Nepali Times
Economic Sense
Private initiatives


Desperate times need desperate measures. Last fortnight there was a rather hectic pow-wow between industry captains and business organisations that gave the government one message: take business seriously or else. There's plenty going on-the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and the Confederation of Nepalese Industries (CNI) have been having many chats with the government and political parties, and bi-national chambers are actively seeking the support of diplomatic missions to make the government hear what they have to say.

A quick recap of recent developments of significance to industry: you will all remember that the Beed was much amused in a disgusted sort of way by the promulgation of the Income Tax Act on April Fool's Day; various laws have been amended, and in a month or so, we are told, an industrial policy will finally be pushed through as an ordinance. The security situation and grim economic scenario are the reasons that the government gives for many of these changes. Fair enough, but this is the Beed's question: can they get anything right? Astounding as it may seem, many of these changes are likely to simply mire Nepal deeper in the economic doldrums. Government has been squeezing genuine taxpayers in its quest to fund the ever-increasing revenue-expenditure gap. The diktats of revenue department officials are economic irritants. Worse, they are myopic shortcuts that do nothing more than secure the jobs of these officials. Collecting more taxes from honest taxpayers is an easy way out, but the only real the way out of this mess lies in formulating conducive policies for business and industry.

The business community for its part needs to realise that unity and a common platform are the important things now. It isn't in the least bit important whose names go on reports or who goes to submit the drafts. What is important is action. Recommendations to the government need to be prescriptive, things that can be acted upon immediately. Reports need to be translated into specific legal words of amendments to legislation. For instance, the business community needs to work very hard to bring about specific structural and procedural changes in the revenue collection department, and the hiring of its staff. It must be made clear that the department can't be treated like a privy purse for political loyalists. Also, English-language reports may serve the donor community well, but for real change, the language of the law is Nepali. Bilateral and multilateral agencies for their part can make the implementation of certain changes covenants to the next set of grants.

Economies move in cycles, and even if we are approaching our lowest point, eventually we will come back to life. And in order to truly take advantage of that, we must prepare for it now. The budget that the next elected government presents will be vital. The government needs to sit up, take business seriously. And a good start, at least in the public eye, would be if the prime minister, while reading out a speech, got the name of the FNCCI president right.

(11 JAN 2013 - 17 JAN 2013)