 MIN RATNA BAJRACHARYA |
Early this week, Nepali Times and Himal Khabarpatrika, organised a discussion session on the upcoming national budget with leading businessmen (yes, they were all men). The session turned out not so much about the budget as about what the businessmen want the government to do and be. They want it to make and enforce rules in a transparent and predictable manner. They want it to be an umpire in the competitive game of business. They do not want it to be both the umpire and a player as it often is in Nepal.
The rest, the businessmen said, they can do themselves: whether it's finding new business opportunities, or lining up finances, or offering competitive services to urban and rural customers, or partnering with international firms to offer better products domestically and globally.
Should the new government, which is about to be formed in a few days by the Maoists, pay attention to what the businessmen want? Yes, as these three examples amply show.
Exhibit 1: In the late 1980s, India was not the country that enjoyed over eight per cent growth per year that we know of today. All business-related changes required bureaucrats' approvals, and India's then leading businessmen spent more time visiting politicians than customers. There was no such thing as the great Indian IT industry. By contrast, with guidance from foreign managers, Nepal-based IT programmers were already making and selling software abroad.
In 1992, some of them introduced email technologies, which they started selling commercially, even before Indian businessmen did the same in India. And in 1995, The Kathmandu Post became the first newspaper in Asia to upload its contents everyday for distribution on the worldwide web.
The dispersion and the use of these computer-enabled communication technologies grew in Nepal not because of directives from the Ministry of Communications but due to the ingenuity of Nepali businessmen who sought profits by offering new services that customers bought.
Fast-forward to 2008. The government controls all the licensing processes that go into the development of Internet-related infrastructure. What's more, to sell Internet-services, it competes for customers with private-sector players. No wonder with the government's playing the role of both the controller and a player with advantages, its attention is diluted, and its pet project, the so-called IT Park, grows grass, not software, in Banepa. Today, the vast gulf between the achievements of the Indian and the Nepali IT industries is plain for all to see. As we all know, the government mostly stayed away from being a player in the IT industry.
Looking back, if only our government had limited its involvement in the IT sector to the role of an umpire, who knows what further innovations our competitive businessmen could have brought faster to spread the use of IT all across Nepal at affordable rates?
Exhibit 2: Whenever Nepali newspapers talk about the blacklist of bank defaulters, they neglect to mention that the defaulters owed money primarily to government-run banks. Privately-run banks are better at collecting dues, and doing more with less, simply because they are answerable to specific owners who want profits.
By contrast, every time the Prime Minister shuffled his cabinet, a new set of masters was thrust upon government-run banks, which, over time, learnt to give out loans based on which borrower knew which higher-ups. Is it any wonder that wonder that the government has kept two of its flagship banks into receivership for the past several years? Again, there was this confusion about the government's role. In the name of providing banking services to the poor, should it remain a player in the banking sector? Or, would it have been better off putting state-run banks in private hands so that the government could concentrate on ways to make it easier for financial institutions to provide new and better services to more people? After all, it remains that half a century after banks were introduced in Nepal, only 33 per cent of the population makes use of some form of formal financial services.
Exhibit 3: Recently students at state-run schools across Nepal have turned into rioters. Their complaint is that they did not receive textbooks in time to start classes and to prepare for exams. The students know that passing exams and getting through school are two conditions for success in today's world. But their anger was not directed at textbook stores or schools but at the government which monopolises the business of printing and distributing textbooks.
It's sad when young students have to go on a rampage and block highways to demand to buy textbooks. The government's not so agile that it could even think about putting the textbooks online or speeding up the distribution process through other channels. But this is what happens when it refuses to focus on the big picture (i.e. making sure that Nepali students know their three R's well), and gets caught up in the minutiae that could easily be handled by private firms.
The businessmen at the Himamedia discussion session were all veterans of the Nepali industry. They have dealt with governments of all eras of Nepal's recent 50-year history: pre-Panchayat, Panchayat, post-1990, former king Gyanendra's absolute rule, and the present interim one of post-Jana Andolan 2. In all cases, with varying degrees, they found the government of the day having a narrow worldview of the world of business-seeing businessmen as either exploiters or cows that could be milked endlessly. Despite paying lip service to satisfy reform-pushing donors, no government has accepted the business sector as the engine of growth and a source to generate employment.
On the eve of the Maoists' takeover of the Nepali government through the strength they showed at the ballot box, it's worth highlighting the collected wisdom of businessmen: for the growth of New Nepal's economy, let us learn from the mistakes of the past. And the best way to do that is to let the government be clear about its limited and transparent role as an enforcer of rules or as an umpire. Let it not meddle into the game of business as a player. Else, to play on an old joke, 'Nepal is a country full of potential, and it will always remain so.'
