Policy that pays

The economic liberalisation process that started in Nepal in early 1990s could not yield expected results similar to the ones in other South Asian countries. Nepal failed to make the system business-friendly due to its inability to introduce timely policy reforms in the economic sector. Reforms in policies concerning taxation, export promotion and public-private partnership are required to cope with the challenges of globalisation and liberalisation. Some government functionaries insist that without evolving a competitive outlook no progress can be made. The Asian Development Bank (ADB) has, for instance, stressed the need for a continued dialogue with donors on policy reform aspect for better results. Since Nepal is already a World Trade Organisation (WTO) member, the country should go for need-based policies especially to facilitate effective functioning of the private sector.

There is no doubt that lack of policy sustainability and timely reforms have resulted in lacklustre performance and unsatisfactory economic growth. The reforms thus are a must. But while formulating new policies or streamlining the old ones, the policy-makers should bear in mind that a free-market presupposes policies that are compatible with WTO provisions

also. At the same time, all sorts of bureaucratic hassles should be immediately done away with. For example, Nepali exporters have been complaining for quite some time that they have to complete some 60-odd documents before their products leave the country. Doing away with this sort of unnecessary impediments is precisely what the authorities need to concentrate on. The country needs efficient working mechanisms. It would be better if policy formulation and implementation contribute to boosting the private sector enterprises. Also since foreign direct investment (FDI) plays a crucial role in achieving economic growth, the decision-making process and the accountability on the part of the concerned bodies should be appropriately emphasised. It would be better to have a one-window arrangement for FDI to avoid cumbersome bureaucratic procedure. It is high time the policy-makers focussed their efforts on how to make the country capable of competing with others. For this, reforms should be oriented to the creation of environment that is friendly to human resource, investment and visible development.