Private sector can accelerate growth

The private sector has the resources and can garner additional resources internally as well as externally only if doing business is convenient in these regions. "However bureaucratic hassles, barriers, unpredictable policy framework and political rivalries are sure to vitiate the investment-friendly climate, said entrepreneur Jagadish Prasad Agrawal addressing Regional Conference Asia on Quality of Growth: Approaches to Inclusive Development in Asian Societies.
In the conference organised by Deutsche Gesellschaft fuer Technische Zusammenarbeit (GTZ) -- German Federal Ministry of Economic Cooperation and Development (BMZ) and the Planning Commission of India recently in New Delhi, he also stressed on the rule of law.
The latest economic survey mentions that of the 30.85 per cent population below the poverty line, 78 per cent are from the agricultural sector, 47.1 per cent from the hilly regions and 45.4 per cent from the Tarai, Agarwal pointed out adding that the rural sector accounts for approximately 95.3 per cent of the total population below the poverty line despite Nepal's four-decade history of planned development.
"It thus devolves on the private sector to continue forcing economic agenda to the forefront of national discussion for development and for enhancing its own capability and acceptability among the public about its role in bringing about balanced development of backward regions," he added.
Nepal's major problem is not that of unemployment but of under-employment. One-third of the total working population is under-utilised. Poultry, fishing and dairy development are such professions which can not only supplement their income at their own place but also provide food security without involvement of transport costs.
"Locally generated income builds capability to save, spend and participate in local developmental efforts. An integrated approach linking these sectors to commercialisation of agriculture is called for. Despite huge pouring of investment in the last 40 years, the agricultural sector continues to be primitive. Productivity is low, farming practices are outdated and there is no linkage with agro-processing industries," Agrawal said adding that the private sector has always advocated commercialisation of agricultural sector through corporate involvement via contract farming.
However, labour reform, labour productivity and self-employment are some of the issues of human resource development that have remained non-priorities in the development process. "It is imperative that the state create a unique comparative advantage for these backward regions by converting pockets of deprivation into targeted economic development zones exempt from taxes and regulations for a limited period of time. A combination of cheap electricity, cheap labour and cheap transportation cost for a limited period can transform these less developed regions of Nepal into flourishing blocks of affluence within a very short time," he said. One big advantage Nepal enjoys is that the markets exists on both sides of the country for any product and services within 200km of the production base.
However, the foremost issue is political stability which alone can generate confidence and facilitate private investments, Agrawal said in the three-day conference where around 17 Asian countries participated.