What ails Nepali business and economy?

The biggest challenge businesspersons and industrialists face in operating their business is the lack of cooperation from the government sector. The private business sector is often made a scapegoat.

Photo: Freepik

Komal Prasad Mainali

  • Read Time 4 min.

Many Nepalis are still in poverty. They are living without proper access to education, health, safe drinking water, nutritious food and a decent place for living. And because of the lack of gainful employment opportunities, many have to migrate overseas to work in dangerous jobs. The state is barely present in these areas and the people feel helpless. 

We all should feel responsible towards the country from our own side and serve it by rising above selfish interests. In this regard, I have spent 30 years of my life in various businesses and would like to share my experience for the economic enhancement of the country. Out of the 30 years of my business experience, I spent 22 years in the furniture business and have also been engaged in the construction sector for about 10 years. I would like to share some prescriptions for the development of the Nepali economy based on my experiences.

There was a famous saying of Hariyo Ban, Nepalko Dhan meaning green forest is Nepal’s wealth. The irony is that we have not been able to preserve that asset and have to import timber from foreign countries. It is unfortunate that the lush green forests and their herbs have been destroyed through the nexus of forest smugglers, politicians and bureaucrats.

Underused resources 

We have not been able to undertake tree plantation drives in degraded lands at the rate that is essential. We have not been able to manage the trees that have naturally fallen and are in the process of decay. Thousands of hectares of forest have been destroyed by fire each year largely due to the failure of the state to prevent fire. 

The government could lease land which is not suitable for farming to grow herbs and trees so that those involved in the enterprise can reap commercial benefits out of it. A variety of trees should be planted on a commercial level so that the forest-based industries can be sustained from the resources of Nepal. The commercial cultivation of herbs is another area which can benefit the farmers and the government. This is true as the demand for Nepali herbs is quite high internationally. The herb cultivation should be done in an integrated manner with herbs processing and medicine manufacturing plants being established along with the cultivation. 

The forest products have been illegally sold to India through various border crossings.  Lately, it has not been used in a sustainable manner and we have to import timber from abroad by paying international currencies as there is no plan to use the Nepali timber that can be used from fallen trees.

There is a need to upgrade the capacity of the private sector in utilizing our forest resources. We have not been able to chemically treat softwoods available in Nepal to use them for a long period of time and to increase their strength. If we can do that, we can use such wood as the frames for our doors and windows. This would decrease our dependence on foreign timber for purposes requiring hardwood. Nepal Timber Corporation and the private sector can work together to increase the utility of the forest resources available in Nepal. 

If we can agree on a long-term plan to use our forest resources sustainably with the involvement of experts, bureaucrats, industrialists using forest products, and politicians, we can increase our national production, increase jobs, preserve our forests, and fight climate change. 

Hurdles of business

The biggest challenge businesspersons and industrialists face in operating their business is the lack of cooperation from the government sector, primarily the bureaucracy. It is easy to make the private sector scapegoat in every affair. There is a tendency in the bureaucracy to put the businesses on a weaker footing in legal documentation and then extracting from them to fulfill their vested interests. This has created a situation where the businesses lose their self-esteem and a fair operating environment and the government suffers the revenue loss while the bureaucrats benefit from the underhand payments they forcefully collect. 

It is difficult for businesses to profit in the first five years of operation. Government should provide them some concessions for that period so that they can create a situation where more employment opportunities are generated and more taxes can be paid later on.

A furniture business person shares his experience of doing business in Nepal while also offering a way out for the national economy and development.

Private businesses are forced to pay to the politicians and the local trouble creators to protect the business. This is illegal but the businesses are forced to pay the money anyway. The situation at the customs is pretty bad as bureaucrats use the agents to show non-existent problems in the documentation and extract underhand payment to clear the imported goods. Banks increase interest rates at their whims and transport entrepreneurs use a syndicate to jack up the prices of transporting goods. All of these factors make it difficult for businesses to operate.  

Our country cannot be self-sufficient only by increasing the taxes on imported goods and the government revenue. We need to have an overall strategy about the products which can be easily produced and others which we will produce to attain self-sufficiency. Our industries need to be made more competitive and we need to replace our imports and increase our exports. 

We also need conscientious politicians, bureaucrats, and businesspersons to execute those plans and take the country forward in the path of development and prosperity. We cannot remain in the sorry state we are in at the moment forever. 

Komal Prasad Mainali is a furniture entrepreneur who is also involved in a business dealing with construction materials.