“COVID-19 crisis is also an opportunity to expedite Nepali economy”

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Satish Kumar More has been leading the Confederation of Nepali Industries (CNI) as its president since April, 2019. In his exclusive tete-a-tete with ceotab.com, he divulges his views on negative impacts of the coronavirus pandemic on the national economy and the possible ways to mitigate them. Excerpts:  

How do you assess the impacts of the COVID-19 pandemic on the national economy?

Like other economies across the world, the Nepali economy is also reeling under the yoke of the pandemic.All three major pillars of the economy-tourism, remittance and export- have been shaken to the core. Similarly, other economic sectors are too negatively affected.This all has rendered millions of Nepalese people jobless.  If the situation does not improve anytime soon, there is a possibility of the onset of social unrest in the country .  

So, how can the crippled economy be reinvigorated?

When things go black, there is always a silver lining. The same notion applies in the case of the prevalent coronavirus crisis as well. If you look on the bright side of the crisis, there do exist some promising economic opportunities. If we exploit them to the hilt, it may help buttress the battered economy.

Could you specifically pinpoint such economic opportunities particularly in the current critical period?

One of them is about attracting sufficient amount of foreign investment in Nepal. Other countries like Indonesia, Cambodia and Vietnam are now increasingly drawing those investors who want to shift their investments away from the Chinese city of Wuhan, the epicenter of coronavirus outbreak.

No doubt, Nepal, too, can do the same. For this, the concerned authorities must adopt certain extraordinary measures to greatly improve the country’s investment climate.  For instance, such measures could be the relaxation of hassle-some provisions regarding the registration of foreign companies or the preparation of Environmental Impact Assessment (EIA) report.  

Similarly, another exciting economic opportunity pertains to the possibility of launching  the “Make in Nepal” campaign. The government shall design and execute this campaign so as to encourage both multinational as well as domestic companies to manufacture their products within the country. This might well invite sufficient financial and technological resources in the manufacturing sector and ultimately help strengthen it. If the very sector is really bolstered, this will help in the promotion of export business, creation of jobs, fostering of innovation and enhancement of skill development. These factors are simply crucial to ensure economic development not only in the current critical phase but also in the post-pandemic scenario.

Energy and agriculture are being increasingly portrayed as viable sectors for expediting the economic growth in as challenging time as now. What is your take on this?  

While talking about energy especially hydropower, the government is saying that the surplus electricity to be generated in near future will be exported to India and Bangladesh. There is a plan to export such power to these markets at Rs 4/5 per unit. 

In my view, the idea of selling it to foreign countries at such a low rate carries little economic sense. Rather than this, the surplus energy shall be used for the domestic consumption itself in a strategic way.  For instance, it’s said rate can be hiked by just 10-15 percent and distributed for various purposes like promoting electric vehicles and backing up local industries. The promotion of such vehicles reserves enough potentials to gradually substitute the exorbitant import of petroleum products and literally save billions of rupees annually.

Similarly, if the local industries are supplied with sufficient electricity, it will financially buttress them by lowering their cost of production. Not only this, the very step might also spur the establishment of new energy-intensive industries in the country in the post-COVID -19 scenario. Such industries could employ especially those Nepali youths who are returning home by losing jobs in the foreign countries due to the pandemic.  

As far as the agriculture sector goes, it cannot be developed in a traditional way like now.   There is a clear need of a paradigm shift in the national understanding and approach to the sector. In this connection, the CNI is planning to hold the national level “Agro Summit” for the first time in the country in the next 7/8 months. The prime aim of the proposed summit is to help fully explore and exploit the agricultural potentials of the country.  Similarly, it will be focused on leveraging the idea of agriculture to expedite the socio-economic growth of the nation.

The private sector, including the CNI, has already expressed their satisfaction over the monetary policy presented by the government last month for the current fiscal 2020/21. What are major reasons behind this?

The policy has announced a number of important measures to mitigate the negative repercussions of the coronavirus crisis on the country’s industrial and business sector. Extension of the loan repayment deadline, refinance facility, floating of loans at lower rates and increase in credit to core capital cum deposit (CCD) ratio are among such measures.

As the policy tried to improve the overall business climate by largely incorporating the recommendations of the the private sector, we welcomed it. 

Now we want the government to implement the policy at the soonest. Any unwarranted dillydallying in this regard may not bring the desired results.