Governments Instability is Major Problem for Doing Business In Nepal : GCR,2016/17

Businesses operate according to forecasts and scenarios about the future that comprise surprises as well as certainties. However, as much as businesses factor in uncertainty, the one thing that wants to avoid at all costs is the instability in the macro environment that results from political gridlock, extremism, and political dysfunction. Businesses like to operate in an environment that is not marred by frequent strikes, social unrest, and chaos as their operations would be hit adversely due to these factors.

Review of Global Competitiveness Report 2016-2017 

The report assesses the competitiveness landscape of 138 economies, providing insight into the drivers of their productivity and prosperity. This year’s edition highlights that declining openness is threatening growth and prosperity. It also highlights that monetary stimulus measures such as quantitative easing are not enough to sustain growth and must be accompanied by competitiveness reforms. Final key finding points to the fact that updated business practices and investment in innovation are now as important as infrastructure, skills and efficient markets.

Figure I: Top 10 competitive economics of the world

Switzerland, Singapore and the United States remain the three world’s most competitive economies.The Report series remains the most comprehensive assessment of national competitiveness worldwide. Main source of article is here. Top ten competitive economics of the world are as listed in table I.The two Himalayan economies, Bhutan (97th) and Nepal (98th), both improve their positions this year, by eight places and one place, respectively. 

Figure 2: GCI score range across the 12 pillars in South Asia, 2016–2017

Nepal stands at 98th position out of 138 economics. South Asia continues its upward trend and competitiveness improves in most economies in the region, which is experiencing positive economic momentum, and in 2016 is set to grow more quickly than China for the first time in more than 20 years.Out of 12 indicators infrastructure, technological readiness, innovation and business specification Nepal is least poor in south Asia. Better in only one indicator that is macroeconomic environment in the region.

Government competitiveness index overall review are as follows:

As per report 2016/17,Major problematic factors affecting doing business in Nepal are government instability.

Political instability is harming Nepal’s struggling economy, which is expected to grow only 1.5 percent this year, and threatens to stall further relief for victims of last year’s devastating earthquake. While Nepal’s political leaders are embroiled in interminable fights, the country’s needs are going unaddressed (nytimes).

No government formed after 1990 has competed its full term of five years. The political instability has been costly for the economic development of the nation. No development project concludes in time due to political instability. Moreover, no long-term plans for the economic development could be formulated when there is political instability as there is always a trend of replacing the development plans introduced by the previous government immediately after the replacement of the government. Most of the chiefs of development projects get replaced with the change in the government. These activities only increase time and cost to complete the project (peoples review).

The political quagmire in Nepal is of its politicians’ making and India will do well to avoid getting its hands mired in that mess(deccan herald).

The frequent changes in government in Nepal have badly hampered the country’s development and

Political development in Nepal
Source : development politics blog

 economic growth. Even after the constitution’s promulgation, there is no sign of political stability in Nepal. Ordinary people are not concerned about who will come to lead the government but there is worry across the board that political instability has badly affected every sector in the country. The country has been riding a wave of political chaos since Maoist rebels launched their war in 1996 — two decades of political instability.
Despite the promulgation of the constitution, it seems that Nepal is doomed to face further political instability. Unless the major parties come together, there cannot be progress on addressing the key issues facing the country, whether rebuilding after the earthquake, implementing the constitution by holding layers of elections, or simply growing the economy(The diplomant).

This is time to raise question to politician "Up to when political chaos would continue in Nepal?