National 7 (Spotlight Weekly)

Bleeding The Economy

The Maoist-imposed closure of a dozen industries is hurting the economy and scaring away the investors

By SANJAYA DHAKAL

A dozen major industries including Surya Nepal, Soaltee Hotel and Bottlers’ Nepal Limited remain closed since August 17 following the threat by the pro-Maoist All Nepal Trade Union Federation (ANTUF).

Close on the heels of the shutdown of industries, the Maoists have also threatened they would not allow the operation of American invested companies in Nepal. As a result Colgate Palmolive factory – which has American investment - in Hetauda has already suspended its operation temporarily citing lack of raw materials.

“The recent actions by the Maoists appear to be aimed at strangulating the nation’s economy by scaring away the investors,” said an industrialist who desired to remain anonymous.

Despite government assurances, the industry-owners have said they would not open it unless the Maoists withdraw their threat. On the eve of the closure the Maoists also exploded bombs at Hotel Soaltee.

Binod Bahadur Shrestha, president of the Federation of Nepalese Chamber of Commerce and Industry (FNCCI), said that the government would lose tens of millions of rupees in revenue everyday if these 12 industries remained out of operation.

The government spokesperson and Information Minister Dr. Mohamad Mohsin claimed that the Home Ministry has done all homework to guarantee security to the industries concerned. “The government assures of full security. The industries should continue their business normally,” said Dr. Mohsin. He added that since the trade unions related with the industries have already deplored the Maoist threat, they should withdraw it. “When the workers on whose name the Maoists have issued the threat, themselves, have said it would only hurt their livelihood, it is up to the Maoists to realize the situation,” the minister said. The government has also said it would start the investigation to announce the whereabouts of labor union leaders affiliated to the Maoists – one of the major demands of the ANTUF, which has put forth a charter of 11 demands. It has also accused the companies of exploiting the workers and spying against their party

Following the warning by the pro-Maoist trade union of physical action against any industry that violated its call, the industries have pulled down their shutters. In fact, Shanghei Plastic Industry of Lalitpur has decided to close down the industry for good following the threat. According to its owner Pawan Kumar Shanghei, the industry was not prepared to continue in the existing chaotic situation.

Thousands of workers and their families risk losing their livelihood due to the threat to these industries. The Industrial Security Group (ISG) – a group comprising several embassies including India, the United Kingdom, the United States of America, Germany and France and their bilateral chambers of commerce and industry – has deplored the closure. The ISG has urged the Maoists to allow the industries to function freely in the framework of Nepali laws and in accordance with international norms. “Disruptions of their operations would severely affect the livelihoods of hundreds of thousands of employees, their families and associates, undermine investor confidence, discourage future investments and harm Nepal’s economy,” the statement by the ISG states.

The economy is one of the most affected sectors due to the raging conflict in the country. Extortion, destruction and bombing have hurt the industrialists and the workers alike. The prolonged closure of major industries is also sending a very grave message to the foreign investors.

All this has come at a time when the report released by the Department of Industry claimed that the just concluded fiscal year 2060/2061 (2003/2004) had witnessed 55 percent growth in the foreign investment. The fiscal year saw Rs 2.75 billion worth of foreign investment compared to Rs 1.77 billion during the previous fiscal year. The department had given approval to 77 foreign investment projects in the period.