Give security top priority : Kush Kumar Joshi

Kush Kumar Joshi, 49, is president of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), the apex business body of Nepal. A diploma holder in electrical engineering from the UK, he is also managing director of Nepal Ekarat Engineering Company -- the country's first joint venture company -- and director of Nepal Wood Preservatives Industries and Shara Global Trade Pvt Ltd. A trained manager and skillful businessman, he is also a genuine leader who has taken charge of the FNCCI promising reforms and giving new impetus to the private sector. Prem Khanal of The Kathmandu Post caught up with Joshi to talk about the FNCCI's latest undertakings and his views on the ways the economic agenda should be treated as Nepal goes through a political transition. Excerpts:

What major activities has the FNCCI undertaken recently?

Following the major changes on the political front, the whole focus of the country has now shifted to the economic agenda. So our push at this juncture has been to put the economy on a priority footing during the constitution making process itself. We have urged the government to end the confusion in the current policies and come up with a common minimum economic program with clear insight on how the state should drive the economy in the medium- and long-term. Industrial and physical insecurity has hindered the private sector. We have called upon the government to end that immediately. Unfair practices like syndicates and cartels, and disruptions like labor stirs and highway bandas should be ended forever. We are presently giving inputs for the formulation of the new budget. For a longer term, we are also formulating the private sector's 20-year economic vision and development plan.

What's in the FNCCI's 20-year vision document?

Broadly speaking, we have discussed all the prerequisites of doing business in the vision document. We have mentioned the areas where we have a competitive edge and special potential. It also makes specific recommendations for fine-tuning the state's economy policy. While identifying the areas in which the private sector will readily work, we have also suggested the actions the government should take. It lays down areas where the government can make things better by just enforcing the existing laws. It also lists the areas where the government will have to amend the laws and policies besides formulating new ones. The vision document is still in the discussion phase. We will hand it over to the government at an appropriate time.

What major problems is the private sector facing now? What are your suggestions to the government to address them?

Insecurity and closure of highways is the foremost problem that we feel the government must address. Just stepping up security and creating an industrial security force will help attain that. We urge the government to incorporate these measures in the new budget. The government must also express a strong commitment to reform labor laws -- another pressing issue of the present time. The budget must also reaffirm the government's commitment to end unfair practices like syndicates and cartels. This problem can be solved by merely enforcing the existing laws.

We also want the government to enforce multiple VAT rates. There must be an improvement in the tax system as well. All forms of taxes including scrap tax that raise the cost of production must be done away with. The country's export sector is in tatters. We want the government to waive export duties and also establish special economic zones to support the export sector. Also, the government must address the long-running energy crisis. Without energy, we cannot expect the economy to function normally, forget faster growth.

What should be done to reverse the downturn in the export sector?

We cannot promote exports without developing export promotion zones (EPZ). We must first develop export oriented units (EOUs). Only those industries that export at least 70 percent of their production can be termed EOUs. We must shift the EOUs into the EPZ and provide them duty and tax exemptions. The government should form flexible labor laws for the EPZ, and its tax policy should also be different than for other industries. This cannot be done overnight, but we must start working in this direction now if we are to revive our exports.

How confident are you about the new government's policy being private sector-friendly?

It must be. There is no other way. The government's policy and new constitution should reaffirm the right to property. It must support private sector growth and facilitate corporate sector development. When speaking about economic transformation, the political parties, including the CPN-Maoist, have repeatedly mentioned liberal economic policies and have set targets much higher than what we ourselves have aimed at. They have pinned their hopes on hydropower, trade, export, industrialization of agriculture and tourism for establishing a new Nepal. So, based on what they have been saying so far, I am optimistic the new government's economic package will be private sector-friendly.
Source: eKantipur