E-Kantipur

KATHMANDU, AUG 29 -

As someone who handled the Finance Ministry with aplomb, the country’s private sector has high hopes from new Prime Minister Baburam Bhattarai. It is his credentials as finance minister in the Maoist-led government that has given this confidence to the private sector.

Bhattarai is heading the government at a challenging time when not only the politics but also the economy is in turbulent water. Economic growth is just above three percent and inflation is again threatening to touch double digits. The private sector believes that as someone who is fully aware of challenges currently facing the economy, Bhattarai will not totally keep him away from economic affairs and work for the much needed stability in the economy.

Restoring the flagging private sector’s confidence, maintaining industrial peace, controlling inflation and improving governance should be Bhattarai and his government’s immediate priorities, says the private sector. Hence, the private sector is keenly watching what kind of measures the new prime minister will take when it comes to the economy.

Even though the Maoists will retain the Finance Ministry, it is not clear whether Bhattarai will take the finance portfolio this time around. In that scenario, the private sector hopes that Bhattarai will have someone who is competent and clean as the new finance minister. According to them, bringing an honest leadership at the Finance Ministry will send a positive message.

Suraj Vaidya, president of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), says the new government should appoint seasoned politicians—who have good understanding of the economy—at the ministries like finance, tourism, industry and labour. “As someone who has experience of handling the Finance Ministry, we hope that the new prime minister will bring some changes to the economy,” said Vaidya. However, given the political situation and coalition he represents, some of these wishes may not be fulfiled.

Bhattarai’s tenure at the Finance Ministry was lauded for his efforts to increase revenue collection and the discipline he brought in the country’s revenue administration. But will he be able to maintain same kind of discipline in his government, especially in those ministries that are prone to corruption? Given the toughly negotiated coalition he represents, this looks tough.

The private sector’s major concern is industrial security and deteriorating employer-labour relation—both at their lowest ebb. With his own party’s trade union split into three groups, restoring industrial peace will be a herculean task for Bhattarai. As the private sector still reluctant to accept the government-endorsed hike in workers’ salary, the new prime minister has to use his good office to resolve this issue. Energy crisis, militant trade unionism has taken a toll on the country’s manufacturing sector whose contribution to the national GDP has now declined to nine percent.

For the private sector, Bhattarai is someone who has a vision for the country’s economic development. He was one of the politicians who played a vital role in endorsing the investment board bill from the parliament. “The present situation demands for someone who has a clear economic vision and I believe Bhattarai has that vision,” said Binod Chaudhary, president of the Confederation of Nepalese Industry (CNI). “But given the circumstances under which he has been elected and the coalition he represents, there are fears that he may indulge in compromise politics as earlier prime ministers.”

However, his immediate task as a prime minister will be endorsing the budget from the Legislature Parliament. “If the budget goes into implementation level, it will do a lot of good,” says former Finance Secretary Rameshwor Khanal. Khanal is of the view that the new government and the new leadership at the Finance Ministry should not change the budget brought by the earlier government.

With the UCPN (Maoist) more or less accepting the free market economy, the private sector says they are not as apprehensive as earlier with a

Maoist-led government in place. “Our (the private sector) relation with the Maoists is on the same level as with other political parties,” said Rajendra Khetan, chairman of Khetan Group. “If the new government comes up with good initiatives, the confidence level will certainly go up.”

For now, the private sector wants to give some space to the new prime minister. Vaidya says FNCCI is ready to work with the new prime minister.

Posted on: 2011-08-29 09:27

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