The graph of the economy indicates that the industrial sector of the country is moving towards development while giving a ‘green signal’. The private sector believes that the budget and monetary policy brought by the government to help in economic growth along with the amendments in the policies and regulations that make it difficult in the business course will definitely have a positive impact. However, even if this is not enough, there are places where you can feel that ‘something is happening’.

Today, businessmen invest only after studying all aspects of the market, demand, consumption, etc. However, if one area is considered good, then it is time to consider such aspects. The potential for tourism in Nepal is strong. Although it seems to be ‘over-supplied’ at present, if the movement of tourism increases, the current physical resources will not be enough.

As the number of tourist destinations increases, the number of tourist arrivals will automatically increase if the infrastructure and hotels are being built accordingly. It is not enough just to look at the data of history. Now we have to be able to meet the demand and production of the future. We should think about how to increase the number of tourists to 30 lakhs in Nepal, which is 10÷11 lakh tourists annually.

People from India and China have higher personal incomes. With the visa facilitation, a large number of citizens of those countries are going to visit countries including Thailand. If they can be given concessions accordingly when they come to Nepal, then the arrival of tourism can increase and it will help in the expansion of the economy. Now chartered flights are coming in a small quantity.

The time has come to think about improving flight connections and making packages that attract tourists from Chinese and Indian countries to increase tourist arrivals. Also, we used to import cement and rods from India earlier. Indian cement was used in most of the government projects. Nepali cement had to be taken in line. There were some cement factories including Himal and Udayapur.

However, this sector has become self-reliant today as the government has facilitated the tax and electricity for the establishment of cement and rod industries. Currently, Nepali cement is used in most of the construction projects. The goods produced from this sector, which has become self-sufficient and over-supplied, should be encouraged to export. The time has come to think about cement as it has not been exported.

The domestic demand for cement is less than the production capacity. The situation in Dandi seems to be the same. So, India is a strong market for our products. If cement and rods can be exported to India, it will contribute significantly to the economy. When it comes to quality and price, it comes down to exports. It can be expensive to bring billets from India and process them here. It will not take long for the industry to compete if it is able to produce environment-friendly goods and provide electricity at a subsidized rate in some time. If we can diversify and create new markets, we can benefit.

Investment in cement, rods, hotels and paintings is increasing

Earlier, Nepal had to import raw materials from India. But now, along with the excavation of Nepali mines, the industries have started exporting quality products. Today, billions of rupees have been invested in the cement sector, both domestic and foreign.

According to the 2020 survey of the Department of Industry, the total investment in TMT bar manufacturing industries is more than Rs 48.7 billion. Steel supply and smelting capacity have exceeded 20 million tonnes per year. In the fiscal year 2080÷81, steel imports increased by about 12.5 percent compared to the previous fiscal year 2079÷80. It has the potential to produce steel in large quantities using Nepal’s hydropower and iron mines.

Foreign and domestic investment has also increased in the hotel sector. According to the statistics of the Department of Industry, the return of investment in the tourism and hotel sector has reached around Rs 52 billion in 2080÷81 and the last two fiscal years i.e. 2081÷82. Domestic investors have also invested billions of rupees. The newly added hotels will definitely have a good impact on Nepal’s tourism industry and domestic paints production has also increased in Nepal. The paint market is expected to grow at a CAGR of 2÷3 percent from 2082 to 2089.

Diplomatic relations and policy topics

Since Nepal is a developing country, its economy is mainly based on certain sectors such as agriculture, tourism, remittances, etc. However, lately, Nepal has been trying to expand its presence in the international market by giving priority to export promotion. The mutual relation of export and diplomatic relations is very important for a landlocked country like Nepal. Strong diplomacy can help open the door to new markets, concessional trade agreements, and investment flows.

The open border between Nepal and India and the ancient trade relations provide opportunities for exports. Relations with China have become increasingly important in terms of commercial expansion in recent years. Nepal has good international trade relations with many countries. However, the US is now imposing tariffs on imported goods with a ‘tariff policy’. In Nepal too, it cannot be said that such taxes and offers will not happen in the future. Therefore, relations should be strengthened by holding talks on such issues through diplomatic initiatives.

The need of the hour is to increase the trade agreement and study the goods with the potential for export from the country and establish the industry accordingly. India has the issue of ‘Indian Standards and Sali Standards’. Our experience in our sector is that while exporting goods to India, Indian standards are needed and it has to be renewed, so sometimes it takes time and sometimes quickly.

Since the diplomatic relations should be continuously expanded, a way should be made to resolve the difficulties by using our diplomatic channels. The more the exports, the more foreign exchange comes in. Therefore, the use of diplomatic relations should be used to keep a special place in Nepal’s trade strategy. Exports can be increased through concessions such as trade cooperation, bilateral agreements, membership of regional organizations.

For this, policy reforms, incentives to the private sector, investment in innovation and trade priorities at the diplomatic level should be emphasized. We have also found in politicians the belief that the development of others cannot be achieved without the development of the economy. There is hope that the positive commitment to all the issues including the legal reforms made through the ordinance will definitely be good.

58 percent of the policy recommendations given by the CNI have been included in the budget. The government has also internalized the issues of policy reforms. The report of the High Level Economic Reform Advisory Commission also incorporates the recommendations of the CNI. However, since the implementation of these issues is important, we have been reminding the government from time to time to ensure their implementation as soon as possible. At the same time, we are giving priority to the suggestions given in the rules and regulations and giving them to the government.

In the current situation, the demand has increased by 18 percent and revenue has increased by 12 percent. Until last year, the construction, wholesale and retail and manufacturing sectors, which were contributors to the GDP, are looking positive, albeit slightly.

Challenges in the development of industrial sector

The size of Nepal’s total exports is much less than its export potential. Factors such as lack of infrastructure, lack of technical know-how, high cost of production and limited market access are the main challenges. There is no single solution to the problems of Nepal’s industrial environment. There are sectoral, thematic problems. Policy issues are also causing problems.

There are problems in the first phase of setting up industries in Nepal. Of the total investment, 20÷30 percent of the capital goes to land. Basic infrastructures such as electricity supply and transportation are still not adequate, quality and reliable. Although there has been some improvement in the production of hydropower recently, there are still problems in the supply of electricity required to run the industries.

The number and quality of educational and technical institutions that produce technology-friendly, skilled and skilled manpower in Nepal is poor. Since most of the workforce is dependent on foreign employment, the industry does not have the required manpower. In some cases, we have to bring in expensive manpower from abroad. Political instability, uncertainty of policy changes, unnecessary administrative hassles seem to be the need to ease the discomfort seen among the private sector and foreign investors.

Exports have also been limited due to the lack of quality and quantity of goods produced in Nepal that can withstand international competition. Long-term vision, clear policies, collaboration between the private and public sectors and human resource development are essential. If these issues are addressed in a systematic way, then industrial development in Nepal can accelerate and the country can move towards becoming economically self-reliant. Forest and environmental issues have created problems in the mining process.

If any industry does not run and it has to be closed, it is even more difficult to shut it down. Investors here have influence to attract foreign investment. Therefore, an environment should be created to give first priority to the investors here rather than foreign investors. After that, the foreigners themselves show their desire to invest here. Nepal is not the only destination for foreign investors. Since the world is a market for them, it is necessary to be cheaper than other countries to bring that investment.

In every investment summit held by Nepal, there is a commitment of investment. However, the investment has not been able to live up to the commitment. Why does this happen, what are the weaknesses? It needs to be explored. We should not open an industry today and make a profit from tomorrow. It takes time to go into profit. Every year, the changes in the tax system through the budget are not able to make the investors feel safe. The private sector is also expected to improve gradually.

The road after the Genji movement

}

Strengthening the industrial sector is essential for prosperity, job creation, trade balance and sustainable economic development. Therefore, it is time to prepare a vision for economic reform and prioritize plans accordingly. Even if entrepreneurs are multi-player, it will be easier for them to travel the journey of industrial revolution if they have a clear understanding of investment security by implementing policy and procedural issues in a clear way.

In addition, the private sector is seeking transparent, stable and industry-friendly policies for industrial development. If the policy is formulated to attract foreign investors, more new opportunities will be created in the country. There is still not enough energy supply in the industrial sectors in Nepal, which is not only increasing the cost of production but also adversely affecting its competitiveness.

Therefore, the government should be serious about implementing the long-term infrastructure plan. In a developing country like Nepal, it is the main means of creating employment and increasing domestic production. Sustainable industrial development is possible only through cooperation between the government, private sector and workers. Although it is possible to build a prosperous, self-reliant economy, the delay in it is holding us back. At a time when every citizen today wants change in the country, the lack of a stable political situation has led to many obstacles. If there is no stable politics, then let’s look at the future and make the policies and regulations sustainable. In a country full of possibilities and opportunities, we should move ahead considering this as the right time to overcome despair and move forward on the journey of economic prosperity.

The Genji protested with legitimate demands. However, the situation worsened on the second day due to the violence during the protests. The private sector has also been raising the demands of the private sector such as good governance and corruption-free society. However, the attack, vandalism, looting and arson of private sectors by the protesters in a fit of rage of violence on the second day was not justified. This attack on the private sector has raised a big question about how to invest more, how to find security for investment.

At a time when the country’s economy seems to be picking up gradually after the last two to three years, the sudden Genji movement is expected to affect the gross domestic product (GDP) by about four to five percent. Everyone’s right to own property and the right to do business has been attacked. There has been a setback in the context that the property of the private sector is also the property of the nation.

If every protest is repeatedly attacked by the private sector, it means a security challenge. There is a need to address the challenges to the security of investors. Those who vandalize personal and business property during the Genji movement and commit criminal activities should be punished.

In today’s day, the private sector should also take action against criminals and those involved in vandalism and arson, and ensure the rule of law and security. At the same time, necessary policies and regulations should be brought to prevent such incidents from happening in the future.

“Foreign investors are open to invest all over the world. They don’t have to come to Nepal for investment. The government should formulate a policy to protect and guarantee investment when they arrive. Acts, rules and regulations should be brought in a way to assure the investment community. There is a need to increase investment by taking big projects from the government level and activities that will make the economy dynamic.

Currently, the bank has a reserve. Nepal Rastra Bank (NRB) has been conducting a liquidity pull to maintain the stability of interest rates. Due to the improvement in remittance inflow, there is a lot of foreign exchange reserves. From the point of view of the macro-economy, the situation is now in very favourable conditions. Although interest rates are very low, demand has decreased due to lack of business morale. There is no demand for loans in the market. When the government takes up new projects, the private sector will certainly step up its activities and this will increase the demand for credit. If the present government can move forward by considering all the problems seen on the surface, then a strong foundation will be laid to prepare a golden future for the country

in the days to come.

It can be.

Now the government is preparing for the elections. This government should successfully conduct the elections. The newly elected government should take steps to address people’s discontent and remove obstacles to economic development. The main reason for the current dissatisfaction is the lack of economic prosperity. Now the government should digitize every system. Rules, laws and regulations should be changed quickly. The government needs to pay attention to the promotion of investment security as the private sector opens the door to new opportunities. If the economy grows, if the business grows, then the employment will increase and the living standard of the person will also go up.

Every sector is expected to get a return after investing. Investors prefer to invest only where there is an opportunity. For this, the government should develop a system that can support it. The government should not be in an environment where Genji can make quick changes and address the urgency. For this, the demands raised by Jenji should move forward on the path of prosperity as soon as possible.

(An article written by Pandey, president of the Confederation of Nepalese Industries (CNI)