Kathmandu. I would like to warmly welcome you to this inaugural program of the 59th Annual General Meeting of the Federation of Nepalese Chambers of Commerce and Industry and Commerce Day 2081.
Today marks the completion of two years of the Federation’s existing Executive Committee. During these two years, we have tried to turn various challenges into opportunities. We have searched for new opportunities. We have tried to overcome disappointment. We have succeeded in many things. And, the efforts for reform are still ongoing.
I would like to remind you that two years ago, at the inaugural program of the Federation’s 57th Annual General Meeting, there was a lot of discussion about Nepal falling into an economic crisis like Sri Lanka.
At a time when most of the speakers at that event were suggesting to the government that if the Nepal government did not take any decision in time, Nepal would also face a foreign exchange problem like Sri Lanka, I had said in my closing remarks that Nepal would not be like Sri Lanka.
There were some grounds for that. For example, Nepal takes concessional loans. The ratio of GDP to debt was less than 40 percent.
The foreign exchange reserves were sufficient to cover more than 6 months of imports of goods and services. But we were more cautious. We were more cautious than necessary. We tried to control many things.
As a result, we also lost revenue. Trade that was done through formal channels became informal. Informal imports became institutionalized. Except for cars and motorcycles, all materials were imported informally.
The policy decisions adopted at that time to control market demand have not allowed the market to move forward. After continuous efforts, the National Statistics Office has reported a 5 percent economic growth in the last quarter.
This is positive. But the morale of entrepreneurs and businessmen has not yet increased, as shown in a survey we conducted with about 240 organizations across the country. We will make this report public soon.
Personally, I am an entrepreneur who seeks harmony in adversity. I do not want to despair, but to spread hope. The situation is improving. But the current improvement is not enough to fulfill the aspirations of our youth.
Until we can create decent and high-wage employment opportunities within the country, despair cannot be turned into hope. The current despair is the result of that. We know that the government has limitations in providing employment. Currently, the government has employed about half a million people.
The private sector has employed 86 percent. But even Nepal’s private sector does not have the capacity to employ the about half a million youth who enter the labor market every year. That is why young people go to find work in the same economy that can provide employment. These economies that provide employment to Nepalis and the situation in Nepal were similar some time ago. In the 1960s, Nepal’s per capita income was 50 and South Korea’s was about 100 dollars. Now, Korea’s per capita income is around 40 thousand dollars, while Nepal’s is 1400 dollars.
During this period, Korea’s income seems to have increased four hundred times. Nepal’s also increased 28 times. But the purchasing power of 40,000 and 1,400 is not comparable. We have made progress, but it has not been as much as it should have been.
Globalization has not only increased the needs and desires of the general public, but also opened the whole world to get a standard of living and work according to ability. We were able to get work in a big economy, but we could not make our economy big.
Bangladesh’s per capita income is double that of Nepal. Total exports are over 40 billion dollars. Nepal’s income, which is about to be upgraded from a least developed country along with Bangladesh, has not reached that level.
We have moved forward based on the other two indicators. If we are not to go back again, we should allow the private sector to work unhindered.
Now I would like to talk to you point by point about what we can do here? How is that possible? And what kind of support is needed from the government and other stakeholders.
Honorable Prime Minister and the main agenda of the current government is a prosperous Nepal, happy Nepalis. Prosperity in the country means everyone gets opportunities. For that, money, intelligence, discretion and skills had to be invested. More than that, there needs to be an investment of money. Which will later demand labor and skills during production.
There are two main entities that invest money, one is the government and the second is the private sector. The government mainly brings money for investment from revenue. Revenue is raised from entrepreneurs, businessmen and the general public. The main source of income for the general public is also the private sector because most of the jobs are created by the private sector.
A study conducted by the International Finance Corporation and the Federation last year also showed that the private sector contributes 81 percent to the economy.
Therefore, the issue of allowing the private sector to work unhindered to fulfill the government’s goal of prosperity should be the first priority.
One of the foundations of the happiness of the general public is sufficient employment and the income generated from it. Who does not have to worry about the basic needs of their family, education and health.
First of all, I urge all stakeholders, including government agencies, civil society, media, to understand this importance of the private sector.
The countries that have understood this have made rapid progress. For example, Bangladesh, Rwanda, Cambodia, Vietnam, Laos, which were like us, are now surpassing us in the path of progress.
This is possible, as the private sector has moved forward, poverty in India is decreasing at a rate of 1.4 percent per year. In twenty years, about 500 million ordinary people have risen above the poverty line.
A country like us, Bangladesh, has increased its exports from 18 billion to 40 billion dollars since 2010. Rwanda, which lost 800,000 people due to internal conflict in a period of 100 days thirty years ago, has had an economic growth rate of 7.2 percent in the past 20 years.
Cambodia, which became a member of the World Trade Organization on the same day as us, has received ten times more foreign direct investment than Nepal. If these countries can do it, why can’t we? If others can move forward, where are we stuck? These issues need to be addressed.
Honorable Prime Minister, Honorable Ministers, Chief Secretary, Secretaries, among all the dignitaries present here, I want to say, we can.
For investment, I will first talk about foreign investment. Currently, only zero.2 percent of the gross domestic product is foreign investment. That is about 8 billion rupees per year. This can easily be increased fivefold. Let us aim to bring in one billion dollars annually by 2030. Because I have already given the example of Cambodia, which is a member of the World Trade Organization along with Nepal, above.
In the last two years, we organized four conferences in India, China, and the UAE. More than 150 local entrepreneurs and businessmen participated in each program. They are eager to come to Nepal.
The new economic environment globally has also indicated that it will benefit Nepal. The US has set a much lower customs duty rate for Nepal compared to Nepal’s competing countries.
This has further strengthened the possibility of increasing investment in Nepal. We should also be able to benefit from this. We are studying this.
Along with advocacy to increase the morale of investors within the country, at the initiative of the Federation, the Nepal Development Company has been established for internal capital mobilization by including FNCCI, CNI, Chamber, District Chamber of Commerce and Industry, businessmen under commodity associations, non-resident Nepalis and other institutional and individual entrepreneurs, businessmen and investors. It has opened up investment opportunities in large projects by mobilizing small capital scattered across all 77 districts of the country and abroad.
The situation is currently uncomfortable, but reform is not impossible. We can do it. We easily resolved a major internal conflict. We rose from the structure destroyed by the great earthquake. We embarked on the path of stability by promulgating a constitution with consensus. We have suffered from an epidemic like Covid. We will also solve the current problem.
We are poor. We are prudent. We are entrepreneurs. But we must put the economy at the top. It should not be disrupted by any dispute. Entrepreneurs should be allowed to work freely.
I say again, we can. If we cannot, who can? If we don’t do it, who will?
Due to political stability and its message, there was an average economic growth of more than 7.5 percent for three years from 2073 to 2075. We want all parties to at least form a common view on economic issues.
A common view of political parties can be formed on economy, development and prosperity. Work that adversely affects private sector enterprises and the livelihood of the common people should not be done by political leadership.
The private sector has the capacity to create capital worth 1.6 trillion rupees annually, and the government needs to invest only 4 trillion. Double-digit growth is possible. Decent employment can be provided to millions of people every year. The first condition for this is stability. We have also discussed this issue in the High-Level Reform Suggestion Commission formed for economic reform.
We have been continuously studying and discussing these statistics and reform measures that I have presented today for two years. By organizing a large economic conference on 25 Asoj 2080, we had demanded a new phase of economic reforms and a high-level commission for that. Now that the commission has been formed, we are in the final preparation of the suggestions.
Another prerequisite for reforms that are felt by the general public is good governance. In the last three decades, good governance has emerged as a major problem in the country. This is a common problem for all of us.
Nepalis are by nature simple, happy in small things, friendly and cooperative. Their demands are not many. Society is gradually changing. Simple and straightforward living is now becoming difficult. If we fail to ensure good governance, it is seen that not only will there be problems in the economy but also in society itself.
Honorable Prime Minister, Ministers, Chief Secretary, our demands are small, your small efforts here will add great enthusiasm.
Let’s create a place where young people who want to work can easily be served
Increase the morale of entrepreneurs who invest
Give people who ask for security a chance to work
Say a kind word to businessmen who pay taxes
Let’s not insult the private sector that provides employment.
These are not big demands, but even this much will bring about a big change. This is possible with the highest use of technology and a policy of ethics. Artificial Intelligence is currently being developed in a way that will change the very nature of the world.
We are demanding general reforms. We want everything from business registration to the citizen app to be done. For that, the government should take the initiative. The private sector and donor agencies can also be involved in this.
The second task for enhancing good governance is to promote ethics. The legal basis should also be built in a way that promotes good governance. We have examples of past-effective laws increasing distrust. It is necessary to bring the current fiscal year’s policy and program and budget as the starting point for reform. We can do a lot.
Honorable Prime Minister, Honorable dignitaries present,
You are aware that the private sector’s inability to function has had an impact everywhere. The government’s revenue has also been adversely affected. Everyone is aware of this.
I think that now the private sector will have to lead economic prosperity and development. We should reduce the work of looking at each other for resources. Let us come up with a plan, discuss how we can work together. Let us look for opportunities for collaboration with local and provincial governments. Now the presence of donor agencies will also not be the same as before.
Let us study and debate on how to make our institutions effective from the center to the local level. We have also made some strategic plans. Innovative thinking centers are needed at all levels.
I urge everyone to consider the slogan of respecting the private sector, the basis of prosperity. Because
The sector that provides 86 percent of employment is constantly being disrespected.
The private sector, which contributes more than 80 percent of direct and indirect revenue, is constantly neglected.
The private sector, which contributes 81 percent of investment, is constantly at risk.
The private sector, which exports 98 percent, is constantly humiliated.
We take risks,
That is why we have raised the issue of security.
You have raised the issue of respect.
You have raised the issue of dignity.
There is no state investment in this.
Only harmony is needed.
I am excited that the Honorable Prime Minister has been positive on this issue.
We have also understood this. We must respect others to be respected. We must be aware and responsible towards consumers and other stakeholders.
We must also express gratitude to those who are making good efforts while keeping these issues in mind.
The government, including the Honorable Prime Minister, has amended about 35 laws at our request. A draft of a bilateral investment agreement has been prepared. At our request for transparency and accountability, the Ministry of Commerce has decided to make the Certificate of Origin completely online. We are facilitating programs that we will organize abroad to promote Nepal.
At our request, a high-level commission has been formed to prepare the basis for a new phase of economic reform.
For all this, I express my gratitude to the Honorable Prime Minister, Ministers, Chief Secretary and the government and all political parties and leadership.
I would also like to urge the members of the Federation, since the new phase of reforms has begun on the suggestion and request of the Federation, let us all together advocate for this reform initiative from the center to the local level by taking ownership of it.
This reform is a reform in policies and regulations
This reform is a procedural reform
This reform is an improvement in behavior and conduct
This reform is an improvement in work and thinking
This reform is an improvement at the center, state, municipality and ward levels
This reform is an improvement in social services including education, health.
This reform is also an improvement in the work and conduct of businessmen
This reform is for you, us and our descendants
It is necessary to involve all the mechanisms of the federation in the policy-making process reform by observing local needs and the global environment. We should not and cannot remain underdeveloped and live in deprivation and poverty.
Finally, on behalf of the Federation of Nepalese Chambers of Commerce and Industry and myself, I would like to welcome all the dignitaries present here, Honorable Prime Minister, Honorable Ministers, Honorable Members of Parliament, Chief Secretary, Secretaries, and all the dignitaries present here to raise our morale at this inaugural program of the 59th Annual General Meeting of the Federation of Nepalese Chambers of Commerce and Industry and Commerce Day 2081.
In closing, on the auspicious occasion of the New Year 2082, which you have come to our doorstep, I would like to express my heartfelt best wishes for a prosperous, happy and prosperous future for you and your family. May the New Year bring success in our common resolve to turn all our challenges into opportunities and despair into hope.
(Chairman Chandra Prasad Dhakal’s views at the 59th Annual General Meeting of the Federation of Nepalese Chambers of Commerce and Industry)
प्रतिक्रिया दिनुहोस्