It is uncommon to see Nepali economic activity taking center stage and being highlighted as a headliner in the leading newspapers. This time, the high-level commission formed in October 2024 by the Government of Nepal became the talk of the town. The committee chaired by Rameshwar Khanal-Former Finance Secretary and respected economic thinker, intended to recommend the requirements for economic transformations of Nepal. Recently, I had a chance to chat with him about the reforms required for the economic transformation of Nepal. When the news of a report by this committee being presented to the finance minister broke out, I was excited to read about it. The 447-page Nepali document required a significant investment of time to review, but my initial impression was positive, which encouraged me to share my first thoughts in this column.
As I was going through the report, the list of signatories immediately caught my attention. I could not help but notice that three individuals from the private sector had been added to the original team of five. This change is quite significant because it means that the private sector now has a bigger role in pushing for reforms in a public setting. In my past writings, I’ve raised concerns about how private sector interests can sometimes create roadblocks to reform, especially because they often provide financial backing to politicians and political parties. I truly believe that if we introduce measures for greater transparency in how political parties and elections are funded, we can turn private sector discussions into valuable opportunities for learning and sharing knowledge. Instead of being just temporary platforms that change direction with each election cycle, they can evolve into lasting, impactful conversations.
Similarly, it is worth considering that the document is entirely documented in Nepali indicating the originality and not being structured by a parachute consultant, who does not step out of a hotel room or take a visit out of Kathmandu. While there are flaws in incorporating global perspectives, this approach effectively highlights local challenges. For example, a parachute consultant may be unaware of the need to affix a stamp on a government document, as it’s an issue they would likely never encounter.
Furthermore, the document presents some bold recommendations by scrapping acts and regulations impending proper functioning of private sector and tackling critical issues like funding of political parties and investing outside Nepal. These are remarkable considering their unconventional inputs to age-long practices barring the broader economic development. These proposals are noteworthy for their potential to drive significant change.
The document also outlines broad recommendations on bureaucratic compositions at government entities. This includes the key highlight in the section raising conflict of interest. A classic example of this is a businessperson placed on the government regulatory board like the Security Board remains to be a conflict of interest. Furthermore, there is a need to question the confidentiality of members from the private sector in Investment Board Nepal, with circulations of feasibility reports and proposals submitted to IBN.
Fifth, the report accepts the economic transformation that Nepal has made in the past two decades be it credit from the banks or growth of the stock exchange. It also questions why the economic activities did not increase commensurate to the flow of credit very clearly indicating the investment in land. If you talk to bank CEOs in private, they will admit the problem with the bulk of Non-Performing Loans (NPL) belonging to business groups close to political power. We at beed Management have done confidential reports that substantiate this perspective. The fact that businesspeople supported a loan defaulter promising political reforms by changing the political system speaks volumes about the state of businesspeople in Nepal. No wonder we get into gray listing at regular intervals.
Sixth, it will be all about implementation. Nepali politicians are not good at implementing reforms that impact their pockets. However, there could not be a better timing for the current ruling coalition. It is worth considering someone like Rameshwor Khanal, who leads this committee, to be entrusted with its implementation. He got much cooperation from many people during this study phase because of his credibility. The politicians at the helm of affairs cannot ignore the discontent of people against corruption, nepotism, and crony capitalism. This is an opportunity for the older generation of seasoned politicians to stay relevant in the next elections by taking credit for implementing reforms.
To effectively implement the report, the role of development partners and friends of Nepal is equally crucial. Nepal has the highest per-capita reports. We don’t need additional individuals flying in to write more reports or recreate a model without fully understanding the context. Provide knowledge and expertise where required. It is not the money here. Implementing the recommendation relies more on human capital than financial resources. It requires the willingness to allow Nepal to define its own path, with Nepali leaders having the confidence to guide the country towards a brighter future.
Sujeev is the founder CEO of beed. He leverages over 25 years of experience in diverse fields and geographies to advise, lead and inspire. With comprehensive networks in Nepal’s public, private, civil and diplomatic sectors, Sujeev is a trusted business and policy advisor and respected strategic thinker. From economies of developing countries to economies of human beings, he moves across different worlds, with his passion for the Himalayas being the axis.
