The experts, who jointly launched the Economic Freedom of the World Report 2012 on Wednesday, made such remarks mainly referring to government´s recent moves, such as forceful demolition of private houses and enforcement of maximum retail prices (MRPs).[break]
Economists including Dr Chiranjibi Nepal strongly condemned the government´s move under which it forcefully demolished the private houses in different parts of the Kathmandu Valley in order to give pace to road expansion drive.
Likewise, Bhaskar Raj Rajkarnikar, officiating president of Federation of Nepalese Chambers of Commerce and Industry (FNCCI) vented ire against the government for enforcing the MRPs on 15 essential food items.
Both the moves, however, had drawn accolade from wider mass as well because people believed those moves will benefit them eventually.
But what they have not realized in the process is that by endorsing government´s move to intervene in private property and market operations, they have also given up their rights to own private property and to do businesses autonomously, said Rajkarnikar.
“If you still believe Nepal is an open market economy you are a fool, for our interim constitution clearly cites that ours is a mixed economic policy. And the message of the government´s actions is pretty clear, the economy will be state-controlled,” Rajkarnikar stated.
Former bureaucrats such as Purushottam Ojha agreed with what Nepal and Rajkarnikar said. They even raised questions over sustainability of the MRPs practice.
“The prices change in the market every alternate day. Even on imported items, the prices tend to fluctuate every week. But the new exercise by the government does not ensure MRPs will be adjusted accordingly,” said Ojha.
Instead of controlling prices, he said the government should have exhibited strong political will and acted to do away with cartel, syndication and other anti-competitive practices.
“The government had numerous mechanisms and law at its disposal to correct weaknesses seen in our market. If it had chosen to utilize them, consumers would have benefitted on a range of consumable items, and not just 15 items,” said Ojha.
Given these sharp shift in policies, experts said Nepal will find itself poorly rated in the economic freedom report in the next two years.
However, in Economic Freedom of the World Report 2012, which was generated based on 2010 data, Nepal has climbed 7 steps in the global ranking and was positioned at 110th among 144 countries.
This indicates the country´s policies in 2010 encouraged economic freedom, enabling people to freely engage in economic activities they wished to pursue. Owing to its liberal policies, Nepal stood second most economic freedom providing country in South Asia after Sri Lanka (ranked 100th position).
India and Pakistan were ranked same at 111th position, while China was ranked 107th in the global ranking. The top 5 freest economies for 2012 were Hong Kong, Singapore, New Zealand, Switzerland and Australia, while least free economies were Venezuela, Myanmar, Zimbabwe, Republic of Congo and Angola.
The UK was ranked 12th and US 18th in the global economic ranking report 2012.
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