Nepal | May 27, 2020

EDITORIAL: Sick enterprises

The Himalayan Times
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It would be fitting to take this into account before taking any decision to revive the sick and now defunct industries

Most of the public enterprises have been closed and they are finding it difficult to survive. Prior to the political change in 1990 some of them were doing relatively well, but now many of them are on the verge of collapse.

This can be attributed to the rampant politicisation and inefficiency of the management, corruption and also nepotism in the hiring of staff. As a result, most PEs had more staff than required, ultimately leading them to run at a loss forcing them to shut down in a number of cases.

Now the government is mulling reviving several state-owned enterprises.

If the government has its say, the Nepal Drugs Ltd. is to be revived. This public undertaking is facing a loss of billions of rupees. At one time, it was doing pretty well but it failed to upgrade its production as per the requirement of the World Health Organization good manufacturing practice (GMP) standard as it lacked the required resources.

It is being mooted to revive three PEs including the Nepal Drugs Ltd. in this fiscal. The government should also encourage the private sector to invest so that that they can be revived.

Currently three modalities are to be opened by the government including the management contract with the private sector, public private partnership (PPP) and solely by the government for the revival of the sick industries.

Under the new Industrial Sector Reform Action Plan of the Ministry of Industry (MoI) the government would take steps to revive the state-owned enterprises inviting foreign investors by showing that it is for improving the industrial environment in the country.

One should learn from the past as to why most of the public enterprises were running at a loss. A few of them have however managed to make profits. These undertakings are the Nepal Oil Corporation (NOC), among others, because of enjoying a virtual monopoly.

The seed money announced by the government could help in setting up of enterprises in the rural level. It is an irony that the government is set to intervene for massive enterprise development programmes.

The government has also floated an enterprise development programme targeting the youths who are the most productive segment of society and women. Under this programme youths and women can apply for the necessary funds from the district administration office to start an enterprise.

With only a modest growth and the high unemployment rate it is an irony that the government has to do so. Economic development should best be left to the private sector while the role of the government would be to provide health services, education and security as well as monitoring the economic activities taking place, among others.

The government would also not be providing controlling stakes in government-owned industries to the private sector.

Hopefully, this will work out and the bid to revive the sick industries would be proper. The government has made substantial investments in the PEs but most of them have gone to waste.

Therefore, it would be fitting to take this into account before taking any decision to revive the sick and now defunct industries.


Travel warning

Weathermen have forecast that this year’s monsoon will remain active for over a week than the previous years.

This year’s monsoon has been a boon for farmers due to regular precipitation across the country. But it has also become a bane for other sectors such as tourism and trekking business as most of the roads in the hilly areas have been washed away by landslides triggered by incessant rains that have hampered trekking and adventure tourism in most parts.

Keeping this in mind the Annapurna Conservation Area (ACAP) has issued a warning against trekking in the north-east part of the area alone. The travel warning was issued especially to the foreigners who mostly want to trek alone without help from local tourist guides.

This had to be issued after roads to popular tourism routes to Sikles, Chansu, Yangjakot, Saimarang and other areas such as Upper Madi were badly damaged or caved in by landslides caused by heavy rainfall.

It will be safer to embark on a trek after the monsoon is over after September.

Every year many foreigners are reported to be missing or getting injured on the way to ACAP area as they travel there without local guides and adhering to the travel warning.


A version of this article appears in print on September 13, 2016 of The Himalayan Times.


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