Nepal's economic condition has not improved

Pradeep kumar shrestha

No body can deny the fact that the economic situation of Nepal would go from bad to worse without proper development of trade and industry in the country. The industry and commerce will grow only if there is an appropriate environment for entreprenuership to prosper. The Federation of Nepalese Chambers of Commerce and Industry-FNCCI- has always tried to facilitate the nurturing of entreprenuership in the country and establishment of new ventures and expansion of existing industrial and commercial activities.

If we are to analyze our past performance in the field of economic and social progress, there is no room for satisfaction. Even after 50 years of the commencement of the modernization process, half of our population is still below the poverty line. This coupled with the fact that 50 percent of the adult population is illiterate and the country has been placed at 144th position in the Human Development Index-HDI list only demonstrates our failure. There are clear signs that we are lagging behind even in comparison to our neighbors of South Asia. The Prime Minister of Bangladesh informed the world community in the recent UN Summit that B’desh per capita income had grown from 200 to 380 US dollars and the country achieved self-sufficiency in food grain production. When we listen this, we have to consider what we have achieved. The fact that Nepal a food grain exporter has turned into a net food grain importer and her per capita is only 220 US dollars raises the question in our conceptualization as well implementation abilities. The future generation will certainly curse us if we can not stop and reverse the present trend of economic down turn.

We all had hoped that the country will get out of political instability and acquire clear direction of policies for the economic progress when one single party was able to win enough seats to command majority in parliament in the third general election after the restoration of multi-party democracy in the country. The assumption that political stability will be able to ensure the continuity of policies had generated the feelings of enthusiasm among the general public especially among the businessmen of this country. The commitment or priority fixed by Right Honorable Prime Minister after his assumption of the responsibility of the office of the head of the government reflected the sentiments of the majority of the people of this country. This is a sad fact that the commitments and priorities could not get translated into actions. Our economic condition has not improved. I do not want to blame anybody for our mal performance. Positive effects do not come up by blaming some body else. Today, all of us have to come together to develop a clear understanding on how we can take the economy into positive direction and collectively act accordingly. The analysis of the past mistakes should help our efficiency and dedication. We all are eager to see the end of political bickering and the strengthening of democracy in the country.

We seem to forget our own responsibility and blame geography, size and small market for our own failures. It is natural that Nepal seems tiny in terms of size and shape, as she is located between two giants of Asia. Smallness does not necessarily mean pettiness. Our geography has provided us the easy access to the market of more than two billion people. The present treaty of trade with India provides us a very good opportunity of expanding our export base as well as investment in our economy. We also feel that there is ample opportunity to expand our export to Tibet as well as the mainland part of China and persuade Chinese investments in Nepal. The FNCCI is working with the national trade and industry bodies of India, China, Bangladesh, Sri Lanka, Japan for increasing our economic links with these countries on the basis of joint studies for identifying the opportunities of mutual trade and investment. The FNCCI has enhanced its institutional links with the national bodies of the private sector of countries of Europe, America and Africa.

The WTO agreements, especially the provisions related to intellectual property rights, investment measures, unfair trade practices, standards, sanitary and phyto-sanitary measures along with the unsustainable cost of enforcement of dispute settlement mechanism for countries like ours will have a deep impact on our economy. We strongly feel that we need in-depth studies as well as detailed homework to prepare our nation to the likely effects of our accession to WTO. I think we need a joint task force of the government and the private sector in this regard.

Nature has given us not only difficult to access terrain, but also the most attractive placed of the world. The human resource, the highest mountain range, the green hills and lustrous valleys and the plains, the perennial rivers and rivulets and falling down 4-5 thousand meters within hundred kilometers of flow, the bio-diversity of this country have provided us enough natural resources for making Nepal and her people affluent. The need is to identify them well and the knowledge and the skill to make the best use of the available resources. We need the management capability to walk in tandem with the fast changing pace of the modern world. We need to double and treble our efforts to develop such skills within our own human resources.

The indicators of success or failure of a nation including that of its political leadership is the economic and social development of that nation. We feel, in the past, we have been diverting our attention from the issues of economic and social development. We should not stay back any more. We need to make the performance in the economic field, the indicator of success or failure of the political leadership. The political leadership determines the path of movement of the country from the driving seat. It is beyond doubt that economic and social progress requires continuity in policies, objectivity in decision making and the rule of law. So we have been advocating for a national consensus among the main political parties on basic tenets of our economic policies. I would like to request the leadership of various political parties not to use the strikes to make the already sick industries entirely un-viable but use a better form of protest which does not negatively impact on the economic health of the enterprise.

Today, it has become absolutely necessary to provide the sense of peace and security. If the present problem of peace and security can not be resolved in time, there is every likelihood that it will turn into a permanent problem and get out of hand of the policy makers and the political leadership. This will certainly be a very dangerous development with grave consequences.

The rule of law along with the security of life and property is a necessary pre-condition for investment. We can generate confidence of investors only if we can assure them that the laws and rules here are not interpreted and executed differently for different persons. We also feel that the mindset of the people at the implementation level needs changes. We need people who can readily accept the good works and behaviors of others and do not hesitate to change themselves in the positive direction. The society should develop the mentality that the entrepreneurs are involved in innovative and useful to the society work.

There is lack of inspiration among the investors even after 10 years since the beginning of the economic liberalization process. It has been mainly due to the lack of clearly defined laws, rules and provisions governing business and also the tendency to interpret the provisions of the laws subjectively at the execution level. There seems to be a complete lack of coordination among the government agencies. Those doing business as per spirit of the law are facing added problems. So a tendency to keep oneself out of the proper legal framework is rising. We firmly believe that the government as well as the businessmen has to become transparent. There has been growth of private sector participation in solving the emerging issues associated with the revenue administration. I would like to draw the attention of HMG/N about obstruction of not having a clear cut institutional framework for tackling continuously the emerging problems and issues associated with trade and industry. Growth of health and authorized trade and industry can yield healthy growth of revenue. Ambitious revenue targets can not go hand in hand with the slackness in the business environment. We have to concentrate ourselves in generating more economic activities within the country. We can not stay back with such conflicting trends as the growth of liquidity with the banks along with the unavailability of finance to the industry, the growth of share prices of banks and decline in the market capitalization of industrial enterprises.

Industrial and professional development, be it in the Information Technology field or hydropower related tourism, or be it any other field, can not automatically occur without adequate infrastructure and enabling environment. Our parliament, we have found spends very little time for deliberations on economy related issues. It may be due to the negligible number of people with background in economy and business in the parliament. We find a lack of clearly defined vision on how to achieve the targets of social and economic development, we feel shortage of appropriate and clearly defined and executed laws and rules even though the importance of rule of law in a democratic state is well accepted. All these are not the encouraging signs for those who have faith in democracy. We request the government and parliament to draw their attention to such state of affairs.

We can not stay without mentioning the sorry state of affairs of the waste management in our capital city Kathmandu and other urban centers of Nepal. The fact that we can not decide on an appropriate dumping site reflects the weakness of our decision-making system. The filth found all around has down graded our entire national prestige. We have been working for raising awareness towards this problem and developing partnerships for waste management and greening of the city. The construction of traffic island by joining hands with the Kathmandu Metropolitan City in the Tripureshwar area is very good example of such partnership. I think, you all have found positive impacts of this initiative of the FNCCI. The initiative taken by the tourism related entrepreneurs and the transport operators are very good examples of public-private partnership for good environmental causes.

The areas like transport, tourism, and other services have scope of generating ample employment in this country. Nepal can become a very huge destination for religious tourist. We need to concrete programs and plan to bring the women constituting half of the population in the mainstream of entrepreneurship. We need vigorous exercise in development of energy intensive industries and transport for generating enough internal demand for use of our hydropower potential. For the development of our hydropower resources, we should be able to produce the power at competitive price. Power should be made an economic and business issue rather than a political one.

The private sector in Nepal, large and small, has been able to achieve considerable skills in various fields. With appropriate encouragement and facilitation from the government, it can deliver service of international standard. What is required is the policy clarity. The private sector institutions of Nepal have developed their international links and have been able to hold international events related to areas like construction and printing. These are very good examples of the initiatives of the Nepalese private sector that other organizations can follow. The FNCCI, with the objective of encouraging the use of goods produced in Nepal and identifying good commodities for export has been conducting regional trade fairs with an active initiation of local level chambers of commerce and industry and is giving this activity a continuity. But we find the government unenthusiastic in pursuing the use of Nepal made goods in the government projects. We have found that the projects use imported products without scrutinizing their quality even if similar products are readily available in the country. This is not a healthy sign. In our export trade, the likelihood of barriers being imposed in the name of anti-dumping, quarantine, quality control is ever increasing. But we are not giving proper attention towards import management. I would like to reiterate our view that we can not remain away from such issues if we are to create a conducive environment to make our industry and business prosper.

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