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No outsourcing



MISSED OPPORTUNITIES: Nepal may have missed the boat on BPO

There was much hype about the recent CAN Infotech apparently drawing more than half a million visitors during the annual IT do. It has turned out to be another of the events in our calendar where hundreds turn up and little is known as to what volume of business transactions actually take place. For the organisers, the gate money is the key focus of the event.

The Nepali IT industry began before the IT revolution in India. Nepali hardware vendors were importing equipment to be shipped to India. When mobile technology became affordable, mobile phones made their way from India into Nepal. However, no Nepali IT firm made any headway in expanding their business outside of Nepal or setting up large scale plants that could supply to India. Perhaps the doyens of IT industry were happier fighting for positions in CAN rather than making an effort to take their business to a regional or global level.

The hardware and software industries will continue to focus on the domestic market, and with technology breakthroughs still coming at a phenomenal pace, we would be more than happy to be the representative or agent of one of these companies. Talking about the pace of technological advancement in this field, the Chairman of Intel said that 95% of the products which Intel shipped in December had not even been designed in January of that same year, which shows just how dynamic this industry is right now. It also shows that we have really missed the boat!

On a recent flight, a CEO of a global software company asked this Beed about the potential of Business Process Outsourcing (BPO) in Nepal. He opined that in view of the political problems in Pakistan, the fear of confrontation between India and Pakistan always lurks. Therefore, having a backup in a neutral venue like Nepal seems attractive and several companies, including his, were exploring the possibility.

However, the scenario in Nepal is different. Apart from 'outsourcing' goons for political means, we seem not to believe in outsourcing. The politically active unions propagate direct employment by firms and not through an outsourcing agency. As this Beed told the CEO, outsourcing would be a possibility in Nepal if Citibank or Microsoft directly employed these workers on their payrolls, guaranteeing them minimum pay for not working, scheduled time to bask in the sun, and time off every time that they would like to celebrate Mao's birthday or a coming of age ceremony. The Indian IT boom was fuelled greatly by business process outsourcing and now countries like Egypt, the Philippines and even Eastern European countries like Estonia, Latvia and Lithuania have joined the fray. For Nepal, it seems we have missed another opportunity.

Several Nepali firms are facing the problem of employees of outsourced companies pushing to be absorbed by the parent firms. This means that the guy working for a vegetable vendor of a hotel one day may want to come under the direct payroll of the hotel the next. There are few countries where support services are ever employed directly by the parent company.

The Chinese today lament the rule of Mao that hindered their country's economic growth for many years. We will not want future historians to look back on this period of Nepali history as the time when we retarded our employment market by decades. If we do not provide the legal, institutional and political framework for outsourcing as a service industry to develop and provide new employment opportunities to the hundreds of thousands of Nepalis entering the job market every year, then we should be ready for another round of prolonged conflict.

(11 JAN 2013 - 17 JAN 2013)