"You can't fool all the people all the time..."

You're about to leave the FNCCI, what are you leaving behind?
Pradeep Kumar Shrestha: I was elected for a two-year term The constitution does not stop me from contesting for a second term but I said I would step aside and make room for the first vice-president to take over. I gave my word that there would be a consensus president because the business community needs unity. Time will show what I have left behind. In the past we had much politicking to be president but we felt that was a lose-lose situation for the community. Some people the FNCCI needed we left out by electioneering. I tried to be more accommodative and work with people who wanted to give something to the FNCCI, not just get something out of it. I consider myself quite successful and we were able to start a lot of new activities.

How would list your achievements?
Here are some: The first activity we did jointly with the Ministry of Industry and Commerce was focus on exports-the Expo 2000. Our honorary councils abroad and businesses now know what Nepal can offer. To build the FNCCI's image, we organised the Industry and Commerce Day. It will be held on 10 April every year. We tried to recognise the contribution of all those who have helped build Nepal's economy. We have become more proactive, focusing on what the FNCCI needs and wants. We've had a lot of unfortunate events in the past year-I was unlucky. But we managed to get over them. After the Hrithik Roshan incident we organised a countrywide rally to bring the nation together against the communal nature of the riots.

But you're charged with not being able to address the concerns of larger businesses, the major employers and taxpayers.
There has been no FNCCI election where we have not made news. This year there was nothing else to talk about and thus the CNI came about. It has been discussed at election time for five years. We have been charged with focussing on the districts. That is not true-I can guarantee that 80-85 percent of our work has been addressing the concerns of larger businesses. Most FNCCI presidents have been associate members. I too came from a district, because only a general member can be president, and associates can only be fourth vice president. We have to contest from the districts, Rabi Bhakta Shrestha comes from Hetauda, Binod Chaudhary came from the Kathmandu Chamber, Padma Jyoti came from Birgunj.

Large businesses face two major problems, duty drawback and export to India. Duty drawback has been pending for years now, and those pointing fingers should not forget the thumb is pointing towards them. We have taken up the issue and are confident it will be addressed. The trade treaty was signed at the FNCCI's initiative, when Padma Jyoti was president. There is a provision for automatic renewal, India is concerned about manufacturing and surge. We've visited India almost 15 times to discuss the treaty. Was that not addressing the concerns of large businesses? We were also instrumental in getting the Special Additional Duty abolished. We've been following up industrial security issues and changes in the
labour act.

Do you see CNI only as a divisive force?
Divided we won't remain a force. It will benefit nobody and is a lose-lose situation. We know we cannot stop a new organisation from being formed. But who will be its members? The CNI, with vested interests, is not going to solve the problems faced by businesses. Everybody has the right to fight elections, so why should any one feel left out. You can fool some of the people all the time, but not all the people all the time.

But don't you think issues proponents of the CNI raise about professionalism valid and the corporatisation of the institution are valid?

I would be the happiest person to see that work but unfortunately with a man who cannot stay idle (at its helm) and always needs a platform, I don't think that can happen. Managing an institution professionally is good. But to see if that is possible we need to look at how these same people run their businesses and their staff turnover.

So personally you believe the FNCCI has more promise?
The FNCCI has a future, we have the economic and political strength. There are areas we need to correct. We have an advisory board and Mr Chaudhary is a member. But how many meetings has he attended? The issues being raised could have been discussed in-house. This is not the right time to have the CNI. Let us first make one institution strong. As president it is my job to keep the family intact.

FNCCI vs CNI

The FNCCI will elect new office bearers next week and Rabi Bhakta Shrestha is to be the new president. Pradeep Kumar Shrestha, FNCCI president is not contesting for a second term, because he says, he had given Rabi Bhakta a "businessman's word" two years ago when the first vice president stepped aside to make way for Pradeep.
But even as FNCCI constituents jostle for votes to other positions, a group representing some of the largest businesses is trying to set up another institution, which it says will tackle what has left undone by the FNCCI. Leading the formation of the new group-called the Confederation of Nepalese Industries (CNI)-is Binod Chaudhary, a former FNCCI president, who feels FNCCI can no longer serve the interests of all constituents, especially large groups and those representing new
growth areas.

The business community is divided over CNI's emergence, with opponents charging it with being a "big boys" club, and even having "communal" undertones. Another charge is that it is just election-time posturing. Praddep thinks the CNI idea will die after the FNCCI elections, as similar initiatives have in
the past.

CNI proponents don't think so. They say they're trying to set up an institution that would be professionally run, would not bother with elections but devote itself to larger businesses and growth industries and complement the work being done by the FNCCI.

Chaudhary claims he stands for change, Shrestha for continuity of FNCCI with necessary reforms. Nepali Times met the two leaders of industry to talk about the FNCCI, the CNI and the charges and counter-charges now circulating.

"If you pay peanuts, you get monkeys..."

What is the CNI and why do we need it now?
Binod Chaudhary: The CNI is not a new concept, it has been debated for the last five years. People associated with the private sector in a professional manner and knowledgeable and concerned about it have always recognised the need for an organisation which would truly represent the real stakeholders.

The existing institution is not representative enough?
The FNCCI, the 50 other commodity association and 85 district and municipal bodies are all involved in economic activities. Twelve years ago, when I joined the FNCCI it had 40 district chambers whose involvement with the FNCCI was limited to attending the Annual General Meeting and other functions. The FNCCI had not been able to reach out to its real constituents. There were also associates, which included all kinds of businesses. We felt the need to support larger businesses by making the FNCCI more professional, capable of supporting potential growth areas while building up the district units.

You have visibility and respect, yet you want a new organisation. Isn't FNCCI serving you well?
Doing business is very tough today, and the community has grown substantially. All the FNCCI constituents have grown and they face different problems. The FNCCI was right to bring everybody under its umbrella, but it isn't relevant today. We want specialisation. Every business organisation has to identify its core competence-you cannot be master of everything. Garments today survive on quotas, which will be phased out and Nepali industry will have to compete with India, Sri Lanka and Bangladesh. Unfortunately, because of its increased size, there are too any demands on the FNCCI. Its core constituents are the district chambers and their needs rightly come first. Take the VAT, larger businesses pay it, smaller ones don't because. Joint venture industries have their own problems-Kodak, a brilliant example of attracting investment in Nepal had to leave. If there were issues about the extent of processing and value addition had been raised earlier, this situation would not have arisen. If the major taxpayers and employers lose confidence and stagnate because they aren't getting the desired level of support, that is bad for the country. I think it is humanly impossible for the FNCCI to provide all the same degree of importance and consistent attention. Industry needs a larger, more effective support mechanism. A stagnating FNCCI secretariat has been unable to focus consistently at all levels.

Why?
It has become election oriented. When the constitution was amended we felt it would help integrate the district chambers better. But they have become vote banks and people have forgotten winning means serving all constituents in a balanced manner.

Will the CNI have the core competence you say the FNCCI lacks?
Even the CNI cannot serve everyone, so we have to identify our core areas. Our focus will be the larger stakeholders, larger taxpayers, companies who have large investments, the ability to generate more investment, who are providing more jobs and also areas with growth potential. Financial services, infrastructure, export industries and tourism. We will reach out to countries that are our real buyers and sellers. The CNI will be professionally run and have sound corporate governance. Businesses with a corporate culture and professional management are moving forward. So business organisations that represent their interests will also have to corporatise. That will be CNI's biggest challenge-office bearers are not supposed to spend all their time running the organisation. To be blunt, if somebody can spend 100 percent of his time running a business organisation, if he has no business of his own to worry about, then I don't know how much business experience and calibre he will have. CNI members will be like shareholders, office bearers will make policy but the organisation has to be driven by professionals.

Is the CNI some sort of "big boys" club?
No. Big is relative. We want to make it a representative body of the real taxpayers, employers and enterprises that have substantial investments. Focus will be on the growth sectors and how they can add value to the umbrella organisation. We expect to make a substantial investment in running the CNI, we intend to bring in some of the best brains with credibility and a proven track record. It should be inconsequential who is leading the organisation.

Will it interface with the FNCCI? How?
The FNCCI's core constituents are the district and municipal chambers, the main channels of distribution for manufacturers. They have to be strengthened, so we can never be far from the FNCCI. We are also going to remain individual members of the FNCCI, because we have problems in common. We will keep politics, personality and ego out and electoral divisions minimal. If another organisation gets a job done that is one thing less for us to tackle.

How do you plan to structure the CNI?
We will have 100 sponsors and 300 members contributing about Rs 4.5 million as annual membership fees. This money will run the organisation. Quality service costs money. Some sections have tried to stir up unnecessary tension between the FNCCI and the CNI, but we are talking with everyone. The timing and election of the FNCCI has led people to look at the implications of their electoral pursuits-some even want us to help negotiate and consolidate their positions. We don't want to delay the organisation. FNCCI elections will be over next week and so will the confusion.

How soon will you set up shop?
Our biggest task is to identify a CEO, the membership and infrastructure issues are being dealt with, the bylaws are being prepared. We want to develop a mechanism that avoids the election process. The office bearers' role will be limited, so there will be no reason to fight. The challenge then is to identify a team of highly-paid professionals-if you give peanuts you will get monkeys.

"If you pay peanuts, you get monkeys..."

What is the CNI and why do we need it now?
Binod Chaudhary: The CNI is not a new concept, it has been debated for the last five years. People associated with the private sector in a professional manner and knowledgeable and concerned about it have always recognised the need for an organisation which would truly represent the real stakeholders.

The existing institution is not representative enough?
The FNCCI, the 50 other commodity association and 85 district and municipal bodies are all involved in economic activities. Twelve years ago, when I joined the FNCCI it had 40 district chambers whose involvement with the FNCCI was limited to attending the Annual General Meeting and other functions. The FNCCI had not been able to reach out to its real constituents. There were also associates, which included all kinds of businesses. We felt the need to support larger businesses by making the FNCCI more professional, capable of supporting potential growth areas while building up the district units.

You have visibility and respect, yet you want a new organisation. Isn't FNCCI serving you well?
Doing business is very tough today, and the community has grown substantially. All the FNCCI constituents have grown and they face different problems. The FNCCI was right to bring everybody under its umbrella, but it isn't relevant today. We want specialisation. Every business organisation has to identify its core competence-you cannot be master of everything. Garments today survive on quotas, which will be phased out and Nepali industry will have to compete with India, Sri Lanka and Bangladesh. Unfortunately, because of its increased size, there are too any demands on the FNCCI. Its core constituents are the district chambers and their needs rightly come first. Take the VAT, larger businesses pay it, smaller ones don't because. Joint venture industries have their own problems-Kodak, a brilliant example of attracting investment in Nepal had to leave. If there were issues about the extent of processing and value addition had been raised earlier, this situation would not have arisen. If the major taxpayers and employers lose confidence and stagnate because they aren't getting the desired level of support, that is bad for the country. I think it is humanly impossible for the FNCCI to provide all the same degree of importance and consistent attention. Industry needs a larger, more effective support mechanism. A stagnating FNCCI secretariat has been unable to focus consistently at all levels.

Why?
It has become election oriented. When the constitution was amended we felt it would help integrate the district chambers better. But they have become vote banks and people have forgotten winning means serving all constituents in a balanced manner.

Will the CNI have the core competence you say the FNCCI lacks?
Even the CNI cannot serve everyone, so we have to identify our core areas. Our focus will be the larger stakeholders, larger taxpayers, companies who have large investments, the ability to generate more investment, who are providing more jobs and also areas with growth potential. Financial services, infrastructure, export industries and tourism. We will reach out to countries that are our real buyers and sellers. The CNI will be professionally run and have sound corporate governance. Businesses with a corporate culture and professional management are moving forward. So business organisations that represent their interests will also have to corporatise. That will be CNI's biggest challenge-office bearers are not supposed to spend all their time running the organisation. To be blunt, if somebody can spend 100 percent of his time running a business organisation, if he has no business of his own to worry about, then I don't know how much business experience and calibre he will have. CNI members will be like shareholders, office bearers will make policy but the organisation has to be driven by professionals.

Is the CNI some sort of "big boys" club?
No. Big is relative. We want to make it a representative body of the real taxpayers, employers and enterprises that have substantial investments. Focus will be on the growth sectors and how they can add value to the umbrella organisation. We expect to make a substantial investment in running the CNI, we intend to bring in some of the best brains with credibility and a proven track record. It should be inconsequential who is leading the organisation.

Will it interface with the FNCCI? How?
The FNCCI's core constituents are the district and municipal chambers, the main channels of distribution for manufacturers. They have to be strengthened, so we can never be far from the FNCCI. We are also going to remain individual members of the FNCCI, because we have problems in common. We will keep politics, personality and ego out and electoral divisions minimal. If another organisation gets a job done that is one thing less for us to tackle.

How do you plan to structure the CNI?
We will have 100 sponsors and 300 members contributing about Rs 4.5 million as annual membership fees. This money will run the organisation. Quality service costs money. Some sections have tried to stir up unnecessary tension between the FNCCI and the CNI, but we are talking with everyone. The timing and election of the FNCCI has led people to look at the implications of their electoral pursuits-some even want us to help negotiate and consolidate their positions. We don't want to delay the organisation. FNCCI elections will be over next week and so will the confusion.

How soon will you set up shop?
Our biggest task is to identify a CEO, the membership and infrastructure issues are being dealt with, the bylaws are being prepared. We want to develop a mechanism that avoids the election process. The office bearers' role will be limited, so there will be no reason to fight. The challenge then is to identify a team of highly-paid professionals-if you give peanuts you will get monkeys.