Private sector says no to 'socialism-oriented economic model
KATHMANDU, July 17:
With the draft constitution defining the economy of the country as socialism-oriented and recognizing cooperatives as its third pillar, the private sector has raised its serious objections. There is no point taking to socialism, which is no longer relevant and has already been abandoned across the world, it is pointed out.
Article 54 of the draft constitution says that the country will develop a socialism-oriented economy, but there is no clear definition of this.
"It's contradictory for Nepal to embrace socialism at a time when China, Cuba and Russia have already abandoned it and moved towards an open economy with liberalization," said Hari Bhakta Sharma, senior vice-president of the Confederation of Nepalese Industries (CNI). Nepal adopted a liberal economic model after the political changes of the 1990s. But economists and the private sector say the draft constitution envisages an inward-looking model and intends to limit the scope of foreign investment.
"This is the era of interdependence and liberalization and the country can benefit if it becomes competitive rather than following a socialist economic model that is inward-looking," said Madan Kumar Dahal, an economist.
Posh Raj Pandey, another economist, said, "The neams of production can no longer be under the ownership of the government or the community." There are other clauses limiting foreign investment only for the sake of import substitution and export promotion.
Economists and private sector circles say the country can adopt a liberal economy and an open market, with the government collecting taxes and running social welfare programs.
Meanwhile, lawmakers have already reached their constituencies to collect feedback on the constitution draft. CNI's Sharma said they will soon submit a memorandum to the CA chairman.
"We demand that the government recognize wealth creation and one can only ensure justice to everybody through social welfare programs if the government has enough money in its coffers," he said.
"The draft constitution has attempted to break away from the reforms of the past two and a half decades," said Sujiv Shakya, CEO of Beed Management Private Limited, a management consulting and financial services firm.
The draft document also states that a company should have a trade union representative on its board. Many have taken this provision as being meant only as a negotiating tool for political forces. Such provisions could have been mentioned in the acts and rules rather than in the constitution, Sharma said.
Economists and private sector leaders said that cooperatives cannot be a third pillar of the economy after the public and private sectors. The private sector also demanded that citizens should be allowed to engage in business and choose their calling and there should not be free flow of goods across the states without taxation.
CPN-UML leader Surendra Pandey, responding to the doubts and suspicions of the private sector, said,"The private sector should not fear that it will be restricted in doing business." He said, "We have seen the private sector flourishing in China, though it has a socialist economic model."
Source: Republica
