Nepali Times
ASHUTOSH TIWARI
Strictly Business
Invest in what?


ASHUTOSH TIWARI


The Bhattarai government committed last year to declare 2012-13 Nepal Investment Year. It formed a National Investment Board, chose the CEO, and appointed representatives from the private sector as members. But getting the logistics right is only half the story, the other half is about getting the signals right.  

Four missed deadlines: The fact that the Constituent Assembly has missed four deadlines (28 May 2010, 28 May 2011, 31 August 2011 and 30 November 2011) to come up with an acceptable constitution does not give out a signal that we have our internal housekeeping in order. The fifth deadline to get the constitution in shape is on 30 May. By most accounts, that's going to be missed too.

In that case, as per a Supreme Court decision, the present CA would be dissolved and fresh elections would be held, and further uncertainties would grip our political future. All these actions would push back the task of writing the constitution by a few more years. As a result, we are going to lose several years trying to do basic housekeeping while our elected representatives refuse to grow up and understand the costs of time and uncertainty they have imposed on the rest of Nepal.

When even after several extensions, our elected leaders remain unable to engage in the give-and-take of democratic politics to put together the rules of governance, that's a signal to investors that our ways of working are unpredictable.

Uncompromising labour unions: Early this week, the management of Unilever Nepal asked the government for permission to go for a 'lock out'. It said it had no choice. The agitating workers (goaded, it turns out, by union leaders who are close to the PM's party) had put up a list of demands which the company said were 'ambitious, irrelevant and illegal', especially when the company claimed that it had followed all the applicable labour laws and paid the workers well. 

Only last year, under similar circumstances, a Maoist trade union succeeded in shutting down Surya Nepal's garment factory that was employing about 600 women. In the meantime, though the PM has issued a directive to open the Unilever factory, it remains shut, losing Rs 4 million a day, and grinding work to a halt at several feeder factories too.

What's an investor to make of this? You can follow all the laws you want. But that's no insurance against Nepal's politically-affiliated labour unions, who do not even listen to the prime minister.

Confiscated land: The recent quarrel between the Maoists and other parties over the former's plans to allow land grabbers to turn pieces of occupied land into private property should alarm investors. When a major political party does not appear to believe in respecting the right to private property, and instead, tries to threaten and intimidate the opposition to get its way, most investors would want to spend neither time nor money hoping that the party would see the light and change. The signal that comes out of the mere act of trying to make illegal land legal is that there is no respect for contracts, land titles, and private ownership.

Given that other countries in Asia and Africa have geared up their Investment Boards and pro-private sector policies, attracting investments to Nepal is already a difficult task. This is evidenced by the sorry state of our basic infrastructure (electricity, water, roads). The least that the Bhattarai government could do is give out consistently positive signals to investors instead of saying one thing in public and then acting the other way. 



1. Paul Krugman
Nicely stated. Of course, the people of Nepal put the Ms in power, and are now getting what they asked for. Will the janata see the light? Until they do, Nepal will only regress -- for ultimately, the Ms are a regressive force.


2. Geeta Thapa
Only a fool will invest in Nepal. We need a new generation of leadership. The gangsters running the power structure of present day Nepal needs to wiped out. That is the only way forward. Its time to follow the exmaples of the Syrians.  

3. K. K. Sharma

Asking for investment is actually asking for investors to be potential victims of extortion. Maybe Baburam baje, is running out of those whom his party can extort. According to one article in Ghatana ra Bichar of this week some 8000  industries, ( small and big ) have been shut down since 2006. So the targets for extortions is dwendelling for Baburam baje... so naturally he says he wants more investments in this country.


4. Subodh Thapa
Why make the investment ! Just give the money to Pushpa Kamal Dahal and all the other Maoist. The Maoist have sold their souls to the Devil.  The so called leaders from UML and N  C are scared of the Maoist. Nepal keeps regressing each day and no one can challange the Maoist crooks. Who is backing the Maoist. We Nepalis need to bring down this power base. Kick the Maoists out of the country and only then can Nepal prosper. No one should invest even 1 ruppes in Nepal until the Maoist are out. 

5. Suman Pandey
Wow !  Is this a  funny and cruel joke. What is the sense of humor behind this stupid bull carp. 18 hours of power cut, add to that no petrol and no cooking gas or even deisel. Add the extortion by the Maoist creeps known as YCL, who are basically following orders from Pushpa Kamal or Baburam. Why should any one in their right mind invest in Nepal. Mui loco,  si.  I would be actively convincing the investors already there to cut their losses and pull out. Let the freaking genius of the Maoist party come of with an economic plan. Lets see how they fare when their own people start to beat up on them. After all, you know, its the ECONOMY  STUPID.      

6. Bikas Man Singh
Its would be sheer madness to invest in Nepal because that you make the Maoist goondas rich. The rest of Nepal would keep on suffering. Why is there no one who can take on or tackle Pushpa Kamal or Baburam. Why do not Vaidhya and Gajurel split from low life Prachanda. The well being of Nepal and Nepalis is at stake here. Is there no one in Kathmandu that can take on the Maoist. What a shame. The Maoist thugs have only looted Nepali coffers. Nepal will never prosper under the Maoist. The US should never remove the terrorist tag for the Maoist, because they are terrorist. The Nepali people need to unite and rise against all the corrupted politicians.    

7. Kris Bhatta
#3 K K Sharma.
BABURAM BAJE!

Grandfater Baburam.
Babu the Veda(english) plays musical(hindi).

Baburam ,the Useless( bengali).



8. Salil Pradhan
People would refrain from investing in Nepal as long as the atmosphere of intimidation and other hindrances persist. Why would any one invest to give their hard-earned money to the people with extreme views under the clout of different political parties? It is the common people who lose, losing their livelihood and the country's economy takes a beating. We can only see skywards to save the nation from this quagmire.

9. Danny
It is like inviting the cranes to sup from a narrow necked tall bowl.
The politicized trade unions  extorts money without any reason.Electric
Power is lacking. Rule of law is unknown to our Maoist  rulers.
Right to Prop[erty is a fundamental right in the Declaration of Universal Human Right Charter.
Democracy can not exist without it.
The Maoist need reeducation .
They are to be brain washed and taught about democracy and modern development.
 Yes democracy means social and economic justice too.
 Inclusive society is a must.
 But we have at the same time straddle between two worlds, the have and the have nots.


10. satrughan sinha

 

Kassam, i felt like reading a nepali translation. If there is any one word that defines the article then it would be BANAL. This is what the phony intelligentsia of our country does best: tinker with some words in their leisure and feed the readers with intolerable screed. Do a favor--don't write for the sake of writing. I am aghast, how can a national newspaper publish something that wouldn't make a high school kid proud?



11. bridohi

Satrughan you must be living in la la land. Wake up & smell the coffee or chiya. Have you tried operating a business in Nepal or do you operate a business in Nepal? Any business with more than 8 employees have the right to unionize (which is ok) if they only worked. The Maoist aflliated unions camp at the factories--eat & drink for free. They take the workers on political rallies stopping production, yet having to pay them for no work done. Try firing a union employee who does not show up to work or whose performance is not upto par. It is better to lock up the factory rather than deal with the hassels. Now unions want profit sharing. Who in the right mind will invest in Nepal. Not only are the unions shooting themselves in the foot, it will lead to their ultimate demise. When a leech has no blood to suck, it will die.

 



12. FunkyMonkey
#10, your comment is exactly what fits the 'banal' label. The entire paragraph could be applied to any article published anywhere because it doesn't say what's wrong with the article. If you have facts to refute anything in the article, please enlighten us. Make your disagreements clear, otherwise don't leave comments for the sake of leaving comments. Kapish?

13. Thomas

Dare to dream of a moment at some distant time in the future when Nepal has a stable government, with much reduced corruption, and is able to provide a business environment with 24/7 power, reliable transportation over road and rail, reliable low-cost fast communications, and a low-cost workforce; in short, what China, Thailand, Malaysia, parts of India, and many other countries already offer.  Even with all those pieces in place, Nepal would still not be an attractive destination for foreign investment absent major changes to the labour laws.  Just read section 2 of Nepal's Labour Act and ask why any company would want to deal with such restrictions on its business operations, when other options for siting their operations exist that have much fewer restrictions.

http://www.ilo.org/dyn/natlex/docs/WEBTEXT/30019/64854/E92NPL01.htm

Paradoxically, the best way to create a vibrant labour market is to make it less onerous for employers to staff at the level that they need.  A Labour Act and overly-strong unions that handcuff companies from making the decisions they need to to match production with market demand, and to run their operations they way they see fit, helps ensure that investment will flow everywhere but Nepal.  A much-needed updated version of the Labour Act was prepared and negotiated with facilitation and advice from the International Labour Organization, but it has languished on the shelf for the past few years.

The good news is that, unlike power and roads and communications, which require major money to be spent, the Labour Act is a paper document that can be revised at almost no cost. While changing it won't address any of the other impediments to investment, tackling this issue would show the Maoists' Invest in Nepal year is more than just lip service. The bad news is this is about as likely to happen under the Maoists as a load-shedding-free day happening tomorrow.



14. Pankaj KC
Well articulated and well written arguments Ashutosh ji. Nepal has gone through revolutions every decade without any result - whether it be absolute Monarchy or Constitutional Monarchy or Federal Republic, the poor are still poor and rich are becoming richer and richer. You simply cannot expect any good from this kind of system of government where definition of People and patriotism doesn't extend beyond the party cadres.

15. Gole
Attracting FDI has three conditions:.
1. Rule of Law
2..Rule of Law.

and
3.. Rule of Law.


16. Sanbir Ale
Dear Asutosh,
Great read! Amongst the depth you write with, I think you should find out the contentious issues from the otherside of the fence and try to answer 1. Why the Workers are unhappy/contentious about? 2. Are their demands genuine? 3. What are the alternatives they are proposing? 4. What could the Prime Minister Do(feasibility)? 5. Role of Leadership in such scenarios?
Thanks in advance,
Sanbir


17. Tula Chaudhary
The coutry where the each general people is coerced to be a member of political party leaving no any free people and directly or indirectly every politicians are either businessman or the leader of gangsters or frittering everything,the only they who are less aware of business rather called donor may invest in Nepal.No single profit by service people will invest here.Until the leaders give up with  plebians,no healthy and fair investment can be expected.

LATEST ISSUE
638
(11 JAN 2013 - 17 JAN 2013)


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