Tuesday, April 24, 2007

Some Business Opportunities in Nepal

  1. Tea export to Pakistan

Pakistan, one of our closest neighbors is second largest importer of tea (after US) and there is no active tea trade between India and Pakistan. Currently Pakistan imports Tea from China and Kenya. There leaves a room for Nepal to export Tea to Pakistan.

  1. Export of Nepali Forest Product to India, China and rest of the world

Bhutan has made good progress in exporting forest products like paper and furniture to two of our giant neighbors. Nepal with huge forest and varied vegetation can tap this opportunity.

  1. Back-office Pharmaceutical Production

Indian Pharmaceutical companies are doing too well in the Global Pharmaceutical Market especially in generic segment. There are very few reasons why Nepali companies cannot tap that market. Also, many global giants are focusing more on brand management and marketing outsourcing the production. Nepal, a country between India and China is an ideal production base for multinational targeting these two countries.

  1. Business Process Outsourcing from US, EU, ASEAN, India

India is now the most preferred outsourcing destination for most MNCs, but the market is maturing due to the shortage of qualified manpower and high salary rise. This brings Nepal into the outsourcing picture in supplementing India.

  1. Travel and Tourism

A country with varied vegetation having as much as 8 National Parks, 6 Forest Reserves, 2 Conservation Area and 1 hunting area is clearly one of the best green tourism destination in the world. To add to it, there are many holy hindu and Buddhist sites like Pashupati Nath, Janaki Temple, Swayambhu, Lumbini etc. Not to forget is Himalayas with Mount Everest.

  1. Hotel and Hospitality, and Real Estate

The tourism potential explains the importance and potential of hotel and hospitality, and real estate sector of Nepal. Nepal is sure to become a good economy in the years ahead as a fine tourism destination and a market place with the likes of Mauritius, Switzerland, and Singapore.

  1. Financial Institution (IB, Venture Capital, Mutual funds etc)

Retail Banking has survived very hard times in Nepal. Even when many companies were dying, these banks stood strong with the constant liquid flow into the economy in the form of remittances. Now, the market is poised to grow to other types of FIs like Investment Banking, Venture Capital, and Mutual fund.

  1. Infrastructure (Power and Transportation)

Nepal has second largest potential for Hydropower after Brazil and both of the neighbors (India and China) are hungry for energy. So, there are the resources and there is the market. It is just about tapping it at the earliest and benefiting that is in waiting.

Also, Nepal has very weak transportation system. It will need private investment in both traditional ways like Road, Railway and Airport, as well as non-traditional ways like Rope ways. Nepal can be one of the biggest market for Rope Way Companies.

  1. Apple export

Nepal produces on of the best quality Apple (in Humla and Jumla). They are searching market for centuries and now is the time when world should get chance to taste those sweet apples.

  1. Healthcare

Sri Lanka has done much in the field of Ayurveda and now Kerala is following it. Nepal has the cold climate and the herbs. It is the market awaiting investment. Also, there is huge opportunity in other forms of Healthcare services Nepal can provide to the world in far more competitive price than Philippines or India.

Saturday, April 21, 2007

Vision Developed Nepal 2025

Well, you may be laughing reading this topic, which is seen impossibility looking at the present context. You may call me over optimistic but i still argue that the vision is achievable. If a political solution for the Maoist problem is worked out then this goal will be a reality not a dream. Now, let’s analyze how far we are really from the framework.

Firstly, i would like to make all Nepalese aware of our present economy. At the stage when all South Asian countries are enjoying a very high economic growth rate, we are engaged in a pre-twentieth century war of regime change. When all other South Asian countries and China are recommended as the best investment areas in the world, foreigners fear visiting Nepal due to security threats. China enjoys economic growth rate of about 9%, India 7%, Pakistan 7%, Bhutan 8%, we are staggering at 3-4%. This growth, i hope is not by the increment of our indigenous economy but rather it is the reflection of Indian growth in our soil due to highly integrated economy. For the last five years a substantial budget has been wasted for defense purpose which has no future in itself.

Nepal being a country between two giants, China and India, is one of the most secured countries of the world. One's aggression towards Nepal will definitely endanger the other, so we have both the snake and the stick automated. In this context, we should also be aware that aggression of any of the two neighbors cannot be defended even we have our full potential exploited. so, its the waste of our resources to keep huge army. It is always better to tackle the internal threats by home security forces like Nepal Police and the Armed Police. Increase in the strength of Armed Police and decrease in strength of RNA will even give good global message about peace initiative. This will ensure more help for reconstruction and also private investment will grow along with it. Nepal, a economy of less than 10 billion $ enjoys about 1 lakh army while Brazil, a economy of above 700 billion $ have just 65,000 army. This statistics shows a real threat of Nepal moving towards a failed state with economic dis rupture. Taking in mind the outcome of military involvement in Sri Lankan LTTE crises, Indian J & K and Manipur crises, it would be tactful to search for a peaceful referendum with all the possible negotiations.

It is equally important that Maoist must be well aware that in the name of revolution whatever economic setback they are enforcing to weaken the govt, they are weakening themselves. WE Nepalese are powerful only when Nepal is developed. It should be noted by all politicians of all parties that they will have a good life being a citizen of developed Nepal, then being a ruler of failed Nepal.

Corruption, the definition of this word changes with the figure doing it. No one sees black money in his home while other's money is seen with suspect. A bureaucrat or a politician often enjoys sending their relatives in foreign scholarship seats. While sending his son/relative in place of some one more capable candidate, the official never know that he is destroying the future of his grand children and their relatives. He is actually throwing Nepal's future while he throws a able candidate. The able candidate could be the like of Bill Gates, Albert Einstein, JRD Tata or Sameer Bhatia. This is a serious concern and it has to be investigated by the Investigation authorities; but I am sure they can not do it as they are themselves part of this corrupt culture. It is even more difficult to act in this area as the main players are Indian and Pakistan Embassy. I thank our neighbors for exporting corrupt culture to Nepal without any bureaucratic hurdles.

The culture of favoritism has made every Nepalese a victim. The good professionals are left out in favor of near and dear ones. This has sickened almost all government, public and private enterprises. Hardly anybody work to his best due to the lack of challenges and fair reward.

I never understand why a majority of Nepalis are having anti-Indian sentiments. India is one of the best possible neighbors any country can have. We can see the fate of Haiti (close to US) or Taiwan (close to China). They are struggling to save their sovereignty, while India has always respected ours. Also, Indians are the best possible people in the world in terms of Human Values. Ask anybody working under Indian boss, he will tell you that.

To develop Nepal, it is essential to integrate the economy further with India while expanding trade with China. Nepal can be the best Investment destination for both the Indian and Chinese to enter each other's market. Apart from peace, we have everything, from large number of technicians (engineers), management graduates, medical professionals, and English speaking graduates of other fields. This can place Nepal into one of the best Knowledge based business process outsourcing destination. Also, Nepal has the potential to become to be huge service market along with manufacturing hub due to geographical location of being between India and China. Now, we need to exploit this unique potential we have earned by development of our great neighbors.

To attract FDI (foreign companies), along with security, infrastructure development is mandatory. But if the defense expenditure is lowered and corruption controlled, the saved revenue is sufficient for early stage progress.

Now, coming back to the topic again, let’s analyze whether Vision Developed Nepal by 2025 is feasible or not. I say again, it can be done; but it matters how we develop. When France and Germany developed, it was compulsion fro Swiss to develop; so same applies here, Nepal has to develop when India and China develops. We have to and we will, in any case. But being at that stage, we may be forced to have puppet government, be lunch pad for foreign troops, be playground for foreign intelligence agencies or be a smuggling hub. This may even endanger our sovereignty.

To save Nepal from such tragedies, Nepali political circle should learn one lesson, "Run country by economic values and not by political values." Whether it is democratic parties or the Maoist, whoever comes to power their goal should be economic development. If the economic development programs are brought forward which is people centric but not populist, no one can stop Nepal from being a Developed Country by 2025.

Some of these programs can be -

* Lowering of Electricity Tariff to 2 to 3 rupees from current 7 plus. Nepali industries must get cheap electricity in the water rich country like Nepal to remain competitive in the Global Markets, when they have to expend high on transportation to reach foreign markets due to lack of Nepal's exposure to Sea.

* An immediate Free Trade deal with China on products that are not produced in Nepal. Nepal can have negative list of goods which needs protection, but this list has to be as small as possible. It will favor cheap consumerism to Nepali consumers and open up large Chinese market for Nepali companies.

* Establishment of at least two more international standard engineering colleges like IOE, Pulchowk and two international class management colleges (business schools). These colleges needs to be kept far from politics and made autonomous.

* Effective implementation of VAT and other revenue collection systems. A strict monitoring system and harsh punishment should be made for economic defaulters.

* Implementation of E-Governance System where ever possible.

* Demilitarization totally or military liquidation to have total army men of 25000. They should be well equipped strong Army Personnel working with equal potential as that of developed nations. This will save life as well as revenue. The extra revenue can be used for Infrastructure Development, Education and Health.

* Removal of oil and gas subsidy. The saved revenue can be utilized for building new and huge hydro-power projects.

Jai Nepal

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