Espouse e-economy

Prioritise ICT as one of the growing industries in the country and implement policies accordingly


The ongoing digital revolution has completely transformed the industrial sector, economic practices, availability of services and dissemination of information on a global scale. It continues to alter the social paradigm by replacing the traditional means of production and distribution mechanisms. Being a least developed country struggling to stabilise its political and economic transition, Nepal is yet to reap the benefits of digital revolution thereby failing to establish itself in the global digital platform and employing Information, Communication and Technology (ICT) to achieve its socio-economic agendas.

In the prevailing global order, if Nepal fails to subscribe to digital revolution and relies on long-established conventional methods to administer commerce, trade and governance, it will be difficult for Nepal to sort its perennial problems and compete in the global arena.

The government has targetted 7.2 per cent annual economic growth rate in its current 14th Plan (2017-2020) and thrives to push the economy at the targetted growth rate. It has identified tourism, agriculture, small and medium enterprises (SMEs), and energy as priority sectors. In order to ensure exponential growth in these priority sectors, the government will have to employ advanced ICT and other digitisation practices as well because it’s impossible to expect high productivity via traditional methods. Furthermore, with the transition to federal system of governance, the state has the perfect opportunity to institutionalise e-governance and build digital economic platforms in every basic level to engage the larger populace in trade, commerce and services.

Present scenario

For a long time Nepal struggled to make headway in providing accessible internet services to people but with the recent mobile phone boom and encouraging participation of private Internet Service Providers (ISP), people now have access to internet connection via mobile phones and other devices. As a matter of fact less than 30 per cent of Nepali used the internet in 2010 but the latest data from Nepal Telecommunication Authority’s (NTA) Management Information System (MIS), reveals that 63.17 per cent of Nepal’s population is now connected to the internet.

Access to internet has definitely become easier and cheaper and people are slowly adapting to the digital platform for information dissemination and other activities. At present there are 24 ISPs in the country and most are using fibre connectivity to provide internet services to people. Sumit Jana, CTO, World Link Communication, one of the largest ISPs in the country, shares, “It is true that most of the ISPs are switching to fibre. ISPs are mainly focussing in urban and semi-urban areas to provide internet access via fibre whereas in rural areas, the customers have to depend upon wireless network. The internet scene in the country is exponentially expanding and with other infrastructural supports, ISPs and telecommunication companies can provide more easy and reliable internet access to people.”

Besides the encouraging involvement of ISPs, NTA is also laying optical fibre along 2,376-km of the Mid-Hill Highway to provide broadband connectivity to every local level. Pursuttom Khanal, Senior Director at NTA says, “NTA is working to provide broadband internet access to every ward, government school, health post et cetera within a year. However, the optical fibre project is likely to suffer due to delay in the construction of Mid Hill Highway.”

Direct linkage of internet bandwidth from China is another major development that will further expand the horizon of internet services in the country. In December 2016, Nepal Telecom entered into an agreement with China Telecom to acquire internet bandwidth. The commercial operation of Chinese bandwidth will ensure that Chinese contents and feeds are directly transmitted to Nepal. Before the involvement of China, Nepal was fully dependent upon bandwidth from India. However, there are many concerns over the reliability of Chinese bandwidth as the geographical adversities along the Nepal-China territory are likely to affect continual and reliable connectivity with Chinese source.

Khanal shares, “With access to Chinese bandwidth, Nepal has more opportunities to strengthen its internet service as other ISPs and telecommunication companies can opt for Chinese bandwidth in coming years. That said, optical fibre from China has to be connected to Nepal via road network and the unreliable road connectivity between Nepal and China threatens the reliability of the Chinese bandwidth connectivity.”

Need for digitisation and e-governance

Regardless of increase in internet penetration and access, it is important to note that easy access alone does not ensure internet’s role in creating opportunities for people. Rather than celebrating the increased access to internet, it’s high time to evaluate the impact of internet penetration in driving social and economic changes to engage people in the digital platform.

In recent years, global economies are slowly adapting to digital innovations and complete digitisation of the economy has become unavoidable. Companies like Airbnb and Uber are taking digital economy to new heights by changing the orthodox concept of industrialisation and service deliverance. If Nepal is to catch up with global trends, it has to subscribe to the changing trends of digitalised economy and invest in technology extensively. Nepal needs to identify and align with the digital economic practices that match its ambition and create a strong economic base for high value production.

At present, agricultural sector and SMEs can benefit from the increasing use of ICT but Nepal has failed to institutionalise the applicability of ICT in these sectors. Sibjan Chaulagain, Managing Director at ICT for Agri shares, “Use of information technology can totally transform the agricultural sector in the country. At present, we are providing SMS services and other app services to farmers. If only we can manage to increase the scope of technological use in Nepali agricultural sector at affordable costs, we can easily see the changes in productivity in a short period of time.” The government has been mainly prioritising subsidy on loans and insurance schemes but it has neglected how technological platforms can assist farmers by equipping them with economic and market rights.

Clever use of ICT can also revolutionise the SMEs by empowering micro-entrepreneurs through knowledge sharing and by building digital growth platform with easy access to market. Rules of business are changing and Nepal needs to abandon its traditional market practices that only serve the traders and exploit the producers. A transition is needed to create equally accessible market for both producers and consumers by dismantling archaic distribution cycle and adopting technology that can create advanced online platforms and distribution channels.

While the world has moved on to digital economy with majority of the businesses operating through online presence, Nepal is still lagging behind in adopting e-governance and improving efficacy of the bureaucracy. If the government manages to fully implement its e-governance plans, it will be able to serve the public with just a click and also ensure transparency and accountability.

High-level Commission for Information Technology has adopted e-governance master plan which mainly focusses on three components of government services — Government to Customer, Government to Business and Government to Government. However, the e-governance project is being implemented at snail’s pace and people are yet to experience e-governance facilities in its full capacity. Ekandra Lamsal, expert on e-governance and ICT shares, “We have a framework for e-governance but poor implementation has made it difficult for public to access these services. With the transition to federalism, local levels are trying to adopt e-governance through official website but there is no basic standard and uniformity in the developed websites. As a result, many government-owned and run websites are useless in terms of delivering e-governance.”

Stressing on the importance of creating integrated system for e-governance, Subash Dhakal, Director at Department of Information Technology shares, “For effective implementation of e-governance, we have already created a government cloud to host government applications and have also proposed a plan entitled ‘Engineering Government IT Architecture in Federal Structure’ which deals with the integration of online data based services in different levels of government.” He further adds, “For effective implementation of e-governance and easy access to government’s services, we need to create uninterruptible system sorting out all the standard data and registered information in detail. Once the proposed plan is approved, we can move ahead with the project and construct integrated IT framework within two years to provide clear outline for the use of IT in all three tiers of government.”

The task ahead

Nepal needs to increase its investment in ICT and create educational, technical and financial infrastructure to expand innovation in ICT and digitisation in the long run. However, to meet its economic needs in the short term, Nepal can opt to import technological innovations and effectuate them in the local context. Both China and India have made immense progress in the technological field which provides favourable scenario for Nepal to learn lessons from its immediate neighbours. The government needs to acknowledge ICT as one of the growing industries that stimulate economic growth, provide jobs and contribute to innovation, and implement its policies accordingly.