CNI issues wake-up call to govt

Kathmandu, October 27:

Though the international financial crisis has not yet affected the economy of Nepal but in the long run it could have an impact. Experts feel that there is an immediate need for discussion on improvising precautionary measures for the country’s economic safety.

In a meeting between representatives of Confederation of Nepalese Industries (CNI) and Finance Minister Dr Baburam Bhattarai today, CNI members discussed with him the present global economic crisis and pointed out that as the present foreign investment level was low and export business to the US and Europe unsatisfying, the global economic crisis might not have such an adverse effect on Nepal’s economy. They warned, however, that in the long run it might generate a negative effect in the country.

CNI also pointed out that the number of tourist arrivals might drop due to the worldwide recession. They also said foreign direct investment (FDI) could peter off, which in turn may affect projects related to hydropower and other infrastructure. “Therefore, while the global financial crisis has not yet had a huge effect here, the government still needs to start taking precautionary measures,” stated CNI.

It has urged the government to take important steps regarding the transactions in housing and land and overheated capital market. To minimize the effect of the present dilemma, industries should be made competitive and the duration for TR credit payment should be increased from 90 days to 180 days.

The cash reserve ratio (CRR) of banks should also be raised from 0.5 per cent to one per cent to keep projects funded.