National 7 (Spotlight Weekly)

Economic Agenda

The apex chamber is lobbying political parties to give the nation's economic agenda its due

By BHAGIRATH YOGI

In ordinary times, businessmen could be seen pampering the politicians and bureaucrats to get things done. But in the critical situation the country is in, Nepalese business leaders could not help taking on the politicians heavily. "Acute corruption is dogging the country," said Ravi Bhakta Shrestha, President of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI). "Although it might pay off in the short run, it acts as a deterrent to the evolution of a competent market economy."

The 36th annual general meeting of the FNCCI (July 30-31) not only gave the business community an opportunity to discuss practices like corruption, it also provided a forum for representatives from different political parties to present their agenda for the economic development of the country.

Organized under the theme, "Basis of economic development of nation: A long term vision," the caucus, according to Vice-President of FNCCI Rajendra Khetan,† was an exercise on part of the private sector to forge broad consensus among the political parties towards the economic upliftment of the country.

The business community is taking the initiative to revive the country's economy at a time when the six-year-old Maoist insurgency and global economic slowdown, among others, have taken a heavy toll. With the economy in the last fiscal year 2001-02 estimated to grow at less than one percent - the lowest rate in the two decades, the challenges for both the government and private sector are enormous.

There has been a 10 percent decline in exports, with export to third countries (other than India) falling by 38 percent over the last ten months of the last fiscal year. The number of tourists has declined massively and no new investment is coming in. A majority of the industries have turned sick and problem of unemployment is becoming acute.

"The FNCCI has been prodding one and all to embark on the task of economic development," said Shrestha. "There is a need to identify areas of comparative advantages in the light of the physical features of the country, available natural resources and infrastructure."

A predominantly agrarian country, Nepal has a long way to go toward industrialization. As the country is preparing to join the World Trade Organization and the South Asia Free Trade Area is in the offing, Nepalese businesses have no option but to compete in the global marketplace.

"The competitive strength of our private sector is weak compared to the regional and international level," said Dr. Shanker Sharma, member of the National Planning Commission. "Nepalese industries have not only failed to compete with Indian and Chinese products, they are lagging behind in identifying new product and services that could compete in the international market."

According to Dr. Sharma, small and medium industries should either try to meet the domestic demand or produce ancillary products for big industries. "Unfortunately, Nepalese industries have not been able to develop such forward and backward linkages."

Another area where the private sector is yet to come up to the mark is transparency and corporate good governance. Most of the business houses are yet to shed their family legacy and emerge as a competitive corporate entity.

Despite such drawbacks, the FNCCI has always been lobbying the government to give top priority to economic development of the country. Of late, it has also developed linkages with regional and international business communities.

During the recent state visit of King Gyanendra to India and China, the Nepalese private sector explored opportunities to further economic ties with these two close neighbors. On June 25, FNCCI signed a memorandum of understanding (MoU) with the Federation of Indian Chambers of Commerce and Industry in New Delhi† to set up joint task forces to promote power and tourism in Nepal. Similarly, on July 14, FNCCI and All-China Federation of Industry and Commerce signed on a MoU in Beijing to promote trade and investments between the two countries.

Set up in 1965, the FNCCI has emerged as the umbrella organization of the industrial and business sector in the country. It has 86 member units at the district level. Similarly, 50 commodity associations, 430 associate members, nine bi-national chambers and one special member are also affiliated to the FNCCI.