NATIONAL 5 (Spotlight Weekly)]

‘We Want To Create Long-Term Business Linkages’

— CHRISTIAN KONIGSFELDT

CHRISTIAN KONIGSFELDT, Head of Department of Business and Contracts at Royal Danish Ministry of Foreign Affairs, was recently in the capital to talk with Nepalese business groups and government officials on issues of private sector cooperation. Konigsfeldt spoke to KESHAB POUDEL last week about Danida Private Sector Development Program and its implications. Excerpts:

What is the Private Sector Development (PSD) Program?

PSD forms a part of the official Danish International Development assistance. This is a new private sector program which is about to be introduced in Nepal. Recognition among donor countries, international and national donor organizations as well as a dynamic entrepreneurship in the private sector is necessary pre-condition for social and economic development. No country can achieve high economic growth without dynamic private sectors. Therefore, Danish government has decided to focus on development of private sectors. Initially, PSD Program was introduced in three countries -- Ghana, Zimbabwe and India. In 1996, the program was enlarged to include another three countries -- Egypt, Uganda and Vietnam. After the thorough review of the program, we have decided to extend it to other five countries and now it covers 11 countries including Nepal and Bangladesh in South Asia. Within the Danida framework, Danish government has allocated more than USD 100 million to support the establishment of commercially based partnership between Danish companies and companies in eleven countries in Asia, Africa and Latin America.

What role does the Danish government play to bring out private companies?

Danish government cannot and does not coerce any private Danish companies to enter into cooperation with any other companies. It is, of course, up to the Danish private companies on how to engage in long term cooperation with their Nepalese counterparts. The role of the government is to facilitate and promote the idea in establishing cooperation between the two private companies.

Do you have any plans to sign agreements with Nepalese private sectors?

At this stage we are here to initiate programs and promote the concept. As an additional program in our development aid, we need the support of Nepalese government and business organizations.

How do you see the present trade status between Denmark and Nepal?

If you look at the statistics between two countries, you almost need a microscope to see it. However, official statistics only cover the exchange of capital goods. Many other trade relations between two countries are very high. One can see many Danish products around Kathmandu like Tuborg and Carlsborg. Hopefully, PSD will be conducive to increase trade relations.

What are the areas that could generate enthusiasm in the participation of Danish private sectors to invest in Nepal?

The possibility of making profit is always necessary and important to come and invest in Nepal. We have been able to introduce PSD in keeping with business principle. The population of Nepal is four times bigger than that of Denmark. There is a prospect of making big profit in Nepal. Economic foundations are limited but hopeful signs are there.

What are your observations about the private sectors in Nepal?

Our experience with the business sector in Nepal is quite limited. There are business sectors in Nepal that can cooperate with Danish business sectors.

Could you throw light on types of projects Danish private sectors would want to get involved in?

PSD program covers all sector of business. We will choose those sectors where Danish companies have expertise. In few sectors including water resources we don't have much know how. Textiles, metal works and agro-economics could be possible sectors. Our experiences have shown that there can be no single sector.

Is there any program to bring Danish private companies to Nepal?

There are different possibilities to promote match making between Danish and Nepalese companies. Prior to its implementation, partners have to be prepared for the project. First, a partner has to be identified. Then partners will have to discuss plans and ideas for possible cooperation. If the talk identifies areas of mutual interest, partners still have a lot of planning to do before the business can get off the ground.

What is the concept of the private sector program?

The concept is to facilitate between Danish private companies and their Nepalese counterparts. Such a cooperation should be of long term nature and should be mutually binding and based on commercial foundation. There should be the prospect of profit and there should also be development aspect. This is why the Danish government has decided to put money. We have a requirement that there should be developmental aspect which includes the transfer of technology, creation of new jobs in Nepal, improvement of natural and working environment, increase of Nepalese exports. One of its aim is to contribute to Nepalese economy. That is what we are trying to facilitate.

Danida is one of the largest donors to Nepal contributing to programs like democratization, human rights and natural resources development. Will PSD have any impact on ongoing programs?

PSD will not hamper any on-going program. We have long experience of running these two programs together since 1993. We have not detected any conflict between these programs. We certainly expect the same case will be true in Nepal also. For example, we have had for a number of years, Danish aid in dairy sector. We certainly hope that would be a sector where private sector development program could be engaged. PSD covers all sectors. We could go into all sectors like tourism, agro industry and information.

What do you think about the establishment of international tribunal for checking corruption?

Well, in my personal opinion, corruption is one serious problem we have to deal with. That is an issue which is very much focused in dealing with development aid. It is always a part of our annual bilateral negotiation. Our government always raises the issue of corruption in international forum where we discuss on development aid. The most important thing is that we have open discussion about corruption. I would hope that it would be sufficient to have this focus. Then, local authority have to deal with the matter. I think establishing new international institutions in dealing with corruption is not a way to control it. Corruption should be dealt at national level. Organization of European Cooperation and Development (OECD) has already adopted policies to combat corruption internationally. As a member country of OECD, Denmark definitely follows its code of conduct. According to this code of conduct, no companies within the member countries can encourage corruption. I think this is an instrument to prevent corruption at international level.

Who can participate in the PSD program?

The PSD Program is open to all lines of business and industry: production, service etc. The type of cooperation is not decisive, but support is conditional on agreements between companies being mutually binding and having a long term perspective. Within a wide-ranging framework the PSD program offers companies an opportunity to benefit from the flexibility of adaptable forms of cooperation and to make adjustments as the project develops and new needs arise. It is possible, for instance, to lead with narrowly defined production cooperation and subsequently develop the project into a joint venture, with both partners injecting share capital. Eligible companies must demonstrate they have skills and experience needed to carry out the project.

The successful institutionalization of Nepalese dairy sector is a result of Danish support. How do you see prospect of Danish private sector investment in Dairy?

Dairy sector would be a potential area where we can have cooperation between Danish and Nepalese private companies in Nepal. We already have preliminary contacts. I would not be surprised if some private companies may show their interest.

Is PSD Program a business linkage concept?

Yes, it is a business linkage concept. PSD Program makes it easier to create long-term business linkages between companies in Denmark and companies in Nepal. Through the PSD Program, funds are available to support a number of elements within. PSD is a global program.

What about the investment in the area of computer software?

That would be a good area as we have expertise. After we phased out from India we are focussing on Nepal. There is no limitation of the amount of money for the investment.

‘Nepal Should Gradually Move Toward Industrialization’

— Mr.Ken Hasegawa

Resident Representaative of Japan International Cooperation Agency (JICA) in Nepal for the last two years, KEN HASEGAWA holds wide-ranging experience in development assistance. A true frind of Nepal, HASEGAWA spoke to SPOTLIGHT about JICA program in Nepal. Excerpts :

What JICA does in Nepal ?

JICA in Nepal, as in other developing countries extends technical cooperation with the aim to transfer technology and knowledge helpful for the socio-economic development of developing countries. JICA carries out a variety of programmes in Nepal to support the nation building process . Such technical cooperation consists in training of Nepalese people in Japan, dispatch of Japanese experts, provision of equipments necessary for technology transfer, dispatch of Japan Overseas Cooperation Volunteers (JOCV), development studies of various projects (Masterplan/Feasibility etc.) survey and administration of grant, aid programmes and disaster relief.

How do you evaluate the development process of Nepal ?

I have been visiting Nepal since 1989 in various capacities. This is my 7th visit here to come to work as the Resident Representative of JICA Nepal Office. In these ten years, I have distinctly noted the increasing number of people, vehicles , and the environmental degradation . Besides, I am also surprised to see brightness at night (even neon signs around), clean cities and significant growth in the construction of new buildings which to me is also a sign of gradual development. Seeing all these and constant increase in various index related to standard of living, from the long term perspective and also by considering Nepal’s abundant natural phenomenon , the bright development prospect of Nepal can be clearly visualized.

When we see the global scenario, many nations are coming closer on one hand and on the other the clear division of some big nations in the world map can not be overlooked. In addition, Nepal sandwiched between two big neighbors has distinct reality and myth of its survival. The clear vision laid down by the constitution of Nepal should be reiterated time and again and based on this a clear vision of future development plan needs to be established. This will also enable the donors to follow the right course of support actions needed to be taken to achieve mutual goal.

Let me go a little further to answer your question if I may, I have mixed feeling on the development process of Nepal. If, I am not wrong, Nepal’s real development process can be said to have started only from the sixties. Since then , this country is struggling hard to develop in many areas. Agriculture, economic and social infrastructures and human development could be cited to be a few major areas of Nepal’s development concern of the past. Besides, lack of good governance, transparency and other factors are hindering smooth development process as are the difficult terrain and geographical constraints.

How do you see the role of donor countries ?

Donors' role is to assist the recipient countries but not to lead. Nepal should have clear development goal and vision it wants to follow. The leadership will have to be taken by none other than the Nepalese . In this respect , Japan’s policy assistance to developing countries is crystal clear. We do extend cooperation to Nepal as to other countries as per their priorities and request only.

The policy directives of Nepal have to be coherent and able to guide and coordinate donors along the line. I am delighted to see the recent initiative taken by the National Planning Commission and its Vice Chairman in this direction by organizing monthly meetings of the donors and HMG officials, which I think, will eventually lead to the right path. Such meetings and joint coordinated efforts should be able to thrash out the hurdles , misunderstanding, issues of various donors assisted projects, achieve desired progress and harmonize the relationship between the two parties.

What are the challenges for the development ?

First of all Nepal is a land — locked country. Like that of Japan , Nepal does not have much of natural resources making situation difficult for smooth and rapid economic advancement. Development has two dimensions (sides) bright and dark. We have to consider both sides when we talk of real development. As we consider the development process the dark side of it is that it tends to change and sometimes even destruct our social, spiritual and cultural aspects. Before we think of any development we may need to take stock of our valuable belongings such as cultural heritages, hospitable people and the beautiful natural surroundings which have significance not only for Nepal but to the whole world. Without getting desturbed by the speed of development and envying other countries, Nepal should try to harmonize development by maintaining the time tested cultural heritages and spiritual values fostered and handed down from generation to generation by their ancestors. You may see that a hindu temple and an old linden tree has been saved from destruction near Ratna Park during the widening of road there. May be this shows HMG’s intention to preserve such people’s heritage in the society and not pursue only the development of convenience.

How JICA has been helping Nepal ?

JICA extends its technical cooperation alongwith the human development, national development, bringing people together as the mission statement. Besides, recently, people’s participation and good governance are also recognized as very important factors for attaining effectiveness and sustainability, before and during the implementation of each programme.

2000 AD is JICA/JOCV’s 30th anniversary year in Nepal. JICA /JOCV started cooperation in Nepal initially with the assignment of 30 Japanese Overseas Cooperation Volunteers (JOCV). The number of such JOCVs serving in Nepal until present has reached 730. After their assignment in Nepal some of them have returned to work as experts and some are still associated with NGO and INGO in Nepal. In 1978, JICA Nepal Office was established to facilitate other technical cooperation activities, besides JOCV. Since then , JICA Nepal Office has carried out the administration of Japanese grant aid and implementation of technical cooperation as well. Approximately 2500 HMG/N counterpart personnel have received training in Japan. Upon return, such trainees have been dedicating their services in the development of Nepal through their respective fields.

The rational behind how JICA has been helping in Nepal is quite open. In the past years before 1992 we have always tried to cooperate with Nepal in accordance with its priority and requests made to us. And since early nineties, before the implementation of 8th five year plan of Nepal, a high level Policy Consultation Mission from Japan visited Nepal in 1992 to determine the future needs and priorities of Nepal. This Mission through policy dialogue with HMG/N concerned Ministries and high officials ascertained five main development areas and the Government of Japan has been pursuing the same strategy and policy for Nepal until the present time. The areas are:

      a)             Agricultural Development
      b)             Improvement of economic infrastructure
      c)             Social Development
      d)             Environment conservation , and
      e)             Human Resources Development

What are the potential elements of Nepal for development ?

There is no argument that Tourism can occupy a very important position. For Nepal being landlocked in nature and having no significant natural resources other options could be to opt. For industries like computer software that does not require big establishment. Considering Nepal’s-climatic advantage, it should work out a concrete and detailed export strategies and disseminate them to the mass. Nepal should take benefit of the extreme climatic conditions of its neighbors and produce agro-products and other commodities to command market and boost its product outside. Above all , there can be no denying the fact that the quality of education from Primary to Higher level will need to be enhanced as soon as possible. The enhancement of quality in education can reflect in overall development process of the country.

Is there any possibility to improve the agriculture sector ?

Surely, there exist tremendous potentialities to improve agriculture in this country.

The farmers should be able to leave the conventional farming and adopt advanced techniques. For this the dissemination of sufficient technical information should reach the remotest place and the people who can change the total scenario.

Secondly, the government should prepare necessary infrastructure like stability in the supply of agri-inputs, irrigation , improved extension , market, other technical development as prescribed by APP (Agriculture Prospective Plan). Without such long term plan in agriculture nothing will be achieved.

Thirdly, 80% of the people is said to be engaged in agriculture. Under such circumstances without gradual industrialization , it may be difficult to find a large number of consumers for the agri-products inside the country even though some seasonal and bio-diversity advantage will create in-country market to some extent. This alone will not help to achieve the desired result. Some special agro-products which deserve international market like citrus, tea and sericulture can be sufficiently recommended in the hills of Nepal.

Lastly, the commitment of the people working in the field to enhance country’s agriculture is, I think, the foremost important factor to improve agriculture sector.

How do you see the infrastructure development efforts of Nepal ?

Infrastructure is a pre-requite for development. The statistics of Nepal shows that there are still 14 districts not linked for vehicular traffic and 6 districts without electricity. It is also difficult to cover all districts/regions with necessary infrastructure at a time, but at the same time Nepal should not let big gaps exist between districts/regions in this regard. As for a transition period such gaps are inevitable and can remain but at the same time our effort should go to meet the gap as soon as possible. Without the proper balance of such fundamental pre-requisites it is difficult to attain proper and total development of the country.

We in JICA consider roads, telecom and electricity as very important economic infrastructures for development. We also consider the BHN, such as hospital, schools as other important elements to be equally important. Hence, cooperation in the improvement of such infrastructures is one of JICA’s priorities. Development of communication, electricity, roads, bridges, irrigation are some of our areas of such cooperation in the past. On- going Sindhuli-Banepa road construction is the glaring example to see at present.

JICA is also committed to promote cooperation in these fields as our priority areas in future.

Could you explain JICA’s major programmes ?

The Government of Japan under its grant aid schemes has implemented many projects. They include improvement of agriculture, construction of roads, bridges, telecommunication, hospitals, water supply system, provision of school building materials etc.,etc. Similarly JICA having the responsibility to extend technical cooperation, has helped HMG/ N in the implementation of many projects. At present the projects JICA is assisting are Community & Forestry Development , Disaster Mitigation Support Programme Project (DMSPP) second phase of DPTC, Tuberculosis and Sericulture to name a few.

Another main area of our cooperation is in the field of education. To help tackle problems in the field of education in Nepal, JICA has adopted two pronged software and hardware development strategy. On the hardware side so far government of Japan has provided printing machine for text book printing and construction of school materials. As software assistance at the secondary High school level we have dispatched teachers, at the Curriculum Development Center to assist in the development of suitable Curriculum and at the National Education Development Center (NEDC) JICA has dispatched its experts to train the teachers and the District Education Officers (DEO). At the Distance Education Project and above mentioned places JICA has sent JICA experts, Senior Volunteers and JOCVs. The expertise and experiences of JOCV’s from the schools are shared and reflected with the experts at the Curriculum Development and similarly to NECD and at Distant education and so on. The main aim is to make a coordinated effort to supplement and complement each other sectors of education.