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ENTREPRENEURS |
The New Generation Fresh from foreign business schools and armed with high ambitions, a horde of young Nepali entrepreneurs are beginning to take over the business sector from their parents. As Nepalese economy is passing through a transition, their role is crucial to reshape the country's economy with new vision in the coming years. No one has heard of them yet but soon they are sure to rule the business scene. Will they be able to bring the much-needed change in the economic sector? By KESHAB POUDEL Ever since he returned to Nepal after completing the business degree from British University, Shirish Amatya, the nephew of reputed industrialist Piyush Bahadur Amatya, has taken up his inherited business in earnest. Everyday, he arrives at his office at 10 am and stays till 6.00 pm. A junior member of Amatya family that owns the Amatya Enterprises Group, Shirish is using his exposure and qualification to upgrade his familiy business. With the arrival of determined and energetic youths like Shirish Amatya at private sector industries and businesses, the whole atmosphere in this sector is gradually changing. Although the new generation of entrepreneurs is yet to prove its talent and capabilities, its arrival in the business scene is encouraging. The second generation entrepreneurs like Shirish Amatya, Saurav Jyoti, P. P. Khetan, Sunil Shakya, Prasidha Bahadur Panday, Sabin Shrestha and Birendra B. Basnet are on their way to expand the business empire they have inherited. The road to success may not be easy in a country like Nepal where the traditional bureaucratic set-up is indifferent to winds of modernism. It may take time to change the traditional bureaucratic set-up but professionalism does always pay. Like the government sector, the pace of development in private sector, too, has been slow in the country. Although the pioneering generations of business houses had some visionary entrepreneurs, pre-1990 era was not so competitive. Traditional business houses did not have to worry much as there was no big competition for survival. But times have changed and so has the situation. Sandwiched between two upcoming Asian giants, survival of Nepalese industry is now largely dependant upon the competitive dynamism of young entrepreneurs. Equipped with academic degrees from renowned universities and exposed to the modern global market, the new generation of entrepreneurs has entered into industrial and business sectors promising to sustain and expand it. Despite some changes in the industrial and business sectors, the system is still traditional. The bureaucratic red-tapism and corruption poses tremendous bottlenecks to the modern-educated breed of entrepreneurs exposed to quick decision and clean governance. The arrival of these fresh lot is also expected to check the corruption-ridden business atmosphere dominated by the nexus of corrupt politicians and businessmen. As they have been exposed to western business ethics, their arrival also promises a new business culture in the country that will embrace the social responsibility. The transition in the guards in Nepalese business and industrial sector has been very smooth as the new generation was groomed under the guidance of experience. "This is a very right way of socialization as older generations are passing their experience to their offsprings in a working place," said Dr. Rishikeshab Raj Regmi, a sociologist. Academic qualification and exposure are not always adequate to become a successful entrepreneurs. Experience is equally important. "Of course, the new generation may have sound educational background and knowledge but they don't have much needed local experience," said industrialist Narendra Basnyat. "If they don't work by keeping this reality in their mind, the initial enthusiasm may soon fade away to frustration." "I don't think all foreign degree holders can do miracles in the industrial and business sectors. Along with the degree, they also need experience and maturity," said Bishnu Raj Adhikari, Principal of Kathmandu College of Management. "University degree does not provide international exposure. It is the working experience which is equally important." Over the years, fresh lots have been working in their respective business empire under the guidance of their elders. This is where younger generations get the opportunity to understand local realities and use their academic background for exploiting these realities. Higher education always gives vision and determination as well as injects new values in the youth. The businessmen having international perspective will definitely bring best results. Think globally act locally is the new mantra. This is the first time that such a large number of foreign-educated breeds are taking up the reins of business empires in Nepal. In 1980s, there were only a few such entrepreneurs. As the business and industries are getting more globalized with the emergence of new opportunities, the industrialists, too, realized the need to make their offsprings more competitive and sound on global knowledge. It is difficult to sustain business and industry without having knowledge of global perspective and changing economic trends. "A successful businessman must know what the state of global market is," said Dr. Regmi. Although Nepal's bureaucracy and political sector are yet to prepare themselves for the Internet era, Nepal's business and industrial houses seem to have done sufficient home work. Apart from the above-mentioned seven young generation entrepreneurs, many others are currently studying overseas and are set to join their parental business upon their return in the next few years. With the per capita income of only 210 USD per annum, Nepal is one of the poorest countries in the world. Nearly half of its population live below poverty line and its social indicators are highly unsatisfactory. In a country with poor economic policies, dysfunctional financial system, weak tax administration, handling of economy and business sector is all the more challenging. Nepal's business sector has changed dramatically in the decade following the restoration of democracy with more economic opportunities which demand more youths with high qualification. "The demand of quality education in the business sector is very high. We are also giving high quality education in the country like that of any university of the world," said Adhikari. In the changing scenario, even retaining the traditional empire requires hard work and vision. At a time when large number of talents in other sectors are getting frustrated, the new generation in business sector are working with hopes and aspirations. If the government brings timely changes in its policies, young entrepreneurs may become driving forces in the business, industrial, tourism and IT sectors. But as long as the political leaders do not realize the importance of economic development, nothing will work. The challenges in front of younger generation is to adopt a new vision. But working in Nepal is like a gamble as it is filled with hardships, headaches and vague hopes that they can help shape Nepal's future. Atmosphere, too, is not encouraging as procedures for obtaining license and other legal formalities do not support the enthusiasm of new entrepreneurs. "I have seen many new entrepreneurs getting frustrated after encountering hassles and difficulties with the bureaucracy," said Narayan Raj Tiwari, former secretary. One of the advantages for all these new generation industrialists is that they already have the business created by their elders. What the new generation needs to do is just to expand and diversify the business. "The new generation of youth entrepreneurs are well qualified and professional. Thus, they are more business oriented than their past experience-based generation," said Professor Dr. Bishwo Keshar Maskay. "I have not seen any of the new generation entrepreneurs coming to my office. Bureaucracy will definitely respond differently to them," said a high level official at the Ministry of Industry and Commerce. "The trend is changing now. In the past, the top brains of the society used to opt for the government service. They never preferred entrepreneurship (business or industry) and these sectors were left to second grade people who could hardly influence the government of the day. Realization is coming that education is vital to run business," said Badri Bahadur Karki, the Attorney General. A certain new generation entepreneur, on condition of anonamity, industry and commerce. Today there is greater recognition for industrialists and businessmen. The businessmen are not taken merely and respect as money donors to politicians. All of them, without exception, are making plans for the future, not the present, which means that the vision and horizon is also changing. At a time when traditional business values are changing globally, old business empires of Nepal also need to update with the changing scenario. In these circumstances, growth and expansion of industrial houses is much dependent on the determination of younger generation entrepreneurs. 'I Am Scared How We Would Be Doing Once SAFTA & WTO Are Implemented' — Sabin shrestha
Sabin Shrestha, the nephew of renowned industrialist Ram Lal Shrestha and son of Prem Lal Shrestha, is focusing on the booming information technology business. A graduate from Tribuhuwan University, 30-year-old Sabin is also involved in ICTC, Highland Distillery, Nepal-Bangladesh Bank and Premier Insurance. How do you evaluate overall economic situation in the country? 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 in the right direction. Definitely, the economic indicators reflect progress in some areas to some extent than before, but this is not at all satisfactory. Economically strong Nepal, than look how our neighbors would be treating us. Smuggling and gray market because of their multiple poisoning effects is really hampering our economy beyond anyone's imagination. As a member of one of the largest Industrial Houses, ho 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 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. 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 to what extent the above mentioned components carry on their respected duties and responsibilities. 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 data from the related ministries and departments, it will clearly show that the end result of liberalization policy is not encouraging. 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 hold back the economic development of the country. Here we are not in a position to say, it's never too late. We are already too late; and looking at the past and present situation I am really scary how we would be doing once SAFTA & WTO are really implemented. Which is the area Nepal needs to focus on in future? The buzz of the world "IT", Ha Ha. It is very difficult to develop competency on everything. And especially country like ours, which borders 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 Information Technology, Tourism, Hydropower and agri-based specific products primarily catering the foreign markets. There are huge potentials hiding in these sectors. What distinguishes you that you are different than your elders? 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 were used to it because they have been facing this for a long. There should be a system where people in 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 to 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 win, you will be at loss 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. What is the prospect of future investment in Nepal? No one will invest in Nepal for Nepal's benefit. Everyone invest for his own benefit. When an investor invests, definitely he invests for a long term. And above all, policy is not everything in itself. Recent incidents at few multinational companies must have rally scared the investors Here our rules, regulations, and policies keep on changing, before the project becomes an operation. Who would invest here when we don't have policy stability and inadequate infrastructure? Investors would invest here considering 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 case have really sent the message. 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. 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. Organizatin: ICTC Group Banking Insurance Premiere Insurance Co.Ltd. Consumer Product/Marketing Prime International Pvt. Ltd. ‘We Could Specialise In I.T And Communications As This Sector Suite Our Lack Of Natural Resources’ — SAURAV JYOTI
Saurav Jyoti is a typical new breed entrepreneur. The 26-year-old bespectacled boy, Saurav is said to possess a good working knowledge about the Nepalese economy. A graduate in industrial engineering from BMSCE College in Bangalore, Saurav, the heir of the Jyoti Group, makes frequent trips to the Group's steel and iron plant at Parwanipur in Birgunj. Close confidants say that the junior Jyoti is doing a remarkable job. Son of reputed industrialist and former President of Federation of Nepalese Chamber of Commerce and Industry Padam Jyoti, junior Jyoti is fairly hopeful that the Nepalese economy will gain momentum. How do you evaluate the overall economic situation of the country? In the Trading Sector, business seems alright so far. But on the other hand, in the Industrial/Manufacturing sector, the market is not expanding as one expected. Demand for products is sluggish. The domestic market is very small and there are a lot of competitors. In the process every industry is getting squeezed, but the customers are the beneficiaries. As a member of one of the largest industrial houses, how do you see the future of Nepalese economy by 2020? I see no change in the Nepalese economy by 2020, unless we take a strong stand to specialise in particular fields, work towards developing the RIGHT policies and their HONEST implementation. If such measures are not taken we will slide down further. How do you see the present economic liberalisation policy? Our Economic liberalisation policy is a positive step towards economic development provided it is at a pace we can manage and handle. It should be balanced so as not to be destructive. This way Nepal will not lag behind other countries. Nepalese Industries should be provided with the necessary environment and given reasonable time to become globally competitive so as to be able to survive and blossom. Which are the areas Nepal needs to focus on for the future? Firstly, Nepal needs to concentrate on Tourism Industry which has huge potential but has not been tapped fully. This sector could do wonders for the economy of our country, if marketed and tapped to it's full potential. Nepal is no doubt the most beautiful country in the world. Secondly, we could specialise in I.T. and Communications as this sector suits our lack of natural resources and we have no disadvantages. Moreover, Nepalese are intellectually competent or rather smarter than the rest of the pack so we could go ahead and compete head on with the rest of the world. What is the potential of developing bilateral trade between Nepal and China? Since the time of my late grandfather, Maniharsha Jyoti, our group has been in trading business with Tibet Autonomous region of China. I strongly believe there is big potential of developing bilateral trade between Nepal and China. We need to take advantage of the geographical nearness of China to try and penetrate their massive market to increase trade. What distinguishes you to prove that you are different than your earlier generation? Every person is different from the other and each person has his/her own strengths and weaknesses. I have just joined business and still have a lot to learn but the business environment has changed considerably and things are very much different than what they were for the previous generation. The environment today is much more demanding and competitive. Thus, our generation has to be more aware of these changes and we have be to even more efficient and productive in order to compete not only within Nepal but globally. Jyoti Group of Companies :
2. The basic objective of Jyoti Group is to provide our Customers with the best quality and international standard products and services. Customer's satisfaction is our priority. 3. The first Industry to be established was HIMAL IRON. It was established in 1961 by my Grandfather Maniharsha Jyoti. This is the first steel rolling mill in Nepal. After that HIMAL OXYGEN was established in 1973 which is also the first oxygen plant in Nepal. Later HIMAL WIRES was established in 1982 which also is the first wire drawing mill in Nepal. Once business went on increasing Jyoti Group also started expanding and diversifying into new industries and trade. Practically considering circumstances in Nepalese business scenario it is very difficult to survive or prosper with only one type of business. Hence Jyoti Group has diversified into different industries and trading house. 4. In JYOTI GROUP we believe that " INDUSTRIES ARE THE BACKBONE OF THE COUNTRY". Hence Jyoti Group investing in and having so many industries shows the dedication of the Group towards supporting and contributing to the growth of national economy. 5. We have around 2,500 employees. "Nepal Can Survive On Tourism-Based Economy" — Prasidha Bahadur Panday
Prasidha B. Panday, 37, is fairly successful in the tourism sector. In his capacity as the managing director at Cimex Trading (P). Ltd, Panday has more experience than his fellow youngsters. Son of renowned hotelier Shyam Bahadur Pandey, junior Panday is fully dedicated to the hotel business. Panday lent his helping hand to his father as soon as he competed bachelor in Business Administration from Tribhuwan University. He also studied at the Harvard University School of Business Administration. Soft spoken Panday sees tourism as the potential sector for all round development of the country. He spoke to SPOTLIGHT on different issues of business & economy. Excerpts : How do you think should Nepal develop its economy? Nepal can maintain a tourism-bound economy as it has every ingredient necessary to attract tourists. Tourism holds major advantage to push the country forward. Nepalese government should promote tourism as the topmost priority sector. The nation can also survive on the single tourism-based economy. What vision do you have for a comprehensive economic development for Nepal? Torurism always has had a trickle-down effect in the Nepalese economy. A visit by a single tourist can result in employment to many people. Increasing number of tourists wil have multiplying effects. We have to concentrate more on tourism which is totally under the control of private sector. Although there are many other sectors, tourism is the most result-oriented one. In other industrial sectors, we will never be able to compete with India. Tourism will be a leading area for investment. It will also help consume electricity and agricultural products. How do you distinguish yourself from your father in the style of handling business? There is not much difference as I believe in the change with continuity. Of course, the technology has changed a lot but the experience still counts a lot. What is your impression about young executives in your office? This is a competitive world. One has to work hard to keep pace with the society. The executive colleagues in my office are very competitive and dedicated. As a businessman, how important do you think is the political stability? Political stability is very important. If you want to achieve faster growth rate, political stability is a pre-requisite. Democracy opens up opportunities in all sectors but frequent changes in the government will harm the interest of the country as well as the economy. If one party rules for five years without any hindrance, one can see some drastic change. Do you have any plan to expand your industry? Definitely, we have plans for expansion. We are working for several hotel chains as new ventures. Shangri-la Group has been negotiating a 10 million USD joint venture Deluxe Resort at Pokhara Begnas lake with one of the leading groups of Singapore. Apart from tourism, what other sectors are you involved in? We are also involved in trading business, mostly in telecom sectors. "We Are Trying To Change With Global Change" — P.P. KHETAN
Prem Prakash Khetan (P.P Khetan), 25, - nephew of renowned industrialist Mohan Gopal Khetan and son of late Hari Gopal Khetan, too, is also a hard working boy. Khetan did his diploma in Commerce from Tribhuwan University. The junior Khetan, Executive Director of the Khetan Group, oversees matters related to company law, tax laws and international agreements. How do you evaluate the overall economic situation of the country? Overall the economic situation of the country has changed, new industries, commercial activities, government's approach, private sector partnership, new services and financial sector have energed. However the general purchasing power and income of people have not grown. As a member of one of the largest industrial houses, how do you see the future of Nepalese economy say by 2020? We have not visualised 2020 either at government level or at private sector level. Definately the future is very good as their's very little we have explored. But this is high time to plan for 2020 otherwise we will be isolated in the globalisation process specially in trade. We have to drive independent economic situation with today's goal of higher employment and revenue in the nation. How have you found the present economic liberalization policy? Quite good. We are trying to change with global change taking lead in South Asia. But still their isstill a lacuna in government private sector relationship. The political and beurocratic approach remains traditional and unprofessional. Their is lot we can do and explore the liberalized economic situation. What are the areas Nepal needs to focus for economic development? 1. We have to update the laws, legislations & policies related to trade and investments. 2. We have to explore domestic potentials/expertise & drive own resources. 3, government's approach should be pro private sector. 4, address-Maosist problem, unionism, corruption and industrial peace. 5, Our diplomats overseas should project economic and commercial side also, 6, Sell Nepal as investment friendly country viz. friendly environment. 7, vision for 2020 with clearcut defining govenrment private sector responsibilities 8, harmonisation between primeminister's fast track committee, investment promotion board, one window policy and such other bodies. What are the potentials of developing bilateral trade between Nepal and China? Very soon China shall develop Rail Transport upto Tibet and their could be a situation where China and India will trade via Nepal and becoming a super beyond where we can create lot of opportunities. Since China is ceonomic power and the most compitive trade we may have great scope for augmenting and diversifying our trade. What are the distinct characteristies that set your generation of entrepreneurs apart from your panrets? Very clearly from traditional business our generation is moving to enterprenuership & from general business to e-commerce we are adopting more of a competitive and professional approach. What is the prospect for the future investment in Nepal? We have seen there is excess liquidity in the market. Rather than only FDI(s) we can mobilize our money. There are lots of potential from hydro to creative tourism, financial sector to service sector, health and education and also our own domestic requirments of cement, fertilizer, medicines and consumer items including modern agriculture. Some of the areas may need further explorations. No doubt there is good prospect — we need friendly environment only. 'Anti-Dumping Policies Should be Devised' — SHIRISH AMATYA
Nephew of Piyush Bahadur Amatya, the 23-year-old Shirish Amatya leaves for Bina Chamber, the headquarter of Amatya Group, at 10:00 am and works till 6 pm everyday. Since his arrival after completion of Bachelor of Economic Science (Hons) from the University of Manchester, United Kingdom, junior Amatya has been making every effort to bring in some changes in the working pattern at the group. Son of industrialist Hirendra Bahadur Amatya, Shirish is said to be very ambitious as well as dedicated to his job. He looks after the business management of the Group. How do you see economic prospects? If the projected growth rate of 6% for the year 2000-2001 is sustained, then the current per capita GDP of $200 will double to $400. So in terms of the living standards the prospects are very good. What is your impression on economic liberalization ? Economic liberalisation is seen as the norm and the way forward these days. This is pretty much evident from the fact that most of the developed countries are economically liberalised. Thus I find it very encouraging that the government has implemented economic liberalisation policy. However, I feel that there are certain caveats to this. For instance, in promoting free trade the government has to be careful of dumping practices of some countries. So policy similar to the Anti-Dumping policy in the U.S should be devised to prevent foreign manufacturers from dumping their goods in Nepal. Another area of concern is the development of the private sector. Again, the role of the government in trying to increase private sector participation is very encouraging. However, the government, at present is not exercising restraint in granting licenses to new/ potential entrants to any market. As a result, many new markets are overcrowded in their initial stages thus impeding the progress of the investors as well as the progress of the market itself. What are the potential areas in Nepali economy ? Nepal has a huge potential in tourism and hydroelectricity. As of now, I feel that we have not been able to exploit fully these potentials, reason being the lack of infrastructure. How do you see the future of Nepal-China economic relations ? China is a huge country, both in terms of its size and population. China is also one of the emerging economies in the world. Hence it is a lucrative market for trade for any country. Thus bilateral trade with China will be very beneficial to Nepal as well. The potential for trade, especially in the context of Nepalese exports, is even more apparent in industrial areas such as steel and cement. As far as I know, steel and cement produced locally in China are very expensive. Therefore, I think that if we are able to export steel and cement in significant amounts then our products will prove to be very competitive. Future prospect for investment in Nepal is very good of the political situation becomes stable. This is especially true for tourism and hydroelectric sectors. AE Group is one of Nepal's leading Trading & Industrial Houses. It is engaged in the production, import and distribution of various products and represents a number of major international manufacturing companies for Nepal. The Amatya family's venture into the realm of business span some 125 years. AE Group under the Chairmanship of Mr. Piyush B. Amatya has under its wings the following trading and manufacturing companies.
"The Focus Shoudl Be On Increasing The Income Of The Agrarian Population Through Development Of Agriculture" — SUNIL ShAKYA
Sunil Shakya, 38, is successfully running Kathmandu Guest House, one of the famous hotels in Kathmandu. Also a trained pilot, Shakya, the son of renowned tourism entrepreneur and conservationist Karna Shakya, also inherited the business from his parents. Having studied travel industry management from Hawaii University, Shakya is also the Vice President of Nepal USA Chamber of Commerce and Industry. His focus is on tourism. As a young and emerging entrepreneur, what vision do you have regarding the direction your country should take in terms of economic development? Taking a cue from India, India adopted a highly controlled regime with greater emphasis on import-substitution during the first three decades of independence i.e. 1950s, 1960s, and 1970s. In addition, the emphasis was on attaining self-sufficiency in food-grain production. It was only during the 1980s when the country had sufficient foreign exchange reserves that SDR 3.9 billion from the IMF was drawn. The Sixth Plan was launched and the process of liberalization was initiated, though slowly. From the beginning of the Seventh Plan (1985-1990), the thrust towards liberalization came with the reform process beginning in 1991. While the experience of India may be useful to Nepal, there is no need for Nepal to have an import substitution policy and highly regulated regime for too long. How do you plan to develop your industry? How would it be beneficial to the country and countrymen? Being an agrarian country, Nepal's focus should be on the development of agriculture by undertaking agro-processing activities on a large scale and labour intensive manufacturing activities through small and medium enterprises. It is this orientation which could help Nepal in increasing the income of its agrarian population and providing employment. In the first stage of development, the focus should be on increasing the income of the agrarian population through development of agriculture and agro-processing activities and through this, achieve linkage with manufacturing activities. The service component in Nepal should be limited to the extent of providing infrastructure and efficiency in production process. India, at present has moved from the 'Hindu' rate of growth at 3.5 per cent recorded during the earlier three decades to the rate of growth of 6 - 7 per cent now. Similarly, Nepal could increase its threshold limits of GDP growth rate of 2 3 per cent to at least 4 — 5 per cent in the next five years. Though the private sector in Nepal has yet to develop, it would be advisable for the government to vacate from the areas which can be comfortably handled by private sector. Movement to the new areas has to be faster because the process of moving from a highly controlled regime towards a market oriented and a free economy with least or minimal restrictions in the present day world of 'digital divide' cannot wait any longer. Being a small and land-locked country, Nepal should concentrate on utilizing its resources, especially, the natural resources for faster economic development. The country has a lot of potential for power generation through hydro electric sources and its own requirement of power at present is small, may be 1/25th of the potential. The excess power could be sold to India in the beginning. As the Nepalese economy grows, the sale to India could be reduced and the power generation within the country could be employed for agriculture and industrial development. How do you find the environment in terms of policies and infrastructures in the country for the economic development and industrialization? The environment in terms of policies and infrastructure for economic development and industrialization could not be better than what it is now provided the government takes quick policy initiatives in both agriculture and industrial development. 4What sector should Nepal focus on to achieve its primary target of poverty alleviation? Being in the limelight for over decades, Nepal may focus on tourism. In addition, the country can also think of developing its small scale and cottage sector rather than the capital-intensive heavy industries which may create some imbalances in the economy. As is well established, developing the small scale and cottage industries not only requires relatively smaller amounts of capital, but such industries are highly labour-intensive too. This, in turn, helps in solving the unemployment and poverty problems besides ensuring a balanced regional development. To begin with, Nepal may start from labour-intensive industries and gradually move on to capital-intensive industries which may absorb the emerging technologies. In doing so, Nepal may need not only foreign investment but may also have to increase its own saving rate which at present is dismally low at 8 per cent in 1997. What is the economic potential of Nepal? During 1998, Nepal's GNP was US$ 4.8 billion and in terms of purchasing power parity (PPP), it stood at US$ 24.9 billion. Nepal's per capita income was US$ 210 and the PPP was US$ 1090 in 1998. During 1997-98, its annual growth rate was 2.2 per cent . There has been an encouraging change in the composition of the gross domestic product between 1980 and 1997. The share of agriculture declined from 62 per cent to 43 per cent, industry's share rose from 12 per cent to 22 per cent and that of services, the share rose from 26 per cent to 35 per cent between 1980 and 1997. Manufacturing sector's share went up from 4 per cent to 10 per cent during the same period. Average annual growth of investment was quite satisfactory at 6.0 per cent during the period 1990 and 1998. Exports recorded US$ 153.4 million during 1999-2000 compared to US$ 122.4 million during the preceding year. Compared to a negative growth of —28.11 per cent in 1998-99 over the preceding year, Nepal's exports rose at 25.32 per cent during 1999-2000 over the preceding year. Nepal's share in world trade improved from 0.37 per cent in 1998-99 to 0.41 per cent in 1999-2000. Imports declined to US$ 113.2 million during 1999-2000 from US$ 144.8 million during the preceding year. Compared to a high growth of 52.02 per cent in 1998-99 over the preceding year, Nepal's imports rose at a negative —21.84 per cent during 1999-2000 over the preceding year. Nepal's share in world trade improved from 0.34 per cent in 1998-99 to 0.24 per cent in 1999-2000. Nepal should feel content to see these positive changes occurring in both exports which rose and a drastic improvement in its imports. 6 As terms like globalization, liberalization and free market are getting popular, how should Nepalese entrepreneurs prepare to reap the benefits of open market ? In order to get the advantages of globalization, it is essential that the domestic entrepreneurs should first make sure that they themselves are fully established and are in a position to supply goods and services to the domestic consumers. In such an economy, price and quality of the products do not matter much as far as size of the market is concerned as the existing producers alone will be sharing the market. Will the concept of free trade and open market be beneficial to Nepalese industries? The free trade and open market concepts will surely help any economy and Nepal is no exception. Free trade will help Nepal to expand its scope for identifying large un tapped foreign markets and thereby help them to increase sale and expand the size of its operations. ‘The Financial Monitoring System Of The Country Is Archaic’ — BIRENDRA BAHADUR BASNET, MD
Like his high flying business, Birendra Bahadur Basnet, 36, Managing Director of Buddha Air, has ambitious target to rule the field of aviation. Son of politician Surendra Bahadur Basnet, Basnet's Buddha Air has already achieved success. A master in economics from Tribhuwan University, Birendra Bahadur Basnet's empire is of his own making. How do you see the present economic liberalisation policy? Nepal has tried to embrace the policy of Free Market Economy. This has provided the new generation entrepreneurs with lots of opportunities. People are looking into lots up new concepts and trying them out, which is helping the economy grow. How do you evaluate the overall economic situation of the country? The financial monitoring system of the country is archaic, which causes into lots of unlawful seepage of wealth. In this age of Information Technology, the country has to effectively invest in creating a tightly monitored financial information system, which should guide the total financial transaction at the micro as well as macro level. This would in effect not only make the collection of taxes very transparent but also effectively control the rampant corruption that is prevalent in the government decision-making circle. All the commercial banks are overflowing with unutilized funds. The interest rate of the country is going down whereas the global trend is just the opposite. This shows that the businessmen do not have good cash position but there is excess of cash in the economy. Where does this cash come from? Due to such excesses, cash banks are investing in high risk business and thus loosing their investment as recent events are proving. On the other hand the government is taking loan in convertible currency, which is to be paid back through local currency earning. Taking the case of Kaligandaki A, the loan to the tune of US$ 400 million was taken when the exchange rate was NRs. 50.00. The project is not yet completed and the exchange rate has appreciated by NRs. 23.00, taking into consideration this appreciation the cost of the project has gone us by US$ 126 million. The idle funds lying with the commercial enterprises should be utilized in these projects, which will reduce the cost drastically. The re-distribution of wealth has become very uneven. The top 0.01 percent of the population control more than 95% of the wealth. An effective poverty elevation program and cash crop oriented cooperative farming, upgraded to the secondary product industry need to be established through active participation of the government. In my view the total budget of the country can be sustained through effective internal revenue collection, effective control of corruption and thrifty expenditure. The Maoist problem needs to be solved. The Maoist problem has not cropped up due to any cast, creed or religion issue, therefore in democracy all issues have to be solved through unconditional dialogs as Maoist have established themselves as a strong group. As a member of one of the largest industrial houses, how do you see the future of Nepalese economy by 2020? I am very optimistic about the future of Nepalese economy. Once the muli-party democracy stabilises and the rule of law is followed, the future would be rosy. Which are the areas Nepal needs to focus on for the future? Nepal needs to focus primarily on her agricultural industry, especially in the cash crop, which can become secondary product. The main reason is, because 90% of the population survive on agriculture and to upgrade their standard of living and create some disposable income, their level of income has to rise. Then only, the farmers can think of shifting into new ventures. The next two industries are hydropower and tourism. Peace, tranquility and increased number of international flights to Nepal will automatically enhance the tourism industry. The entrepreneurs involved in the tourism industry are promoting and building the infrastructure. Regarding hydropower, there has to be a long-term agreement with the Indian government based purely on commercial terms and not involving politics. This will have a tremendous effect on the economy of the country. The main potential industry is the Information Technology industry. This industry has no boundary and can be promoted very easily. The government will have to come with an attractive package to promote this industry. What is the potential of developing bilateral trade between Nepal and China? There is always a potential in trade irrespective of any country in this global village concept age. Nepal has been having a trade relationship China since ages. Nepal must learn from China, how they have been able to exploit their cheap human resources. What distinguishes yo uto prove that you are different than your earlier generation? We have learnt from history, we have learnt from the experience of our elders and have become more experienced. The prospects of future investment in Nepal are very bright provided our leaders guide the country properly. |
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