Economic crash looming, warn experts
KATHMANDU; Experts and authorities are concerned about the economic situation of the country, which if not countered soon and effectively will send the country into hyper-drive, causing complete economic destruction.
“Balance of Payment (BoP) has plunged into the negative while the investment situation of the country is far from good. Banks are facing liquidity crunch and economic growth is slipping downward,” said Anant Kumar Mainali, central member of National Economic Concern Society. “If action is not taken soon, an economic fiasco will transpire.”
Nepal is at an economic crossroad where if the country is not made economically sustainable, it is bound to become a failed economy. According to experts, this transitional phase needs to be countered by making strong decisions regarding investment and self-sustainable options. “Inflation is soaring but the government is still not serious. The government is to blame for such a situation. Its negligence and incompetence has to stop as the economic situation in the country is very severe,” added Rudra Prasad Upadhyay, Head of Economic Department, Tribhuvan University.
According to Upadhyay, if economic discipline is not maintained in the economic system the country will collapse in the next ten years.
As per data compiled by Mainali, there have been more bandhs than working days in the country. “When there are more bandhs than working days, how do investors play a role in developing the economy?” he asked adding that the money supply has been 3 per cent while what the country needs is at least 14 per cent.
The data also reveal that in 1990 there were 4,200 industries while in 2010 there are only 3,600 industries. Similarly employment has gone down from 550,000 to 3,00,000. “Instead of adding industries and creating employment, the political instability in the country has hindered the growth of the economic sector,” said Pradeep Jung Pandey, member Federation of Nepalese Chambers of Commerce and Industry (FNCCI).
There is neither facility nor a conducive environment for investment in the country thanks to the increase in load-shedding hours, constant political bickering, rising number of murders and growing threats to industrialists.
“Despite vast opportunities in Nepal there is no secure working environment for existing investors, leave alone those in the pipeline. If the government does not cater to investors’ needs, the situation will only worsen,” added Pandey.
According to data, Nepal is on the bottom rung of the ladder in production capacity in South Asia. “It is at the bottom among the electricity deficit nations as well,” said Pandey. The main factors hindering the growth of the country are load-shedding, labour issues, security and absence of a productive working environment.