Private sector, opposition parties, economists flay govt

Opposition parties, economists and private sector representatives have lambasted the government alleging that it ignored economic problems facing the country.
Leaders of opposition parties including the Nepali Congress and the CPN-UML held discussion with business leaders and economists on Tuesday in a bid to seek a way out of the existing economic problems.
Presenting a ´concept paper´ on country´s economy and budget issues on behalf of 15 agitating oppositional parties, former finance minister Surendra Pandey said the government had failed to boost the economic growth.
"Given the situation, it is sure that country will not achieve even 2.5 percent growth in the current fiscal year,” said Pandey.
He also clarified that opposition parties were not against announcing budget and flayed the government for ignoring the politics of consensus by attempting to announce budget unilaterally.
"The government, a coalition of UCPN (Maoist) and other Madhes-based parties have dismissed the spirit of national consensus," read the concept paper.
The government had brought one-third budget in June for first four months of this fiscal year, expressing commitment to announce full-fledged budget with national consensus.
The concept-paper also highlighted the government´s inefficiency in maintaining desired capital expenditure though the rise in revenue mobilization.
"The government has increased revenue collection but it has failed to make capital expenditure. More than Rs 32 billion has remained unspent during the last four months," stated the concept paper.
The concept paper has also highlighted the situation of weak law and order, increasing cases of corruption inside the government mechanism and slowing down of industrial sector.
"Reported irregularities at the initial bidding process of proposed Pokhara Regional International Airport and over-night decision to procure airplanes for Nepal Airlines Corporation are the major cases of extreme corruption within the government. The Prime Minister himself is not ignorant about it,” read the concept paper.
In the interaction, economists, former vice-chairpersons of National Planning Commission and private sector leaders had also echoed the sentiment expressed by the concept paper and opposition leaders.

Donors to help enhance pvt sector capacity

Amid slowing industrial activity in the country, donor agencies have expressed readiness to help enhance the capacity of Nepali private sector to increase contribution of industrial sector to Gross Domestic Product (GDP).
Japan International Cooperation Agency (JICA), the Asian Development Bank (ADB) and International Finance Corporation (IFC), among others, have separately initiated homework to chart out the modalities of support to strengthen the Nepali business community.
Donor agencies are interested in extending support for formulation of Private Sector Development Policy (PSDP), establishing private sector development forum and strengthening relations between the private sector and other stakeholders.
The government is working to bring out a draft of PSDP with support from IFC after almost two decades after the country embraced open market economy.
According to Anil Kumar Thakur, joint secretary at the Ministry of Industry (MoI), the government is closely working with representatives of the Confederation of Nepali Industries (CNI) and Federation of Nepalese Chambers of Commerce and Industry (FNCCI) to chalk out PSDP.
Keshav Acharya, former senior economic advisor for Ministry of Finance (MoF), said it was encouraging that the donors are interested in enhancing the capacity of Nepali private sector at a time when the industrial output is slowing.
Meanwhile, ADB, a regional development agency in the Asia-Pacific, has also started ground work for identifying the absorption capacity of the Nepali private sector.
Efforts aimed at enhancing the capacity of the country´s private sector are being taken at a time when the contribution of the manufacturing sector to the GDP has been decreasing constantly. According to statistics compiled at the MoF, the contribution of manufacturing sector to the GDP has just been 6.2 percent in the fiscal year 2011/12.
“The government should be able to take optimum benefit from donors´ efforts,” said an official at MoI.
JICA is working to establish a private sector development forum. Embassy of Japan in Kathmandu has initiated talks with FNCCI, the apex body of the private sector, aiming to identify possible ways of cooperation.
“Embassy of Japan has expressed interest to facilitate private sector by establishing a bridge between Nepali and Japanese private sector through JICA,” said the FNCCI official. He added that the private sectors of the two countries would have extensive discussions and communications once the proposed forum is established.
Moreover, the Japanese government has also announced that it would provide assistance to the Nepali private sector through its official development assistance (ODA).
At a recent meeting with senior representatives of the Nepali private sector, ambassador of Japan to Nepal Kunio Takahashi had indicated that Japan would initiate support especially to enhance private sector capacity through ODA.

Private sector to exert pressure for full budget

Saying that the lack of full budget has seriously hurt business activities and people´s development aspirations, the business community has decided to spearhead an ´aggressive campaign´ from Wednesday in a bid to exert pressure on the political parties to forge consensus for early announcement of the full-fledged budget.
“We will mobilize all sections of the society and would use all available ´tools´ to pressurize all the political parties, including those in the opposition, for the earliest announcement of full budget,” said Bhaskar Rajkarnikar, senior vice-president of Federation of Nepalese Chambers of Commerce and Industry (FNCCI).
The FNCCI decided to launch the pressure campaign after representatives from different business sectors such as manufacturing, trading, housing, banking and contractors, among others, expressed concerns over deepening adverse impacts of the lack of full-fledged budget in their businesses.
The FNCCI had convened the roundtable of the business representatives on Tuesday. “The meeting concluded that we should exert a severe pressure against the political parties, urging them not to politicize the budget,” said Rajkarnikar.
He told Republica that the meeting endorsed launching of series of pressure programs in favor of full-fledged budget. Under these programs, FNCCI officials said they would hold roundtable meetings with all sections of the society and lobby with the political leaders to end differences on full-fledged budget.
“We will launch media campaign and mobilize all the chambers and commodity associations to raise awareness among the people why budget is important not just for us (business people) but also to a layman in rural hinterlands,” said Rajkarnikar.
Fundamentally, FNCCI said it was not in favor or against any political party. “But lack of fiscal policy and annual fund allocations has hurt private sector operations and regular businesses. Hence, we could not remain quiet,” Rajkarnikar added.
Issuing a press release, FNCCI also urged the political leaders not to do politics on budget, which is the lifeline of economy.
As present one-third budget is going to be used up soon, the FNCCI cautioned failure of the government to come up with full-fledged budget could push the country into a fiscal vacuum. “If this happened, the country will head toward becoming a failed state,” FNCCI said in the release.
“Political settlement might take time. Taking fiscal operations into hostage for political bargaining will be a foolish thing to do,” the FNCCI has assessed, and urged all the leaders to immediately pave the way for the announcement of full budget.

Political interference, labor unrest to be blamed for slowing economy: Pvt sector

At a time when the government seeking more investments from the private sector, entrepreneurs have expressed concern over increasing labor unrest and political interference which has weakened the capacity of the private sector.
“We haven´t been able to utilize the resources available in the country given the deepening political instability and politicized institutions -- both in the government and private sector,” Suresh Kumar Basnet, said president of Nepal Chamber of Commerce (NCC) on the occasion of 60th Chamber Day on Saturday. Basnet also appealed to all the political parties to forge consensus to end the current deadlock.
Highlighting the potential for investment in areas such as agriculture, tourism, education and health, Basnet put the blame on government and political parties and their “uncooperative” attitude toward private sector for deteriorating investment climate and industrial output in the country.
“The government is only focusing its efforts at boosting revenue collection ignoring the plights of the private sector, which is the crucial component the economy. This has dashed the confidence of business people,” Basnet added.
NCC, the oldest business association in the country, is the representative body of more than 1,600 individuals and 8,000 registered firms across the country.
Suraj Vaidya, president of Federation of Nepalese Chambers of Commerce and Industry (FNCCI), said that the country´s economic issues have been put on the backburner due to the ongoing political deadlock.
“The government has given us nothing in return for the revenue we pay to the government. We want the government to be more practical and friendly toward the private sector which is an important pillar of the economy,” said Vaidya.
Business leaders have also complained about the increasing influence of political parties in business enterprises. “The rising cases of extortion and intimidation by political cadres have also weakened the morale of the business community,” Basnet added.
Industry minister Anil Kumar Jha assured the private sector that the government was always ready to provide them security and punish those involved in extortion and intimidation.
“The government will leave no stone unturned to take action against those involved in extorting and intimidating business people,” said Jha.
Business leaders also urged the government to bring a full-fledged budget in order to give a boost to the slowing economic activities in the country.
“In the absence of a full-fledged budget, we have been witnessing multiple adverse effects in the economy. Hence, all the political parties should forge consensus to bring out the full-fledged budget for this fiscal year,” said Vaidya.