Writhing under the ongoing recessionary phase, the business community of Nepal is also in such a mess that it cannot look forward to any help from the political leadership which has now been deeply bogged down in political manoeuvring. However, to view that the situation would have been better had there been no such political problem as of today, is becoming very naïve. Contrary to the rhetoric, economic revival has always been accorded a low priority by the government before or after 9/11 or Maoist insurgency, as seen from the following facts.
Several rescue packages have been announced by the government on different occasions for different industry sectors or for the entire economy. Barring a very rare few, non of these packages have been implemented. Worst still, some of the packages are fundamentally wrong in principle. Take, for example, the package to rehabilitate the sick units. It is based on the ideology of rewarding the inefficient. The other surprising fact is that the Nepali business sector is very much insulated from the political development. To say that the growth of Nepali economy is constrained by the political uncertainty is a misconception. Nepali economy can grow even with political uncertainty. The more important bottlenecks lie somewhere else.
Investments are being held back not because of the coming general elections, but because the required legal environment is not yet in place. It has been nearly two years that the new Companies Act was started to be drafted. It is still being drafted. One most recent example of the lack of a law is the project of a non-resident Nepali in Canada to set up an international level IT institute in Nepal as a non profit organisation autonomous from government intervention. Since there is no law to allow for such an institution in such a big scale, the commencement of this project is going to be delayed at least six months from the date the elections are to be completed. The Industrial Policy and Industrial Enterprise Act of 1992 have been reduced to just pieces of paper as almost all of the provisions in them have been nullified by one or the other amendment in different laws. If these legal documents are in place, some of the investment held back right now would be released even before the coming elections.
Much to blame for this situation is the business community itself, which is holding the development at bay by not coming forward with enough professional acumen to get through what is really needed for the growth of the economy. There are enough examples to show that the leaderships in the private sector organisations are concerned more with their own respective business interest than with the collective good.
It is high time now for the private sector to realize that.