Fom the US to Singapore to India, countries have for the past fifteen months been trying to deal with or stave off recession caused by the bursting of the IT bubble. Last week's bombing of the World Trade Center will hardly make things better.
Yet, Nepal's government has chosen now to wake up to the information age. This year's budget, which came smack in the middle of a global economic slowdown, allocated just over Rs 400 million to develop an information supercorridor in Nepal.
IT industry insiders are lukewarm at best, uncertain of the benefits the Park will offer, and none too confident in the government's abilities to iron out important matters.
The Ministry of Finance has earmarked Rs 120 million of the allocation to build the much-hyped IT Park in Banepa. But Allen Bailochan Tuadhar, Ceo of Unlimited, a software development company, is not excited."I don't think the private sector is interested in the IT Park in its present context, location, and size," he says.
One of the biggest grouses industry professionals have is the distance. Banepa, where the civil works on the park are being carried out, is about 40 km away from Kathmandu. IT professionals say the crowded highway and traffic would cause enormous amounts of delay for commuters, which will get worse once the Sindhuli Highway is complete, and 60 percent of the traffic going east is diverted to the area. Right now, there is little construction work going on than a wall around the future information campus, and even that will take time to ring the 12 hectares of land off. But in two years the government hopes to have the first phase of the IT Park Master Plan complete-a business block, an administrative block, and a residential block that would cater to the needs of 200-300 IT professionals.
For companies like Unlimited, which has its 16,000 sq ft of office space for its 360 staff, and is comfortably ensconsed in downtown Kathmandu, the IT park, doesn't have much to offer. "The government may offer incentives to new companies. The question is, what more can they offer us?" asks Tuladhar, who like his peers, has been stressing the need for a virtual park and not a physical park that might end up as another white elephant requiring enormous maintenance cost.
According to the IT Park Master Plan, which is being guided by Indian consultants and assisted by UNESCO, the park in its final form, including a business block that houses 5,000 professionals and recreational and housing facilities, is scheduled to be complete by 2005-depending, of course, on whether the government has the Rs 1 billion the entire project is anticipated to cost. "Of course the government doesn't have a lot of revenue and it is diversified at that, but it is committed to developing Nepal's IT sector, including the Park," says Punya Prasad Neupane, Joint Secretary at the Ministry of Science and Technology.
In keeping with its one-year-old IT policy, the government's recent budget allocation is divided into three kinds of support-in addition to the Park, Rs 200 million has been set aside for human resource development, and Rs 100 million for an IT venture capital fund. Neupane is hopeful that the Cyber Act, drafted by the government with the cooperation of the private sector, will be presented in the current session of parliament.
When the Ministry of Science and Technology came out with a national IT policy a year ago, the private sector welcomed it as visionary. The industry was pleased that the government had decided to form an IT Council under the chairmanship of the prime minister, and an IT Board under the chairmanship of the Minister of Science and Technology. The Board and the Council are to have representatives from associations like the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and the Computer Association Nepal (CAN), and also individuals from the private sector.
But their approval is tinged with doubt. "You can't implement a policy just on paper," says Lochan Lal Amatya, president of the CAN. "If the government is serious about the IT park, it should prove it to the private sector by running incubator programmes, developing research wings parallel with the development of smaller physical infrastructure and exempting duty on imports. And we need improved communications."
The government says its IT policy addresses a number of these concerns, and promises to make communication quicker and more reliable, provide an uninterrupted flow of electricity, and a separate earth station or V-SAT (Very Small Aperture Satellite), which would be independent of the Nepal Telecommunications Corporation (NTC). Also, it says the policy has provisions to exempt IT-related hardware and software from export duty.
Officials involved with the drafting of the plan also say that despite transportation and commuting problems, Banepa is an ideal site, enhanced by having Kathmandu University and a number of hospitals nearby. There are also plans to build a polytechnic and an electricity substation in the area. Two other roads are being constructed that would connect Banepa to Kathmandu via Jorpati and Banepa to Gwarko which in the long run would lessen the pressure of traffic. "It will take some years for those roads to be complete. But the present road could be turned into a double lane road which would bring down the commute between Kathmandu and Banepa to 20-25 minutes, half the time it now takes," says Neupane.
The government is working out the operational modalities, says Neupane, but he suggests that when the Park is ready the government will play only a support role." The government is looking at the Indian experience, of IT parks in Hyderabad and Bangalore, managed by international companies. It is also looking at the possibility of running it like the Nepal Tourism Board-as a government and private sector partnership. "Maybe it's too soon to say," says Neupane.
The private sector says it is never too early to discuss these matters. They have been urging the government to keep an eye on international markets to see what specific direction the young IT industry might develop, to keep afloat even through a global downturn. Industry professionals tells us they are sceptical about the government's understanding of the future of technology. A case in point, they say, is that the IT policy, drafted in more encouraging times, has not been reviewed. The government sat on the final policy document for over 14 months before announcing it. Meanwhile abroad, the information markets went into a downward spiral. Even companies in Nepal folded, putting between 500-600 people out of jobs.
IT may not seem huge right now, but it is one of the few industries that provides mass employment to the educated and is the second biggest source of revenue after the alcohol industry, (in terms of income tax on salaries and on Internet and VSAT services). But if the government is to achieve is goal of Rs 10 billion in IT-related revenues in the next five years, government officials need to keep their ear to the ground and be flexible.
But even with the best of intentions, some goals may be virtually impossible to attain-like that of achieving computer education for all by 2010. Given that another government slogan is "literacy for all by 2020," that may be a little difficult.