Policy instability hits private sector hard
KATHMANDU,FEB 2:
The experts attributed confusing policies, rigid regime and age-old regulations as factors hindering the private sector from flourishing.
“Instead of facilitating the private sector, the government has created confusion by dividing the private sector into cooperative and private enterprises which has sent out wrong messages,” said economist Dr Chiranjibi Nepal, during the launching of ‘Economic Growth and Private Sector of Nepal’, a publication of Samriddhi-The Prosperity Foundation, here today.
The book that comprises a series of articles written by experts on various topics ranging from fiscal policies, monetary policies, export diversification, competitiveness, democracy and economic growth, financial markets, trade agreements, investment environment, foreign employment and remittance attempts at addressing a range of issues concerning private sector in relation to the achievement of economic prosperity.
“The policies and regulations governing industries, investment, and labour have not been revised since 1990 which has shackled private sector development in Nepal,” pointed out Dr Nepal. “The country that does not comprehend the importance of private sector can not prosper,” he said, citing the example of communist China. “China has emerged as the leading economic powerhouse after its realisation to this effect.”
He expressed that private sector does not comprise only of private enterprises but the farmer tilling a small patch of land and hospitals and primary schools are also private sector.
Similarly, banker Siddhant Raj Pandey — one of the contributors of the book — pointed out Nepal could not attract much foreign direct investment even after economic liberalisation due to rigid capital account convertibility.
“India strengthened its macro economic stability and brought in policy reforms to make it attractive investment destination but Nepal does not have what it requires to draw foreign investment due to political climate and tax laws,” he added.
Hydropower entrepreneur Gyanendra Lal Pradhan emphasised that Nepal can not afford to consume imported fuel for long. “Moreover, firewood, which is the largest source of energy in Nepal, is also unsustainable,” he said, adding that at present wood is the source of energy worth 1,800 MW. “The financial climate has to be made right for the hydropower projects so that potential can be exploited,” he suggested.
Other contributors of the book former governor Deependra Purush Dhakal, deputy director of FNCC Ratish Basnyat and senior economic journalist Prem Khanal also spoke on the occasion.
Source: THT
