way to "local content’, which in time is becoming harder and harder to pin down. The spread of fast, reliable information and communications technology pushes companies to draw on people and resources the world over.

As the barriers fall, private capital seeks new markets in what had once been the special preserve of state investment – energy, communications and infrastructure. And governments anxious to reduce deficits and shift spending to social needs increasingly welcome this investment. In another telling reminder of a hundred years ago, private firms are taking on an increasing share of new investment as well as responsibility for management in telecommunications, water works, power, utilities and road construction worldwide.

The integration of financial market is particularly significant. Information and communication technology has, of course, provided indicative architecture for globally connected capital markets but that is only part of the explanation. The big British privatizations in the mid 1980 were the first true global offering of equity. They changed the orientation and widened the ken of investment managers throughout the world. Not long after, European companies began to offer their shares. Increasingly, investors around the globe are using the same approach and criteria to make their decision and they are looking at the same pool of companies. The distinctions among national market have become lost. In the market of the future a few national exchanges could well become global exchanges, opening for business after the sun rises and not closing until well after dark - all in order to deal in the equity of world class companies, irrespective of their domicile. In time, shares of leading firms will be traded on a 24-hour basis.

Harold Wilson, an eminent socialist Prime Minister of Britain in the 1960s, blamed the "gnomes of Zurich" for the pound’s recurrent weakness, suggesting that a cable of a few hardheaded Swiss bankers were cynically betting against the British currency. Conspiracy theories diehard and they surfaced in our vicinity in 1997 when South-East Asia’s currencies virtually collapsed. But, in fact, today thousands and thousands of traders drive a foreign exchange market that has grown from a daily turnover of $190 billion in 1986 to an estimated $ 1.3 trillion in 1997. Analysts, brokers and strategists see the same information at the same moment and compete in their response time. Performance, whether it is a company’s quarterly earnings, a country’s inflation or trade balance data or the outcome of a national election, sets off an immediate chain reaction. And it is private capital–the pensions and accumulated retirement saving of the First World-which is being courted and lured by what used to be called the third world. But this financial integration comes with a price. National governments, whether in developed or developing countries must increasingly heed the markets vote - as harsh as this sometimes can be.

In this fast changing environment, what do we from the private sector expect our government to perform as a partner in the freewheeling marketplace?

These forces will continue to express an amalgam of aspirations and ambitions. Politics within each country will be shaped by its history, its culture and its definition of national objective - a reality that a firm can ignore only at its peril. This is not the end of the nation state and even less the end of government. If money and goods travel more freely now than at any time in the past, individual life continues to be shaped by rules, costumes incentives and constraints that are fundamentally national and political, the province of government. We still get our signals not from global financial markets (let alone cyberspace) but from the national capital.

This leaves a government with a daunting challenge: to figure ways to reduce its intervention in some areas and to retool and refocus its intervention in others while preserving the public trust. It is a challenge of imagination. It requires buying into the idea of fundamental global change and taking on the task of translating that change into politics that accord with national culture, history and temperament.

What will be the new role of government? The state must and will maintain the parameters within which the market operates, while accepting the discipline of the market. Government moves away from being producer, controller and investor, whether through state ownership or heavy-handed state regulation. In simple terms, the business of government is not to do business. Instead, government shifts towards becoming a referee, setting the rules of the game to ensure, among other things, competition.

Under these prevailing circumstances what do our national governments expect from their private sector? The most important factor obviously is greater efficiency.

Efficiency and the result of efficiency are the most evident fruits of capitalism. The market goods, better service, lower price and more reliability give us all an easier life. These fruits should more then compensate for any distortion thrown up by the system. Much of the time they do but there is a real danger that our passion for efficiency in itself creates distortions. Unless we put efficiency in perspective, we may find ourselves so busy being efficient that we forget the original purpose of the enterprise. Efficiency is not always the same as effectiveness. Therefore, for SAARC to be effective in the marketplace efficiency must be nurtured and propagated with a human face.

A distinct aspect of culture change concerns the concept of "entrepreneur". In the past the word often carried a negative connotation; it sounded unsavoury and made someone seem unreliable. To be identified as an entrepreneurial personality within an organization was to be branded as a threat to the established hierarchy. Today, in a fast-moving and more open economy, companies and governments are finding that they need to encourage and nurture entrepreneurial value and attitudes that emphasise initiative and rapid response. Otherwise they cannot keep up. They hardly want swashbuckling egomaniacs. But they need creators and builders. At a time when governments are slimming their responsibilities, companies as much as individuals will find that their responsibilities to the community have expanded. Whether that community is defined as a city, a region or something larger, the corporation is a part of it and benefits from it. Whatever the demands for obeisance at the altar of quarterly or half-yearly performance, companies will find that they have to engage with the community’s interests, environmental concerns and social issues. Otherwise, they will eventually be penalized by the political process.

Looking at the above scenario, it becomes more than obvious that the basic responsibilities of caring for the citizenry and propelling growth needs close interaction between national governments and their private sector. Their compartmentalized responsibilities have been narrowed considerably while the aspects of interface change enormously. However, their combined and complimentary responsibilities remain intact. With the didactic changes in the emphasis, how do we restore the balance within nation states and in the larger context of regional identity such as SAARC?

At the outset it is believed that less the government better the performance, both in service and manufacturing sectors. Some cynics went so far as to proclaim that India’s burgeoning IT industry took place where there was no government interference to control it. This may be true or not. But less governmental interference does make industries grow and prosper. The 1996 Trade and Transit Agreement between India and Nepal is a classic case of a "win-win" situation. Here it was the apex bodies of the concerned two countries that looked both at macro and micro levels and put before their respective governments for its recommendations to be approved and enacted. Though in the recent past some rumblings are heard on certain aspects of their arrangement, if the macro level is not vandalized the private sector of both the countries is capable of sorting out the micro level anomalies. If the present "win-win" status quo is turned into a "win and lose" situation the results will not be favourable to either side. In the long run this could also have a negative impact on the SAARC process.

I for one cannot see any conflict between the nation states and their private sectors when responsibility, authority, accountability and transparency have merged closer in the free market economy. An open approach between the two is not only possible but all the more practical, as both parties do have to carry the enormous burden of social and environmental responsibility. Today, no government and business can ignore the welfare of the community within which it must work, if it is to be successful. Both are responsible to its stockholders, workers, community and environment. What we are witnessing - the disturbances in meetings such as at WTO and IMF - are manifestations by mankind as a warning to nation states as well as MNCs and businesses that they cannot be ignored anymore. To bring about the upliftment and satisfaction of the community, it has become imperative that the government sets the parameters and tone, while the private sector contributes the required inputs for growth and sustainability without interference.

If the future of success and sustainable growth in individual countries need this suspicion–free atmosphere between the state and businesses, it is even more important that regional groups such as SAARC follow suit. There are enough skills and know-how among SAARC members, which could be shared and utilized among us for the common good of all.

The question was: what is the business community to do when the government, even after months of lobbying, cannot guarantee industrial security and rather prefers to remain a silent spectator in the face of the ever intensifying problem of safety?

Even when the question was raised before business representatives from all over the country, the FNCCI itself could not chalk out and make public any kind of policy. The government on its part has not initiated steps to implement suggestions of FNCCI regarding industrial security and safety and it has been reluctant to open up the topic for public discussions.

Finance Minister Dr. Ram Sharan Mahat, who claims to have raised the issue of industrial security when he held the position of Vice-Chairman of the National Planning Commission, now thinks that to keep a mum is the order of the day. The Planning Commission itself has not updated Mahat’s concept on industrial security, and it is anybody’s guess as to what became of it. For the moment, Dr. Mahat will be more concerned about the mid –term evaluation of the budget rather than lose his head over economic reforms and industrial security.

The government officers that were in the high –level committee formed some nine months back to look into the matter of industrial security are now not in a position to work for the same. The then Joint Secretary at the Home Ministry, Tikadatta Niraula, Joint-Secretary at the Ministry of Industries and Supplies, Chandi Shrestha, and Additional Inspector General of Police Headquarters, Tirtha Pradhan who were handed the responsibility to come out with a framework for industrial security are no more involved in the Committee. While Niraula and Shrestha have taken up positions as Regional Administrators, Pradhan has been transferred to the Criminal Investigation Department. Thus the framework of the security belt has been confined to a matter of teatime discussions.

On the other side of the picture, the members of FNCCI and the business community are now also convinced that the suggestions and recommendations forwarded by FNCCI do not hold much substance. They view that along with property and cash, also the management, staff and labourers and their families are at risk. Moreover, they think that the issue is now being politicised.

Although the government has said that it is ready to implement the suggestions and recommendations of FNCCI regarding industrial security, HMG appears quite reluctant to put into action these recommendations immediately.

Legal expert Pawan Kumar Ojha views that fear of triggering a legal dispute has prevented the government authorities from entrusting security services to the private sector.

However, contradicting this view, Khemraj Regmi, former Home Secretary who is now serving as advisor to the Home Minister, claims that all legalities have been taken care of and initiatives to involve the private sector in industrial security are under way.

Nonetheless, neither the leaders of FNCCI nor government officials have expressed satisfaction on the way the issue is being handled.

Too Many Laws Still Not Enough

From the very beginning, the legal procedures for doing business have been messy, sometimes even tortuous and patience wrenching. The government has promised one window system but in practice the windows are just too many, making the government’s commitment a farce.

Though the Company Act 2053 has brought about many changes in business and corporate sector, it was enacted in haste without making a thorough review of the modern changes. The act has a noble motive to check the insiders’ dealing in a company’s shares. But it mistakenly has barred the relatives of the company directors from buying shares, says Bharat Raj Upreti, a senior corporate lawyer. In fact, whoever has the secret information should be barred from taking undue advantage from such information, not only the relatives of the directors. For, a relative who may live far away and may be all-ignorant about his or her relatives’ involvement in the company and may not know about the secret information of the company would innocently like to buy or sell shares. But our law doesn’t allow him to do so. Besides, the laws have provisions to permit private finance in development projects such as road construction, but to facilitate that process, there is no umbrella law. As a result, those who want to privately finance the development projects face problems in receiving license and other facilities like electricity connection, royalty exemption, and so on. According to experts, anti-monopoly law, Trust Act and comprehensive law regarding Power of Attorney are urgently needed if we really want to give a fillip to the liberalization process in the country. In the absence of an anti monopoly law, particularly in the face of liberalization process that has paved the way for privatization of government owned corporations, consumers are in the risk of being exploited by owners of the monopoly businesses.

An overseas client may send some extra money for a professional’s remuneration with a provision for refund. But due to the lack of a Trust Act, tax authorities never allow a professional to retain his/her client’s money.

"If I, as a lawyer, have to face this problem, it is imaginable how the business community is coping with this," says Upreti adding, "businesses often have to borrow and that should be facilitated, not hampered by the law."

According to the experts, existing legal provision regarding the power of attorney is for very limited purpose –just for the sake of representation in the court of law. If the document of power of attorney is misused, what remedy is there? Lawyers say this is a matter of utmost concern of business community. And this provision is lacking in the existing laws. Sometimes, small things can hit the business very badly. A forged document can incur heavy loss in business. So, there should be a comprehensive law regarding who can attest a document and what punishment one has to bear in case the document is a forged one.

Dispute resolution in corporate sector is another important aspect that ensures the businessperson of how sound the legal infrastructure is in a particular country. With the liberalization policy and government’s priority to attract foreign direct investment (FDI) a number of foreign investment projects have started in this country. But the foreign investors are not satisfied with the existing provisions and procedures of dispute settlement. Foreign investors are scared of going to the court. Our judges are proficient in cases regarding land and ownership disputes but they have little exposure to commercial matters.

" Business needs prompt disposition of legal disputes but our system is not compatible to that aspiration," warns Upreti.

Same is the view of Jagadish Prasad Agrawal, an executive member of FNCCI. "Take the case of KODAK. They are now battling in the court for the certificate of origin. That case should not have gone to the court at all. Rather it should have been resolved through the process of mediation," he opines.

Few years back there was a big scandal of the misuse of foreign currency. Some company owners in the name of brief- case business firms opened up letters of credit and received huge amount of money only to use it for other purpose by submitting false import bill to the authorities concerned.

"Why did this happen," questions Agrawal. According to him, it is because most of the companies are registered as proprietorships, not as corporates. And proprietorship gives the businessperson greater leeway to manipulate things, whereas a corporate structure ensures greater discipline.

Besides, in the absence of loan recovery act, the business community has to suffer a lot. "The government is saying that it is a problem of the banks only but it is equally a matter of our concern. If a cheque is bounced back, it incurs a heavy loss to the business and legal recourse that may take years to settle can not be a viable option for us," Agrawal adds. As far as income tax and Value Added Tax –VAT- are concerned, the government departments collect the tax and also dispose the law suits filed by the business persons. "In such a case how can there be fair trial?" Agrawal questions.

As far as legal provisions regarding sound labour relation is concerned, there certainly is a labour law that envisages to deal with a whole lot of issues like the interests of the labourers and their facilities. But at the same time it has failed to comprehend the productivity aspect. "Until and unless there is satisfactory productivity, we can not talk of rights and duties alone," says corporate lawyer Sapana Pradhan Malla. In fact, the existing labour laws are far from harmonizing the interests of industrialists and workers. In the existing labour laws, the worker has the right to go on a strike but unlike in other countries where sound labour relation is maintained for years, similar right is not given to the owners here. It is because of such legal anomalies that the hotel industry is engulfed with the 10 percent service charge row. The workers have the right of strike. So they can announce the date of strike and if the management doesn’t buckle under their pressure, it is likely that the management tells the customer of its inability to provide service. In that case, the customers go somewhere else. If the workers do not go for strike on the date announced, as it happened some two years back in Himalaya Hotel, the management can take no action against the employees and has to suffer the loss. The labour laws must address this concern of the management, adds Malla. The laws have given labour office the right to mediate in case there is a friction between workers and management. But since the government officials are unskilled to settle the dispute, even trivial issues go to the labour court and both the workers and management have problem in coping with this situation.