Nepal's lowly rank of 118th in the Forbes magazine's new annual listing of 'Best Countries for Business', among the 144 countries surveyed, was to be expected. Among the various markers the magazine uses to come up with a composite ranking, Nepal performs the worst in 'trade freedom', followed by 'technology', 'innovation', 'monetary freedom' and 'corruption'. "Nepal has considerable scope for exploiting its potential in hydropower," says the report, "but political uncertainty and a difficult business climate have hampered foreign investment." Additional challenges to Nepal's economic growth, according to the report, are its landlocked status, persistent power shortages, underdeveloped transport infrastructure, civil strife, labor unrest and Nepal's susceptibility to natural disasters. The country can do nothing about its landlocked status or about its susceptibility to natural disasters. But there are plenty of other areas where a lot could be done on our own to improve the country's business climate.As the report points out, Nepal's biggest resource is its water, something it could exploit to its great benefit. Even if a tenth of its hydro potential of around 45,000 MW could come into pipeline, Nepal would not just have enough power for itself, it would also have plenty to sell to the neighboring India and other SAARC electricity markets, with all its attendant economic benefits. The reason the country has not been able to exploit its hydro potential is lack of even tenuous consensus among political parties on big power projects. Whenever a government in power mulls a big project, in cooperation with India or international financial organizations, the opposition must oppose the deal tooth and nail. Much noise is made about safeguarding the country's sovereignty and not selling our rivers. But if we could develop these big projects with our own resources, as some believe we can, why are Nepalis being needlessly made to spend most of their nights in complete darkness? Why have countless industries, the main drivers of the country's economy, been forced to shut down?
Unless our major parties develop a common vision for electrification of Nepal, and export of excess power, things are unlikely to change much. But such a common vision will be hard to come by. The prolonged political transition was supposed to come to an end with the promulgation of new constitution. But the new constitution has given rise to as many problems as it has helped solve. The ongoing Madhesh Unrest has already led to the loss of around a million jobs, according to the Federation of Nepalese Chambers of Commerce and Industry (FNCCI). Another million jobs were lost after the devastating earthquakes earlier this year. But nearly eight months after the big April 25th earthquake, the government has not even been able to give final shape to the reconstruction authority to rebuild lost infrastructure. Black-marketers and cartels are flourishing. Inflation, already in double digits, is threatening to go out of control. Things should improve when the Indian blockade is lifted. But not much. You cannot compensate for the lack of imagination of the political class. Had we been able to properly harness our water resources and be self-reliant on at least agricultural products, as we were up until the 1980s, the Indian blockade, economists believes, would not have half its present impact.
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