Enterprise and entrepreneurship create businesses which then generate jobs, thereby fuelling economic growth

An unprecedented surge in imports is hurting the country’s economy. Imports, according to a recent central bank report, have surged like never before, leading to greater outflow of funds from the country. Fund outflow surpassed inflows (technically referred to as balance of payments) by Rs 24.8 billion in the first month of the current fiscal year despite a robust growth in remittance income, as imports of merchandise goods surged by a staggering 54 per cent to Rs 120.6 billion. But the surge in imports is not a problem in itself; the problem lies with Nepal’s failure to match its export with what all we bring into the country. The monthly macroeconomic report of the Nepal Rastra Bank (NRB) released at the end of September shows exports of merchandise goods grew by a mere 3.2 per cent to Rs 6.9 billion in the one-month period. Take inflation of 4.2 per cent and falling currency into account, Nepal’s exports in the first month of this fiscal year registered a negative growth in real terms. Nepal needs immediate measures to fix the imbalance in exports and imports. Or else, the country’s trade deficit, which stood at 39 per cent of the gross domestic product last fiscal year, is likely to widen further. These are some scary figures.

What is more worrisome is ballooning trade deficit is also killing jobs. In a country where unemployment rate is relatively higher, a widening trade deficit—with minimal industrial and manufacturing base—means non-utilisation of the available human capital. Already, the country sees around 1,500 youths—men and women—flying abroad, especially to the Gulf nations and Malaysia, in search of jobs. In this context, the government plan to set up Industrial Enterprise Development Institute (IEDI) in all seven provinces can be a good move. The Cabinet on Sunday approved the proposal of the Ministry of Industry, Commerce and Supplies to this end with an aim to strengthen the industrial and entrepreneurship sector.

Unless the available human resource of the country, especially the youths, can be retained and engaged within the country, prosperity will remain a pipedream. Since the government now has given the nod to the proposal of IEDI in each province, it should work to strongly implement. The concept of IEDI, however, is not new. It was established back in 1996 under the Industrial Enterprise Development Institute Act with an aim to develop human and knowledge resources for entrepreneurship and business promotion. The institute had largely remained limited only at the central level, with its branch offices in some places outside the Capital which are now in Provinces 1, 3, 4 and 5. There is a need to activate the institute and sustain the vision. Enterprise and entrepreneurship have largely been on the back burner in Nepal with governments and policymakers failing to pay the required attention to the fact that they can contribute to the national economy. The federal and provincial governments should empower the IEDI and attract youths towards enterprise and entrepreneurship. Enterprise and entrepreneurs create businesses and subsequently generate jobs, thereby fuelling economic growth. Engaging youths in enterprise and entrepreneurship also boosts their morale and confidence. Entrepreneurship can create social change and help in community development.

Settle the dispute

Katari Municipality in Udaypur district has recently imposed a ban on the extraction and transportation of limestone to be used by two local cement industries – Saurya and Cosmos Cement Industries – hitting the workers hard during the festive season and also causing huge financial losses to them. The municipality officials have said they had to impose the ban because the industries failed to come under the local tax system.

However, the industrialists claim that they had been paying production and pollution taxes to the Department of Mines and Geology which issued the license. The municipality must amicably settle the dispute at the earliest. Such kind of dispute with the industries which provide jobs to local people will harm the investment climate in the country. The concerned officials must inform the industries in advance about the provisions of local taxes applicable to them before taking any legal action. Imposing a ban on extracting the raw material will hit hard the industries. Both the sides must settle the dispute amicably.