Start of Revival
Finally, the end of the tunnel is in sight. The Nepali economy has stepped on the revival path.
Imports have started to increase, showing early signals of the revival. As the regular column about the arrival of goods at the Kolkata port, presented in our sister publication, the Nepali language weekly ‘Aajako Abhiyan’ shows, the increase in imports is not limited to consumer goods. A substantial increase is noticed in the import of raw materials and intermediate goods too. Also, the trend of registering new industrial units is on the rise, according to the Ministry of Industry.
Undoubtedly, this is a massive vote of confidence expressed by the country's business community in the on-going political changes. More importantly, this revival of confidence started well before November 8 when the government and the Maoists signed the formal peace accord. The business community had clearly noticed the opportunities by observing the behaviour of the general people during the month-long holiday season.
The challenge now is to keep this positive confidence growing. But this is not a big challenge. Positivism is always endemic. The increased imports mean increased revenue to the government. In fact, the state revenue started increasing right after the restoration of democracy. As a result, the rate of increase in state revenue during the mid-July to mid-October was 28 per cent higher compared to the same period last year. Though this rate later decelerated due to the holiday period, it is still 20 percent - i.e. higher than the 19 per cent increase targeted by the government budget. It can be expected to go up in the coming months because of the new positivism.
Added to this is the increased commitment from the different donors to provide assistance to Nepal - to help in the peace process, for reconstruction of the damaged infrastructure and to construct new infrastructure. Gone are the days of the fiscal crunch that was so severe last year.
More important is the news that a commodities exchange has started futures trading. Though it is at present open only for gold and silver, other metals and agricultural produce are planned to be included in the near future. This will not only commercialise agriculture, it will further boost economic activities and lead to modernisation in all sectors.
Perhaps these were the indicators that prompted young entrepreneurs of the country to be so confident about the future. This is indicated by their Annapurna Declaration after the recently held youth conference in Pokhara. And they received impressive support from various prominent intellectuals, senior bureaucrats as well as donor agencies and the financial institutions. This should be treated as a massive vote of confidence on the country's youth. This in turn is the vote of confidence of the young entrepreneurs on the new political dispensation.
