Private Sector’s Role
Nepal’s constitution has defined Nepali state as socialism-oriented but it has sought proactive role of both private and public sectors to realise its lofty yet ambitious goal of economic transformation. One may wonder how the private sector can be a partner of government to usher in the socialist reconstruction. Based on the past experiences of economic development in different nations, Nepal adopted pragmatic policy recognising three pillars of economy-- public, private and cooperative. A hardliner socialist economic system suffered from lack of innovation owing to the absence of incentive and creative freedom. Nepal has allowed private sector to make investment in the areas where the state finds it difficult to funnel its resources. The private sector can be catalytic actor in forming capital that is essential for executing big projects. The notion of cooperative economy is unique in Nepali context as it promotes small capital deposited by the autonomous groups of people without any undue pressure from market or state. In the combination of three separate economic elements, Nepal aspires to ensure a better economic future and prosperity.
Prime Minister KP Sharma Oli the other day underscored this fact and noted that the government would take the private sector into confidence to achieve all-round prosperity as the nation has successfully concluded long-drawn transition and forged home-grown peace agreement to end decade-long conflict. Addressing a function organised by the Nepal Chamber of Commerce, the PM said that the private sector was the major stakeholder of economy. He was of the view that Nepali entrepreneurs living at home and abroad would contribute to achieving the mega-dream of Nepali – inclusive prosperity. Oli also offered an innovative idea that the communist and corporate house should develop closer ties and collaborate for common goal. This is interesting proposition. Oli stated that the left government has the resolve and vision, and the private sector should be a viable instrument to mobilise the masses to this end. In order to encourage the private investors, necessary laws should be enacted and investment-friendly climate created. While it is necessary to boost the morale of the private sector, the latter should also prove its mettle. The private sector should contribute to building a real economy and be able to develop business and pro-nationalist character. Its capacity to deliver, however, is often questioned. It is also blamed for serving or acting as ‘comprador class’ and not helping grow economy that creates jobs and attract foreign investment.
Even though the country’s economy is not in good shape, there are positive indicators showing its steady growth. The government is holding second investment summit this year. This will be another milestone to bring in foreign investors. The economic growth is expected to be 5.9 per cent in the current fiscal year. Per capita income of Nepali has increased to USD 1,400. The ratio of poverty is also declining. The country is in dire need of rapid economic growth to meet the aspirations of Nepalis, who waited for decades in the hope of better life, peace and order. It is imperative for all stakeholders to make contribution from their respective sides to attain inclusive growth so as to translate the idea of socialism into practice.