Tuesday, July 3, 2012

Private sector's prescription for sustainable economic development

The private sector has prescribed political parties a common minimum economic agenda to make Nepal a middle income country with a vibrant and sustainable economy growing at over seven per cent per annum in next one decade.
"We have shared the draft 'Common Strategy for Sustainable Growth' with the leaders of all the major political parties and they are all positive," said Federation of Nepalese Chambers of Commerce and Industry president Suraj Vaidya.
"Though, it’s a long term vision, it could also help the parties to come closer on a ground and start working from the budget for the next fiscal year," he said, adding that lack of nationally agreed common economic agenda has made the country witness policy instability and programme inconsistency.
"Priority seems to be changing with the change in government or person in decision making creating more confusion among potential investors."
The private sector has also sought clarity in the roles of private sector and government, guarantee of property rights and right to be engaged in business, rule of law and guarantee of implementation coupled with dynamic and competitive business regime, no fragmentation of market and robust competition regime with incentives for innovation.
"Easy and cost effective access to finance, contract enforcement and swift judicial remedies, public investment in infrastructure development, macro-economic stability, investment friendly environment, safety and security of life, property and investment, reforms in skills system and labour market, openness to FDI and increasing trade and access to international markets are also key," according to the draft.
The common prescription of the umbrella organisation of private sector has categorically separated the economic goals into three phases; long term (10 years), medium term (five years) and short term (12 to 18 months).
The political parties must adopt the common agenda to avoid another major conflict in the future fuelled by the lack of seriousness in economic growth, the chieftain of private sector opined.
The conflict is rooted not merely in the country's long history of political alienation but more in the economic deprivation, Vaidya said, adding that the successive governments have currently ensured most civil liberties to a certain degree and the political alienation is being tackled through a federal structure of governance but the economic growth aspect needs to be taken seriously.
The draft has also listed a slew of policy reforms — like new Industrial Policy, Trade Policy, New FDI Policy, New Hydropower Policy, Reformed BOOT Policy, New Labor related Acts ensuring lab or flexibility and social security, One Window mechanism functional, Identified 50 priority projects for foreign investment and a mechanism to acquire land for industrial and infrastructure development — within a year, irrespective to whichever party leads the government.
Despite Nepal's long history of planned development since 1956, the country failed to achieve sustainable economic growth due to policy and business environment instability and inconsistency arising out of political instability, chronic power crisis, insecurity to life and property, rampant corruption, poor implementation, politically active trade union militancy, non-competitive practices, poor and inadequate infrastructure and high cost of finance, forcing the country to dependent on whether aid and grant or remittance, the draft reads.
"The draft will help the country initiate the walk towards prosperity to achieve the vision of sustainable economic growth with focus on resources that the country has comparative advantage," Vaidya said, adding that the minimum agreement on economic agenda will help boost the areas of comparative advantage like tourism, hydropower, agriculture, infrastructure, trade and education.

Pun threatens
KATHMANDU: "If the parties try to stop full-fledged budget, the February 1, 2005 — when the then King Gyanendra Shah took over — will repeat," threatened the caretaker finance minister Barshaman Pun, in the similar tome of Primer Dr Baburam Bhattarai. The government will bring full-fledged budget of Rs 429 billion, even if other parties do not come to political consensus and resort to protests, he said, addressing at the Reporters' Club here on Monday. Though, he showed hope that there could be political consensus to bring the full-fledged budget, Pun claimed the one-third budget will be unconstitutional at the time when there is no parliament. "It will also not be enough for election slated for November 22."

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