Remove the hurdles to self-sufficiency

Published On: February 3, 2019 02:30 AM NPT By: Republica  | @RepublicaNepal

Here is a piece of good news. According to Nepal Cement Producers’ Association, Nepal has become self-reliant in cement production. They claim that Nepal can very soon (from the next fiscal year) be exporting cement. Industrialists argue that cement industries have received the investment of around Rs 200 billion and it has annual transaction of worth Rs 150 billion. This is an achievement for Nepal but it took us years to reach this stage. For long, private sector presence in cement production was almost nil. Himal Cement Company first started the production of cement in Nepal in 1960 but the private sector came into the scene only 16 years ago. The 56 cement industries that we have—including two state-owned companies Udayapur Cement Industry and Hetauda Cement Industry—produced nine million tons of cement in the last fiscal year. This is four million tons less than 13 million tons capacity yet we did not have to import much—only five percent during the same period. This success story is the proof that given the business-friendly environment Nepal can become self-reliant on many of consumable items.

Nepal has already become self-dependent on eggs and the government plans to make the country self-reliant on meat and milk as well. Likewise, industries in the country have been exporting iron and steel products. But as things stand, there are several hurdles to the road to self-sufficiency. We have lagged behind in production of many other goods mainly because of frequent change of the government, policy instability, taxation issue, complex land acquisition process among many others. This discourages many potential investors—domestic and foreigners alike—from coming into Nepal and investing. In the World Bank’s latest global ranking on the ease of doing business, Nepal fell five places down to 110th position. World Bank’s Doing Business 2019 report shows Nepal’s performance has gone down in the ranking of 190 countries mainly because of complicated process of tax payment. All these hurdles, together, have made us a country of huge trade deficit. According to Department of Customs, our trade deficit for the five months of current fiscal year alone has amounted to whopping 570 billion rupees. This should be the cause of concern for all.

Now is the right time for the government to work toward becoming a self-reliant country on as many goods as possible. The two-thirds majority government can amend laws and policies that may have hindered in creating conducive atmosphere for business communities. With load-shedding becoming the thing of the past, our industries have more leverage to produce goods than before. Thankfully, labor strikes have almost become rare. It is a common wisdom that we fare badly in foreign trade because we do not produce and we virtually import several of the items, setting notorious record of trade deficit for the country. Nepal should be able to redefine this status. Cement producers have sent the positive signal. This success in cement industry should be expanded to as many other sectors as possible. For this, the government should be able to clear every hurdle that comes along the way.

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