Government, private sector must join hands to build investors' confidence

Government must take private sector into confidence to boost investment for the economic growth of the country, according to research scholars.
"Investors are losing confidence," according to the study carried out by the PhD scholars. "Their morality is down due to energy crisis, frequent labour trouble, financial crisis and political instability," it said, adding that timely budget of the current fiscal year also failed to boost their confidence.
The successive governments have been failing to bring budget on time due to political tug of war among themselves keeping the investors' waiting. But after three years, this year the government succeeded in bringing budget on time, though it was leaked earlier due to finance ministry's weakness.
"The only positive thing is that the government has brought the fiscal policy on time this year," said Basu Sharma, a member of the study team.
The study has also suggested the government to build confidence of not only the investors but also the common people as individual confidence level has also dropped.
"The government has to boost confidence of an individual too," it stated. "Rigorous focus on increasing investment is the need of the hour to regenerate new energy in the economy."
Partnership with the entrepreneurs can build up a new foundation for the economic growth.
The government's failure in partnering with the private sector might hit the newly emerged and developing sectors like financial and communications that have emerged post-1990 liberal economic policy. "If government failed to propel economic growth, the country will have to suffer," he said, adding that the government must ensure policy stability to gain the confidence of the private sector that is the largest investor and engine of growth.
The government's confusion on the role of private sector has also made the entrepreneurs doubtful of government intentions.
The budget for the current fiscal year has also raised serious doubts as the government has planned to distribute money to cooperatives instead of investing in large infrastructure projects that could help sustainable growth in the long run.
The country lacks infrastructure, proper connectivity for the market access and large hydro power projects that could propel economic growth but the government has scattered the budget in the name of cooperatives that is suspected to be misused grossly due to lack of government's weak monitoring mechanism.
Due to transition period of the country, the successive governments failed to focus on economic issues. "Nepal need economic growth, not the politics," the report concluded, adding that the last fiscal year's economic growth rate — projected at 3.5 per cent — the lowest in the last three fiscal years should ring alarm bell but the government is not very enthusiastic, when it comes to economic agendas pushing the country towards a bleak future.

Key hurdles
* Prolonged energy crisis
* Frequent labour problems
* Financial crisis
* Political instability
* Policy instability