‘No excuse for growth slowdown’

Kathmandu, February 24

Finance Minister Yubaraj Khatiwada today said that Nepal does not have any excuse for slowdown in its development and growth despite the decelerating global economy.

Addressing a workshop on ‘Investment Climate Workshop in Nepal’, Khatiwada said that Nepal is yet to achieve its potential growth in terms of development and economy and that the slowdown in the global economy should not be an excuse for the country’s deceleration.

“Nepal is preparing the groundwork for better growth and development rate. As our growth and development is still low and slow, global slowdown cannot be an excuse and we need to accept the challenges to continue growing despite the global slowdown,” he said.

Citing that the dynamics of business have changed in Nepal compared to the situation a few years ago, Khatiwada stressed on the need to collaboratively enhance business environment, promote the private sector and bring in foreign investments amid the new context of federalism.

“We have new sets of bureaucratic practices, governance, values and rules. However, despite good policies and institutional reforms, our capacity to deliver has not improved much. This has to be addressed to ensure that Nepal maintains its growth momentum,” the minister added.

According to him, priority has to be accorded from all quarters to enhance the business environment for the private sector as Nepal is a private sector-led economy.

“The private sector constitutes more than twothirds of the country’s investment and a few sectors, including agriculture, tourism and trade, are exclusively led by the private sector.

However, the country is still plagued by a few constraints to growth and development,” said Khatiwada, adding that the role of the private sector would be to unlock those bottlenecks.

Along with bringing in new legislation to foster business growth and development, he also said that the government has been focusing on making the tax system more predictable, objective and accountable. “Tax system is a key component of doing business and there has been a departure in the whole tax administration in last couple of years,” he said.

Regarding issues related to tax rates raised by the private sector, Khatiwada said that tax rates are always subject to revision.

On the occasion, he also said that Nepal has been inking bilateral agreements with different nations on trade promotion and tax avoidance to foster business growth.

“We are assuring protection and security to foreign investors and making repatriation easier. In such a context, it is high time for foreigners to invest in Nepal,” he said, adding that Nepal needs to raise foreign investment by manifolds to achieve double digit growth as the country’s domestic savings is not enough to meet its investment demands.