Nepali Times
Strictly Business
Ecosystem Nepal


INSEAD students before they set out on a social entrepreneurship trek around Pokhara

In early July, Entrepreneurs for Nepal – an organisation of Nepalis who promote an ecosystem for entrepreneurs through discussion series, networking events, boot camps and advisory help – hosted a group of MBA students from the Singapore and France campuses of the INSEAD Business School. Led by Professor Mahmood Mahboob, the students were in Nepal for a week to explore potential areas for social entrepreneurship.

In the course of their activity-packed visit, the students visited NGOs in Kathmandu and Pokhara, interacted with farmers to understand how agricultural value chains work from procuring seeds to selling crops, visited communities to see how water distribution and solid waste are managed locally, met with some of Kathmandu's leading businesspeople and social entrepreneurs, and got a sense of how, despite seemingly unending political problems, it is relatively easy to do business in Nepal.

On the last day, the students made a presentation, from which four issues are worth discussing further: (i) challenges for development, (ii) the markets that surround Nepal, (iii) how Nepal can promote a Nepal-specific brand to drive growth in tourism, agriculture and hydropower, and (iv) how private equity funds can be set up to finance development work.  

Development challenges:

These include political instability, mismanagement of human resources, and a growing dependence on aid. When politicians quarrel for days on end over who's going to head the government, and the bureaucracy, civil society and the media are reduced to being mere spectators, it signals that those who are supposed to lead the country lack direction themselves.

Without raising literacy levels to produce a skilled workforce that in turn helps create jobs locally, going abroad to work will always be a priority for Nepal's talented youth. And successful variations on the aid model work best as ways to prime the pump, to transfer know-how, and to get things started locally. When aid uses the same set of interventions for many years, Nepal's transition from an aid recipient to being aid dependent is characterised by a general lack of accountability, thereby providing a disincentive to start companies that create jobs. 

Markets all around:
Development elsewhere affects Nepal, and there are some positive trends. The rise of China and India opens up opportunities for Nepal in ways Nepal has yet to exploit on a nationally coordinated level. The Gulf and the Middle East, only five hours away from Kathmandu, are growing in terms of population and economy. They are another untapped market for Nepali goods and services. The rest of Asia has populations that are now more prosperous and want to visit new destinations. Besides, the globally growing interest in organic food, green lifestyles, and sustainable commerce play to Nepal's potential, just as the shortage of electricity in the region lends an urgency to turning Nepal's hydroelectric potential into commercially viable services.  

Credible Nepal:

Nepal does a poor job marketing itself to the world. In many cases, it lets other people define what it is. But Nepal has certain characteristics, of which Nepalis are justifiably proud, and which ring true to visitors. These characteristics can be used when developing a sort of Brand Nepal that imparts Nepal-specific images, feelings and values to customers worldwide.

Sherpa Adventure Gear has done just this. This apparel company has taken the story of what's unique about Nepal and married it to western retailing practice. Its products appeal to customers whose idea of Nepal is a series of adventures in the mountains. Similarly, given the growing demand for sustainable tourism, Nepal could carve out a niche by using Green Nepal as a way to appeal to tourists who value greenery and nature over conveniences found in hotels in the concrete jungle.

Nepal Development Fund:
A fund worth several million dollars could be set up, either by mobilising domestic resources or with international partners, to invest in entrepreneurs who are working on areas that have the potential to make economic transformations: agriculture, tourism, hydropower, renewable energy, and the like.

One caveat is that such funds, like many donor-supported incubation centres and venture funds, often fail because they are likely to be led by accountants and look-alike mainstream company professionals who are so afraid of failure that they play safe and end up hurting the very goal (i.e. promote innovations) for which they work. If this problem can be addressed by getting a mix of skill sets on board, such a fund could take calculated risks that identify areas for growth, promote entrepreneurship that creates returns and jobs, get involved in the management of some of the companies it invests in, and overall, help strengthen the ecosystem for doing business in Nepal.

A week was too short for the students to delve into the details. But their presentation provided a snapshot validation of what local entrepreneurs feel represents Nepal's challenges and potential.

Mind the children, INDU NEPAL
Valley belly, BUDDHA BASNYAT

1. apsu
isn't mba almost opposite of entrepreneur? google, facebook, linkedin, intel, microsoft .. none of these were started by mba? mba are trained to be money managers (only?) which is detriment to themselves to be entrepreneurs.

2. lalu parsad

entrepreneurship and financial acumen is a different thing. eco-friendly entrepreneurship in tourism in Nepal has tremendous opportunites. what people really need is easy business registration, and simple shareholder (ownership) rules.

MBAs, NGOs, and foreign aid areĀ  not important here.

3. Sargam

Ecosystem Theories and Management

It dawned on me as if I were slated for escalating trend of events as well as to right the wrongs in the clutter of aberrations that we feel and witness everyday around us. And it might sound cheap but you will find down the road that it is most definitely not.

Evidently, we have different backgrounds as such we forcibly don't agree on much. But I have sort of a sneaking feeling that there is an avalanche heading our way because day after day we come to notice as to how fast things are coming apart at the seams.

In fact if we cannot afford to pick and choose in an attempt to staving off the time and meanwhile we are incapable of supplanting those outdated thoughts and conservative ideas that ruined our financial and economic strongholds, our quest for the ring of truth to it has yet long way to materialize before we could prove it scientifically that all these past years we were deliberately in pursuit of chimera which led us straight to a collapse as it happened of late.

It comes therefore to the decision-makers of Ecosystem Theories and Management to hip and hype up as to why the illusions of always building up a little nest egg are proved to be unyielding and devoid of sense. Are we bound to believe in Murphy's law or tentative fourth law of thermodynamics according to some of those decision-makers behind the aforesaid Ecosystem Theories and Management (actually there are supposed to be only three that I still remember)?

Murphy's law states, " If anything can go wrong it will." Could we not simply look for the silver lining in our thoughts and deeds, and start everyday the Almighty has granted us with a right attitude?"

At times, when a guy used to perceive MBA (Master of Business Administration) degree as a jackpot to earning the highest emolument and reaching the summit of glory, and to be propelled to the most fortunate status to mint a hunk of dough has become a mere subject of mockery.

Point of fact, the way the Wall Street shysters treated the Main Street stakeholders by ripping them off in daylight playing freely with the deposits of commoners on the worldwide open casinos is simply inadmissible. But some of the most famous amongst them, namely, Goldman Sachs was coddled as if it had every right to fan the embers of global sputtering economy and went free of sequel to redo the same old business as usual.

As of today, the new generation is experiencing the most strident recession, and doesn't think of going through the same rigmarole repeatedly.

As such after Reaganomics as well as Thatcherite outrageous dogmas of financial deregulation and monetarism advocated by Milton Friedman and Friedrich Hayek culminated in the highest peak added by some hazardous events such as the unexpected fall of the Berlin Wall on November 9, 1989, those neo-liberals were having the wind in their sails to seize golden occasions to have their places in the sun by flourishing their businesses to make fast and easy money in those formerly communist countries which never had experienced any sort of prosperity neither material nor an ounce of satisfaction to be the lackey of the defunct USSR.

In a political culture enthralled with novelty and desiring to get past the past, former communist countries became the focusing point for worldwide development for all those who were in favor of free trade; they punctuated as to why not go global instead of just the USA, the EU, South Korea, Japan, and Australia to cite the main ones.

Without flinching all got the nod for globalization. Everybody thought there is lots of money to earn and for that the most suitable formula was 'Go East', and there were many gung ho candidates fit for a new and modern adventure.

Let us see how the Fed (Federal Reserve Bank) enacted, triggered by Alan Greenspan, the former big shot of the Fed, and the following adage has been added to his infamous glory: " If folks cannot have higher income, let us give them debt." Under his chairmanship of machine for purchasing anything on credit, Americans became the champions of all categories on spending binge.

Which is why, those lavish sums spent by the US and the EU citizens went straight into the treasury of China, much less into that of India and other Southeast Asian countries. They could make dumping not only of their goods of minor quality but became prosperous with the amount of money they shoveled up as if the West was the cash cow of rest of the world. Plus they were so glad that at last they could amass fortunes when outsourcing of administrative and insurance jobs started to inflow without any checks and balances.

When China amassed sufficient reserve of US$ (2.2 trillion approx.) they began singing the same hackneyed refrain in order to harping on the USA by using all available tricks of which they are so much accustomed to, i.e. threats and intimidation because they hold with Japan about 47 percent of US debt..

The other day an American society specialized in manufacturing the interior cladding of cars was very reluctant to lay off 1,000 of her employees so that she could install her factory in India where an average worker is paid a salary of all in all 69 euros. The same jobholder in the Occident earns a lump sum of 1,500 euros plus about 50 percent of extra charges, i.e. the boss pays in total about 2,250 euros from his pocket (social security, income tax and miscellaneous expenses included.)

In the same manner, a pair of sneakers of great Trade Mark* such as Adidas, Nike and Reebok is paid around 110 euros whereas when it comes out all finished from the factory in China it costs hardly about 12 to13 euros free on board (FoB), and a jobholder is paid around 120 euros/month who is liable to work 12 hours/day and six days out of seven in a week..

Admittedly, countries like China and India are happy to take profit out of free trade. Not only it attracts foreign investments and creates millions of jobs for their inhabitants to the detriment of the Occident and never had they become as prosperous as today thanks to free trade. But in this process how many people were laid off in the West?

If the West does not invent new jobs of very high quality in the field of nanotechnology, ecology-friendly energy, bio-diversified agricultural and scientific domains par excellence nontransferable the toll of joblessness will be so high and out of control that a social agitation is for sure on the way of making. So why for the sake of social peace and harmony it is urgent that the politicians had risen to the occasion to remedy such deleterious and degrading industrial comedown..

At the glorious epoch of all liberal economy, almost every other day The Wall Street journal and The Financial Times used to throw stink bombs onto the European continent as well as those countries like India and Brazil which were still dragging their feet in Dad's socialism..

As of now, Anglo-Saxons' hubris of past went down the drain. The corollary of this was the sudden understanding regarding the Social-Democrat Europeans that what they were doing respectively in their countries was not all that bad. Their slogan is: "The citizens should be the center of our politics not the fluctuations of the Stock Exchange", and they resisted far better the financial and economic downturn if we take them comparatively.

Alan Greenspan and the then Chancellor of the Exchequer Gordon Brown who were the main actors who triggered the so-called expansionist politics of the USA and the GB respectively came to realize that their financial and economic policies were leading us headlong to the wall.

The subprime scandal where bankers and traders made their earnings betting that the housing market would tank and suck millions of Americans into the maw of foreclosure and sudden bankruptcy of Lehman Brothers as an icing on the cake awakened them from their torpor which found themselves hanging their heads with shame and irritation.

Invariably, there are people who take immense pleasure to warn the Occident by exaggerating as to how India and China could become two Asian mastodons. How come is it possible to compare the salary of a worker in China and India with that of Western Europe or North America?

Maybe India and China which have each 1.2 billion and 1.3 billion of population, each one could become credible for making a decent GNP by means of addition of more number of jobholders but those EU citizens about 500 millions including Norway and Switzerland and the US citizens with about 350 millions weigh comparatively more than 15 times the GNP of aforesaid two countries each taken apart.

Logically nothing is comparable.

We should be happy that these two giants could stand up on their own feet regardless of so many hardships. But one experienced and shrewd eye can observe without fail that just by manufacturing imitated hardware and software one cannot surpass the Occident. First they must feed their people then invent things of their own. Until then it will be a long time before they make up the lost time.

Every capitalist that respects himself either that of the Occident or the Orient dreamed of manufacturing goods in countries with low-cost and make a huge benefit by selling them in the Occident with higher purchasing power.

They did not see the pitfalls.

If they want to continue the same old things it is imperative and fitting that the Occident should be on a constant creation of new jobs to maintain the same momentum and number of consumers. Otherwise they cannot buy the products manufactured in China and India, and other low-cost countries.

Undoubtedly, the economists are more or less of the belief that some extra carbon (CO2) tax ought to be restored on those goods which make a long travel to reach their destinations. That way the sea carriers used for exportation on a long range and trajectory must pay carbon (CO2) tax in order to mend damage caused by polluting atmosphere of the oceans. Moreover it can be at length worthwhile to reduce the influx of merchandises into the Occident..

Only those goods unavailable in the West shall have an easy access and simultaneously emerging countries must make efforts to accept some of those high quality goods manufactured in the most advanced countries to keep balance at an acceptable level. In addition, these countries are bound to purchase advanced technology if they do not want to lag behind.

If the inhabitants of this planet do not pay heed to those seemingly easy going but cruel competition of trade transactions in an inexhaustible race against the clock, one day everybody will live to regret it.

4. Arthur
"A fund worth several million dollars could be set up, either by mobilising domestic resources or with international partners, to invest in entrepreneurs..."

Never mind actual businesses producing goods and services and selling them. Let's just setup a fund to invest in "entrepreneurs".

How typical of "brand Nepal"!

But really, shouldn't there first be an NGO to engage in awareness raising and capacity development for such a fund?

Ashuosh Tiwari could be CEO of this "social entrepreneur" and write wonderful reports with all the right buzzwords for "international partners" about how "the globally growing interest in organic food, green lifestyles, and sustainable commerce play to Nepal's potential".

5. Artless
India is fighting with their Maoists with "holistic development".

Why shouldn't Nepal learn from Manmohan Singh about holistic development in Nepal along the lines of promotingĀ organic food, green lifestyles, and sustainable commerce?Ā 

6. Rauniyar
Ashutosh, you write good, or at least seem to think so.

Do you execute any, though?

(11 JAN 2013 - 17 JAN 2013)