NATIONAL 4 - (Spotlight Weekly)

"The End Result Of Liberalization Policy Is Not Encouraging"

— Sabin Lal Shrestha

Sabin Lal Shrestha, the nephew of renowned industrialist Ram Lal Shrestha and the son of Padma Lal Shrestha, is working hard to expand his family's business empire that ranges from travel trade, construction, banking, manufacturing, trading and information technology. The Executive Director of Highland Distillery, Shrestha, 30, spoke to SPOTLIGHT on various issues of business and economy of the country. Excerpts :

How do you evaluate overall economic situation of the country?

It is very easy to be critical and blame all others for things not happening as it should have happened. What I feel important is, rather than saying whether the economic situation is better or worse than before, we should be seriously debating and decisively acting on whether it is moving towards a visionary goal and a right direction or not. The real real economic situation of our country could easily judged by the over all economic condition and living standard of the mass population (not of a small section). Definitely, the economic indicators reflect progress in some areas to some extent than before, but this is not at all satisfactory. Histories tell us that at times figures could really be deceiving and misleading. For a country to be economically good in real sense, wealth, I mean opportunities to create wealth should be properly distributed among the population through national policies and activities, which is not the case in ours. We are learning by mistakes, which are not fast enough, and the mistakes are proving to be rather costly. Therefore, if we fail to take immediate corrective measures and creative actions, we would be really left behind in the world, would be ashamed of calling our self as a Nepali. There cannot be a formula, which is successful in one country that can be applied in its entirety in another country. I tend to believe it is in the hands of politicians to bring about rapid changes in the country like ours for good with the aid of strong bureaucracy and sincere entrepreneurs. There have been certain efforts towards making Nepal more conducive to foreign investments but lack of commitment and sincerity in implementing such policies have resulted in very limited or nonexistent success. Smuggling and gray market because of their multiple poisoning effects is really hampering our economy beyond anyone's imagination. Economically strong Nepal, then look how our neighbors would be treating us.

As a member of one of the largest Industrial House, how do you see the future of Nepalese economy by 2020?

I wish and pray to god that we Nepalese succeed to make Nepal one of the Asia's strong and vibrant economies. And it is up to the people whether we could achieve this or not, because people elect the leaders who make government and oppositions whose duties and responsibilities should be to compete politically for nation building, business community is made of people whose duty and responsibility is not only to think of his/her benefit, also the benefit of workers and the country. Similarly, workers/employees are people who should consider at their duty and responsibility to be dedicated and work hard for improving productivity and voice for practical cause), consumers are people who should be aware and reasonable enough to protect their rights, and bureaucrats are people who should act like a governor, facilitator, educators. This would seem as some kind of a joke, but this is where success factor lies. Therefore, to say what is the future of Nepalese economy after 2 years, 5 years, 10 years, 20 years depends on at what pace and how sincerely all the sectors involved in the development of our economy carry on their respected duties and responsibilities. We still have lot of confidence in the future of our country. We believe that we should have rather limited attainable and focused agenda. We should identify our areas of core competency, which can be show-cased to potential investors (both local and foreign alike) as distinct opportunity with comparative advantages in terms of profitability and security. We see some initial signs of this happening and therefore are hoping that we can play an active and leading role in the task of confidence building for all potential investors.

How do you see the present liberalization policy?

Well, everything is judged by the end result. And to be very frank with you, if we take datas from the related ministries and departments, it clearly shows that the end result of liberalization policy is not encouraging. The result of liberalizations policy is clearly reflected by the present deteriorating situation of domestic industries. Potential areas like IT, hydropower, and tourism are not growing satisfactorily. It's easy said than done and easy to be critical and blame others, but still I personally feel that the liberalization policy, sincerity in implementation and evaluation were not proper. But the first step has been taken. There were ample of time and opportunities for us to learn many things looking at the history of liberalization of many other countries, which I guess we failed to. Every country is giving protection in disguise to their potential sectors/industries and Nepal should also be smart enough to do the same. I also strongly believe that until and unless the economy is liberalized, it could not be the part of global economy and that definitely would hamper the economic development of the country. Here we are not in a position to say, it's never too late. We are too late; and looking at the past and present situation I am really scary how we would be doing once SAFTA & WTO really implemented. Here I am not trying to show the gloomy picture of our future, but trying to share my view that if we initiate immediate corrective measure, still we can make it..

Which is the area Nepal needs to focus on for future?

The buzz of the world "IT". I feel there is a lack of adequate understanding, shared vision and clear program of action. It is very difficult to develop core competency on everything. And especially country like ours, which boarders countries like China and India, this should be giving sleepless nights to the patriotic vision oriented leaders, business communities and Nepal as a whole.

Time and time again everyone is saying and I also strongly feel that Nepal should focus on areas like human-resources, Info-Tech, Hydro-power, Tourism and agri-based specific business that capitalizes on Nepal's altitudinal and ecological diversity, primarily catering to the foreign markets. There are huge potentials hiding in these sectors. . But this should not only be the government agenda and wishful thinking of ours. Regarding the areas where Nepal need to focus, we should be an excellent bargainers/negotiators and many foundations have to be developed -like suitable educational system, infrastructure, policies drafted that addresses the competing countries policies, markets etc.

What is the potential of developing bilateral trade between Nepal and China?

In spite of natural and cultural barriers that exist between Nepal and China, we should learn from mistakes and success of China and with advent of technology and globalization, slowly such physical and mental barriers are coming down which then opens ways for all sorts of business opportunities. We would like to see both China and India as prosperous as possible to minimize our own insecurities, lessen the tension in the region, and capitalize on the spillover effects. For the time being, trade potential between china and Nepal is quite limited. However once the physical difficulties are eased, with the advent of technology, we see tremendous potential in the bilateral trade between China and Nepal including tourism and allied development in and between Nepal and china (Tibet region)

What distinguish you to prove that you are different than your early generations?

Not significantly, but I feel that our generation wants things to happen real fast. Though this is out of context, I would like to touch upon few of the things that are really making me uncomfortable. May be our early generations are used to it because they have been facing this for a long. There should be a system where people at position be held accountable for their decisions and penalized for wrong decision. Since we don't have this, decisions are made as one likes, regardless of its implication. Take an example of Income tax. Even when your venture is at loss, Income Tax Department is capable enough show the venture as profitable if they are not happy. Then you go to the court depositing 100 % of fine and 50 % of tax. At the end even if you won, you are lost because you have to face all the hassles on the process and you don't know how long it will take to settle the case. The question here is, what legal provisions are there to penalize the person who did this wrong decision, what about Income Tax Department paying interest on the deposited amount. Our Prime Minister say that corruption is an invisible enemy, but I say it is visibly invisible. It is for sure that corruption could not be eradicated completely, but the corrupt people should also have some conscience and responsibility towards nation building.

What is the prospect of future investment in Nepal?

No one will invest in Nepal for Nepal's benefit. Everyone invests for his own benefit. Recent incidents at few multinational companies must have really scared the investors. Minus law and order problems, which is quite solvable, prospect in future investment in Nepal is good. We believe that every investment opportunity any where in the world must make business sense (I.e. profitability and security through distinct comparative advantages) and if we are able to give this confidence to potential investors, which we can and for which we have resources, then the prospect ought to be good. It is said that Nepal has one of the most attractive Foreign Investment Policy, but policy is not everything in itself. Here our rules, regulations, and policies keep on changing. When an investor invests, definitely he invests for a long term. But the irony here is, before the project becomes an operation, regulation and policies are changed on which the viability of investment was based.

Who would invest here when we don't have political stability, policy stability and have unsatisfactory inadequate infrastructure?

Investors would invest here considering the foreign markets, especially Indian market, that means; those countries policies also affect the investment environment to a great extent. Investors would also see our relation with them and politically how skillfully/maturely we negotiate. I think our present handling with India on SAD and Kodak cases have also really sent the message.