The imposition of restrictive trade measures to control foreign exchange reserves leaving the country has done little to solve Nepal’s economic woes, political leaders and business leaders said at an event on Saturday.
Speaking as a keynote speaker at “Ujyalo Purva,” an event organized by Kantipur Media Group in Biratnagar, Nepal’s Congress Secretary-General Gagan Thapa said the country’s economy has shown no signs of improvement despite restrictive measures.
“If our GDP increases by 5 percent, import should have increased by 20 percent, but it has increased by 50 to 60 percent,” Thapa said. “We chose a simple path that created the current situation with tight foreign exchange reserves.”
Thapa added that the new government to be formed after the upcoming federal and provincial elections should take a bold step to tackle the country’s economic woes.
“We send thousands of youth abroad and the remittance is used for consumption and for imported goods,” Thapa said.
At the event, political leaders explained Province-1’s potential in various sectors such as tourism, services and industry.
Surendra Pandey, Vice-President of CPN-UML, said that the immense potential of hydropower can transform the development of eastern Nepal.
“Tea is one of the region’s most important products and since the Indian government plans to impose a 40 percent tax on green leaves exported from Nepal, the Nepalese government should immediately negotiate with New Delhi to resolve the issue,” he said Pandey.
Barshaman Pun, deputy secretary-general of the CPN (Maoist Center) said that since the country has adopted a federal system, the provinces should work with a spirit of competition, which is the basic concept of federalism. He explained that Province-1’s growth rate has remained slow after the introduction of the federal system and said the province is unable to take advantage of the new system.
Wortspiel added that Province-1 can be a hub for hydropower and its potential market can be India and Bangladesh.
Mahesh Jaju, former chairman of the Morang Merchant Association, said they were forced to take to the streets to protest the wrong policies. “We were forced to take to the streets against the wrong policies regarding galvanized iron (GI) wire and sanitary napkins,” Jaju said.
Jaju also complained about the high interest rates. “Biratnagar will protest against high interest rates,” he said.
He added that due to frequent changes in government and politics, many people have chosen trading companies instead of investing in the manufacturing sector.
Former Morang Merchants Association chairman Pawan Sharda lamented that Biratnagar, which was considered the second most economically important city after Kathmandu, is now gradually being overtaken by other emerging cities.
Province-1 young entrepreneurs pointed to some policy failures on the part of the government.
Anupam Rathi, Senior Vice President of the Morang Merchant’s Association, underlined the need for stable, sustainable and progressive policies.
Rathi called on the government to address problems caused by illicit trade through open borders, high production costs and labor problems.
Kabin Shrestha, chairman of the Lemon Tree Premier Hotel and president of the Rotary Club of Biratnagar, said policy formulation alone would not work if the implementation aspect was poor. “For young entrepreneurs like us, government instability is a big challenge,” he said.
He described the high-interest problem as “interest rate terrorism” created by unhealthy competition between commercial banks.
Shruti Sharma, chairman of the Kinder Piller School, said banks discouraged young women from starting a business because it is very difficult for a woman to get loans from banks.
Suwarna Das Shrestha, former Chair of the Independent Power Producers’ Association, Nepal, said the province is currently producing 340 MW of electricity and only 287 MW is being consumed.
He accused the government of not doing its homework on harnessing potential power generation. According to him, Province-1 has the ability to produce 20,000-25,000 MW.
Arun Rathi, Director of Rathi Group, said: “We have industries in two major economies – India and China – which is a challenge in itself. The increase in the number of similar industries trying to copy success has become a challenge even in small markets like Nepal.”
He added that skyrocketing land prices are a big problem for starting an industry.
Provincial 1 Finance Minister Indra Bahadur Angbo acknowledged that the current fiscal year’s budget had an impact on the GI wire and sanitary industry.
Bhawani Rana, former president of the Federation of Nepalese Chambers of Commerce and Industry, said that there is no business-friendly environment in the country due to political-level disputes. “It’s easier to trade here than it is to have an industry,” she said.
Gyanendra Karki, the Federal Minister for Information and Communications, acknowledged that there is a problem with government spending. “Political instability is the main reason for the problem,” he said.
