Nepal | June 25, 2019

EDITORIAL: SEZ in limbo

The Himalayan Times

Without regular and required amount of energy, how can the much-hyped SEZ set up long ago function?

The government has an ambitious plan of setting up 14 Special Economic Zones (SEZs) in all provinces—two each in every province—to promote export oriented industries. In order to promote export, then Parliament enacted SEZ Act in 2016, offering various incentives to industries that utilise domestic and imported raw materials and labour in the SEZ. The law has guaranteed income tax exemption for those industries inside the SEZ for the first five years of their establishment. Besides, those industries that use up to 60 per cent of domestic raw materials will get 50 per cent income tax exemption for the next five years and 25 per cent tax exemption for the following five years. The SEZ law also has provisioned to give zero customs duty to such industries which import raw materials. As per the law, these industries set up in the SEZ are required to export up to 75 per cent of their products. Other countries, including China and India, have also given various incentives to the export oriented industries to boost export, generate employment opportunity in the country and earn foreign currency. Bhairahawa is the first SEZ where 69 plots have been allocated for export oriented firms.

Although the Bhairahawa SEZ authority has said all the plots have been booked, only 11 of the 19 business firms which had applied for setting up industries have taken approval so far. After the SEZ authority realised lukewarm response from the businesses and industrialists, the authority has extended the deadline to these firms till February 25 to get approval for setting up businesses. It shows investors are reluctant to set up industries in the SEZ due to lack of infrastructure. Bhawani Rana, president of the Nepalese Chambers of Commerce and Industries, has attributed the lukewarm response from the domestic investors to poor infrastructure in the SEZ. No investors will be attracted to set up any industry in any SEZ or outside it unless the government develops adequate infrastructure.

Office for customs clearance, communications, road, drinking water, security, banking and warehouse facilities and uninterrupted supply of power are necessary to make any SEZ fully operational. Earlier, the government had assured 50-MW of dedicated power supply to the SEZ. But the SEZ authority failed to coordinate with the Nepal Electricity Authority (NEA) to build the transmission lines from Butwal to the SEZ. This is the main reason the investors have shown no or little interest in setting up their industries there. NEA authorities have said they are building a transmission line up to Dhakdhai as per the earlier plan and that the rest—15-km long transmission lines from Dhakdhai to SEZ—should be built by the SEZ authority itself. If that is the case, the SEZ authority should be blamed for failing to complete its task on time. SEZ Executive Director Chandika Bhatta has stressed the need of proper coordination among the government agencies to ensure quality infrastructure inside the SEZ to attract investors in the zone. As the SEZ executive director, Bhatta is solely responsible for coordinating with government agencies, including the NEA. Without regular and required amount of energy how can the much-hyped SEZ set up long ago function?


Play it safe

The country has seen a rise in number of HIV infected people and people with sexually transmitted infections (STIs). This is despite the Nepal Demographic Health Survey 2016 showing that 72 per cent of women and 92 per cent of men “know that use of condom prevents HIV and other STIs”. According to the National Centre for AIDS and STD Control, a total of 30,646 HIV cases were reported in the country as of July 2017. Among them, 18,989 are males, 11,535 females and 122 are transgenders.

Correct and consistent use of condoms is one of the most effective methods of protection against STIs, including HIV. Female condoms are also available, but they are not used as widely as male condoms. Despite knowing condom’s effectiveness, in Nepal, people, it seems, are not using condoms correctly and consistently. On top of that, unavailability and the taboo associated with sex could also have played some role in less use of condoms. So there is a need to raise awareness about the benefits of condoms, which also provide protection from unwanted pregnancy. Condom distribution programmes, which can be cost-effective interventions to prevent the spread of HIV and STIs, should be promoted.

 


A version of this article appears in print on February 14, 2018 of The Himalayan Times.


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