Surest way to solve the financial crisis: Policy implementation before 2019
The current issue is that the economy's financial flow has grown precarious. However, we have not allowed Nepal's economy the opportunity to expand widely.
We are currently in a very challenging situation. Difficulty exists in the sense that the cash flow is currently in a critical state. Because cash flow is more important than profit and loss in business, it is getting increasingly difficult for everyone to work together. Not just for business. Every ordinary Nepalese individual is in this predicament.
In the economy, there is a chain effect. When the front wheel of a car moves, the rear wheel revolves. When a business has cash flow, the entire economy is active and dynamic.
However, now that cash flow is tight, it has generated several issues in all sectors, including the commercial, government, and public sectors. It has resulted in a financially problematic scenario. There are few exceptions where economic complexity does not generate problems.
Numerous causes of the problem
The current issue is that the economy’s financial flow has grown precarious. However, we have not allowed Nepal’s economy the opportunity to expand widely. We are economically backward because of our own actions. We are also the source of the economy’s problems. Even if there were no obstacles like a shortage of liquidity or a fragile cash flow in the economy, we would not have made much progress. As certain private-sector businessmen performed well in specific areas. The number of people employed increased. Increased output. If profit is created, we try to stymie it by entangling it in a tangle of legal entanglements. How did he manage the company so well? We aim to get him into a lot of legal trouble because of how much money he made. By making it easier as a policy, we will not encourage him to raise output and generate more jobs. In such a case, the country’s economy does not grow. Instead, it contracts.
The country’s economy deteriorates. And we become victims of Nepalese illiteracy. As a result, labor that impedes professional or economic advancement originates from a variety of sources. Like the government, government regulatory bodies, friends, acquaintances, neighbors, and so on. Those who dither in its indirect attack will likewise fall. For example, the pashmina, carpet, and garment industries thrived yesterday.
Garment manufacturing, real estate, and the stock market all thrived. However, rather than making it simpler for such enterprises to flourish, policymakers have sometimes introduced extra policy obstacles and impeded existing businesses. We drowned these companies ourselves. Foreigners did not come here to impoverish them. If a problem arises in a firm, it should be resolved. However, we are going toward erecting policy barriers that will cause the firm to fail.
Every economy has its own core benefits and disadvantages, or USP (Unique Selling Point-core benefits of Business). We end up blocking it by failing to recognize it. That area will then be devastated, and the cyclical effect will affect adjacent areas as well. And there will be some relief in the other locations as well. This situation must be resolved. At all levels, we must forsake the proclivity to hurl an ax at our own feet. One should be able to recognize that the progress of the other is solely in one’s own progress.
Crisis that has become unbearable for industrialists
The government says that the tax will be higher for industrialists. It also states that you should not make additional money. It should have been said, “Earn as much as you can, pay as much tax as you can.” Industrialists can only pay higher taxes if they produce and earn more than businesses. They can also generate employment. The government should recognize this. Not all business owners are capable of doing so. If that were the case, 30 million Nepalis would be business owners now.
However, how many individuals are accountable for a single industrialist? Employees, products traders, service agents, shippers, banks, wholesalers and retailers, various government agencies, consumers, and so on. The amount of employees in the industry that an industrialist runs reveals how much responsibility he has.
Whatever the corona pandemic or the global economic crisis, the industrialist must first solve the difficulties listed above. Only then would it be the obligation of the government to look after them. When this occurs, the enterprise or business is difficult. The government should recognize that it cannot function without the assistance of the state or the government and should formulate policies appropriately.
Many people in Nepal oppose the term capitalism. As much as possible, the administration refers to it as “social-inclusive economic growth.” Capital, on the other hand, is created by capitalists and capitalism. If the word has a problem, you should substitute another word. This is what will happen. The country will only experience a surge of progress if the capitalist elite can generate investable capital. The economy will crumble if they are obstructed.
According to the theory, if one capitalist makes a mistake, all capitalists will make the same mistake. When a politician or businessperson commits a mistake, it must be corrected. However, lumping everyone together and eliminating them is not the best approach.
Another issue is that the government should not be in charge of the industry. If citizens are given the opportunity to manage businesses, the private sector can contribute greatly to the country’s economic progress.
Change was sought not in the situation, but only in the governance system
We haven’t even been able to separate our priorities. The country’s multi-party political system has been in place for about 34 years. We have followed an open economy approach since 2046. Around 30 governments have been founded since then. Along with the shift in government leadership, policy changes were equally frequent, and commercial sector stability was impossible to achieve.
Everything became unstable as a result of political unrest. We remark that certain industry or business is required at a specific location. We will immediately implement a policy to address this issue. However, we will promptly amend that policy. It caused extreme insecurity. It caused the business environment to implode.
We are blaming each other. However, we cannot gain immunity only by blaming or donating. In 2007, we established democracy. Panchayati democracy was established in 2015. Then, in 2046, we established multi-party democracy. We established the republic in 2062/63. Every time we change the system, we hope that the people’s situation improves. Party and party officials arrived, promising happiness and wealth to the people.
However, the person who won the election by making such a promise is the same person who increased policy restrictions and legal complexities, causing agony to industrialists and the general public. When the servants sent by the people to administer the government took power, we lost sight of the fact that the people are the owners and began to regard ourselves as the owners. As a result, incorrect customs and attitudes are growing dominant in us. The state should be run by those in authority.
We need to shift our mindset. The people are the state. In numerous positions, the people will administer the state. Every position is filled by a Nepali citizen or member of the people. Only then do they have formal authority. Let us express what we see when it happens. Changing the system does not guarantee that things will go smoothly. We need to shift our perspective. The system is not flawed. Countries with massive economies, such as China and India, would have collapsed if the system had been flawed.
As China has a communist regime. India has a multi-party democratic system. but, Even though there are contradictions in governance between these two big countries, they have become developing and developed countries because of the open economy. No matter how much the world preached to China about democracy, they proved everyone wrong. In that case, there is nothing wrong with the arrangement. Success depends on how you react to get results.
Another thing is that we have brought the current federal democratic republican government system by saying that the autocratic Rana period, panchayat system and imperial rule of Nepal are wrong. However, even in this arrangement, we could not succeed financially. In that case, the country is not developing only by changing the system. It seems that we have to change the situation. We have brought the current federal democratic republican system of government by calling the Panchayat system and royal rule wrong. Even with this agreement, we would not be able to thrive financially.
In that case, altering the system is not enough to propel the country forward. It appears that we must alter the situation. By incorrectly referring to the Panchayat system and royal rule, we have brought about the current federal democratic republican system of governance. Even with this agreement, we would not be able to thrive financially. In that case, altering the system is not enough to propel the country forward. It appears that we must alter the situation.
Our goal is of a country with the rule of law, acceptance of each other’s presence, respect for each other, a good quality of life for all, good infrastructure such as grass, housing, cotton, education, health, drinking water, transportation, freedom of speech, and respect for freedom. Yes, any system that provides such assurance is accurate. Regardless of the name. People must now push for it.
We were in the right place before 2019
Nepal’s economic activity was thriving in the recent past, prior to the corona epidemic, until 2019. We were doing quite well. Some industries and enterprises are in turmoil during the Corona period. However, most businesses’ bottom lines were fine. The economy of the country was catching up. Everything was handled by the merchant. Everything was being regulated when the doors opened and closed. The loan’s interest rate was likewise appropriate. Except for the medical supplies, the prices of the commodities were typical.
There was no significant price rise. But then the Ukraine-Russia war broke out. Following that, the prices of products and services began to rise across the board in order to compensate for the losses sustained during the Corona period. The global market attempted to compensate for the loss of the Corona period.
Globally, the cost of goods and services will rise, as will the value of the dollar required to purchase those goods and services. We have come to place tight limits on the import of products and services without considering other choices. When imports are suddenly decreased in huge numbers in an import-oriented economy, in an economy that is driven by imports, we suffer an all-around economic blow.
Neighboring two huge economies and where we have failed
Our two adjacent countries account for roughly 40% of the world’s population. These two countries have the world’s second and fifth best economies. China’s and India’s economies have been steadily expanding for about 45 years and 30 years, respectively. They were not required to look back.
Being sandwiched between these two massive economies, our shortcoming is that we are unable to identify and capitalize on our advantages. There is a flaw in our reasoning. We must be able to move forward if China and India are to do so. What we must identify is that in our current worldly and economic state, we cannot even choose who would be our best professional friend.
It seems appropriate that we make India an outstanding commercial partner based on demographics rather than location and cultural affinities. We cannot make both countries the best professional partners. As a result, we should be able to state unequivocally that India is our best business partner. We must not make the error of considering both to be equally wonderful. Even from a democratic standpoint, India may be a good commercial partner for us.
India maintains an open border. There is a link between the 5 million Nepalis who go to India for work and the Indians who come here. Our currency has a fixed exchange rate with Indian rupee. In that situation, walking hand in hand with India for progress will be simple. We must not allow our country’s territory to be used against another. However, we have the right to select the best business partner country.
Spoile way to revive a battered economy
Our economic progress was positive until 2019. After that, any policy regulations we have modified will be acceptable if we rescind them and return them back to 2019. Everything should be implemented as it was prior to 2019. This includes halting land purchases and modifying stock market policies.
Because we were financially robust prior to 2019, we should not be thus weak after three years. That was the case back then. Let’s re-use all three of the existing policies. Let the open economy flow; don’t put too many barriers in its way. We cannot stop all imports simply as we have grown more import-oriented. Imports should be steadily discouraged as the country develops a manufacturing environment. By doing so, it will improve on its own.
No one from a third country will come to mend what we have messed up. We’ll make it happen. Let us now discuss the open economy. If half of our country’s population has left, we should not be afraid to pursue an open and liberal economy. We are still in a tough economic situation. If Nepali citizens are in difficulties in any country throughout the world, the Nepalese government can act as their protector.
The perpetrator should be punished. We’re safe from it. The policy-making organization must be structured. The economy is not created by a third party. Let us listen to one other rather than to the outside world. Let us create our own state.
Let us prioritize education and capacity building. Our economy is now many times larger than it was previously. As a result, emphasis should be placed on enhancing the capacity of national servants. It should be practical.
The only solution to resolve the current economic issues is to return to the economic policies that were in place before to the onset of the disease. That benefits us all.
