Nepal Inc is in a dilemma due to the increasing uncertainty.
"Despite an ambitious and young population, expanding market with a growing middle class, and demand for new products, services and opportunities, Nepal Inc has failed to boost investment due to economic and non-economic hurdles like prolonged political uncertainty, rising insecurity and ballooning informal economy," said vice president of Confederation of Nepalese Industries (CNI) Hari Bhakta Sharma during a business session at CNI's 10th annual general meeting, here today.
"Nepal ranks 41st in terms of total number of population and 35th in terms of high per cent of young population, who are ambitious yet highly resilient," he added.
The country has not been able to exploit the vast opportunity, despite its huge potential due to increasing economic crimes and corruption, lack of utilisation of technology, chronic energy crisis, deteriorating competitiveness of industries, rising cost of production, and trust deficit, he said, adding that the private sector is facing sustainability problems due to the worsening investment climate.
With a fertile landmass, higher biodiversity and apt climatic conditions, the country has huge possibility to develop high value agriculture products with opportunities for agro-processing industries, Sharma added. "Likewise, the country can generate hydropower that has high demand in the country and in India too."
The country offers tourism, manufacturing and mining potentials, but the private sector is trapped in policy instability, political bickering, and growing informal economy that is bleeding the country white, he added.
"The Industry Ministry has to be entrepreneur-friendly to boost manufacturing and create employment," said CNI president Binod Chaudhary. "The weak ministry is one of the key reasons in discouraging the industrial environment," he said, adding that lack of an investment-friendly environment has increased cost of production that is suffering from rising cost of capital, labour and uncomfortable labour-management relations.
"The contribution of the manufacturing sector has also come down to six per cent due to increasing labour cost but decreasing productivity," Chaudhary said. "The private sector is also discouraged due to non-implementation of government policies that could have helped boost investor confidence."
Likewise, increase in salary also has to be linked to productivity for a better industrial environment, he added.
Regular talks between employers and employees, authorised single trade union and concept of Industrial Relation Forum could bridge the trust deficit between entrepreneurs and labour unions for a better industrial environment, said vice president of Federation of Nepalese Chambers of Commerce and Industry (FNCCI) Pashupati Murarka.
"Industries that have been paying more than the minimum wage have also faced problems," he said, asking the government to form an arbitration council to minimise strikes.
Former finance minister Surendra Pandey, on the occasion, suggested the entrepreneurs to balance wage and productivity. "The state has to bring a policy to encourage people to be entrepreneurs instead of job-seekers," he said, adding that mechanisation of procedures from registration to tax payment will reduce corruption and help create a healthy industrial environment.
"Likewise, a focused development approach, reform in land holding, and phase-wise development of hydropower corridor coupled with investment protection will encourage both the private sector and the government."
KATHMANDU: CNI has — in a decade — selected senior vice president Narendra Basnyat as the President — during the 10th annual general meeting on Sunday — as the incumbent President Binod Chaudhary has been elevated to President Emeritus. The new team with four vice presidents will be elected tomorrow.