FNCCI’s masters

The Federation of Nepalese Chambers of Commerce and Industry (FNCCI) will soon elect its new senior vice-president (who is president elect by default) through its 54^th general assembly. The private sector’s apex body has been struggling to establish itself as a professional corporate entity due to a perpetual shortage of capable leadership. The leaders the FNCCI has gotten over the past two decades have been more oriented towards pleasing their political masters than in establishing high standards of corporate governance.

Rather than speaking the industry’s voice, the FNCCI is consumed with fulfilling the interests of its leadership. For instance, the Federation of Indian Chambers of Commerce and Industry (FICCI), India’s private sector’s umbrella agency, has ‘Industry’s voice for policy change’ as its motto. The FNCCI lacks any such guiding principle. 

The federation has seen little growth in the past three decades since the opening up of the economy and reforms in 1990. Since its establishment in 1966, up until 1990, was the time for the organization’s institutional development. Yet, even after 1990, the FNCCI has had little to show for it. Its past presidents like Mahesh Lal Pradhan, Padma Jyoti, and Binod Chaudhari gave the institution some shape. But recent leaders such as Kush Kumar Joshi, Pashupati Murarka, Suraj Vaidya, and Bhawani Rana have done next to nothing to strengthen the capacity of the private sector and empower domestic investors. 

The FNCCI leadership has instead used the organization to curry favors from those in power. Suraj Vaidya became the coordinator of the Visit Nepal 2020 campaign, no sooner than he had completed his tenure as the FNCCI president. Likewise, Kush Kumar Joshi was able to get the ‘Kathmandu-Hetauda Tunnel Highway’ project immediately after the end of his term. In both cases, there was simply no match between the person’s expertise and the projects they later received.  

The FNCCI could have, over the years, pushed political leaders to adopt the right set of policies that favor industrial development in order to achieve higher growth and to create jobs. Yet the focus of the FNCCI, which has a nationwide network through its district-level units, has been on lobbying for higher margins in foreign trading business of its leadership, thereby eroding the private sector’s credibility. “The FNCCI has failed the country by limiting itself to being a lobby group, while the expectation was that it would contribute to industrial development and economic growth,” shares Pushpa Raj Acharya, former president of the Society of Economic Journalist-Nepal. “The golden opportunity for creative transformation of the private sector has been wasted in the past three decades,” he adds.

The 54^th general assembly was scheduled for March 2020, but was postponed due to the Covid-19 pandemic-induced lockdown. It has now been postponed again, due to internal disagreements within the FNCCI. Whenever the general assembly happens, all those contending for new FNCCI leadership positions have already shown enough evidence of groupism and vested interests. In other words, we cannot expect much from whoever leads it next.   

Raghuram Rajan, an economist and former governor of the Reserve Bank of India, points to three pillars of national development: state, market, and community. He argues that if the market colludes with the state then the community fails, causing people to suffer. This is exactly what is happening in Nepal.

Looks like the private sector will have to wait a long time before it gets capable and visionary leaders. 

This article was published in The Annapurna Express.