--By Roshee Lamichhane Bhusal
Nepal’s Needs Beyond Roadblocks
Five months on from the killer quakes, Nepali business is raring to go despite the challenges. As a management student, one finds that a deeper understanding of the interconnectedness and interdependencies of the various segments of the economy is a sine qua non for anyone looking at Nepal’s economy and its needs today.
Inefficient Post-Quake Aid Management
With the motto of resurrecting and building back their badly battered economy into a better shape, Nepalis from all walks of life came together post April 25. The help from the non-resident Nepalis was tremendous. Had the government utilized the grants-in-aid that it received both in cash and kind from nations and people everywhere efficiently, restoration and rehabilitation issues would have been handled more easily and at a much quicker pace. Hence, sadly most of the donors have largely backed out from committing the amount of money they initially wanted to give.
The unprecedented recent destruction is all about decline, death, debility, and debris. GDP per capita has decreased by 23 USD after the earthquake while more than 9,000 people are dead, thousands injured, and half a million houses destroyed. The total amount needed for reconstruction and rehabilitation is estimated at USD 6.7 billion (i.e., 33% of GDP), according to a World Bank report.
Combating Foreign Aid Dependency
Nepal has not been able to unleash its full potential yet and problems such as “rent seeking behaviour” still largely persist as shared by economist Sujeev Shakya (also detailed in his book, Unleashing Nepal). The country’s dependency on foreign aid continues as ever. Corruption, inequality, and injustice abound as anywhere else in the world. Nepal and the Nepali economy can hope to thrive only when burning issues like these are resolved and entrepreneurship is widely encouraged.
In fact, the Nepali government should devise, in the near future, a modus operandi of how it will be able to pay back the aid that it received immediately after the quake.
Primacy of Resettlement
The government, to a large extent, has been able to provide immediate relief to the earthquake victims. But it hasn’t been able to handle the cases of resettlement well. Victims of the hilly areas cannot be just brought to the Terai. The technicalities and other social aspects of such resettlements need to be duly taken into account.
Impact on Tourism
The other sector badly affected by the earthquake is tourism. Having made a short visit to Pokhara and Bandipur a few weeks after the quake, I personally have seen the impact of the cancellation of hotel bookings. As shared by tourism entrepreneur Yogendra Shakya, alternate trekking routes need to be devised for areas deemed unfit to travel. Those areas marked safe should be marketed well.
Another area that has been largely and directly affected is the construction sector. Development has faced a set back at the moment. The development budget will be utilized to reconstruct and rebuild damaged buildings.
Hence, former FNCCI president Kush Kumar Joshi rightly notes that the need for labourers in the coming two years is going to be massive. He says that reconstruction work requires roughly six million workers for two years (assuming if six people work to build a house). Apart from just reconstruction, the Kathmandu-Terai tunnel road project and other development projects have been in the pipeline for a long time. These require people and we need to identify ways to bring our migrant workers back to our country. Nepali migrant labourers need to be called back and the state should devise ways and means for providing high paying jobs to prevent Reverse Remittance (World Bank data puts it at USD 700 million).
Unfortunately, much of the skilled labour force of Nepal stays abroad for the kind of benefits they get and the country has faced an acute labour shortage post-earthquake. High paying jobs that are closer to home and FDIs need to be encouraged so that migrant labourers can find a good reason to come back. Labour management is a big task. The state has to give a thought as to what will pull these laborers back to Nepal. For example, the government recently introduced the policy of granting free visas and free air tickets to labourers in Middle East countries.
The Planning Challenge
Govind Raj Pokhrel, vice-chairman of the National Planning Commission, states that recovery needs a multi-dimensional approach. The recovery budget of Nepal is stated at USD 6.7 billion. Nepal has been pledged quite a reasonable amount of money by donors but the challenge is not how to get money but what to do with it.
It is not as though Nepal has no money. What it needs is an immediate and drastic enhancement to its implementation capacity. What is most unfathomable and paradoxical here is while a private sector unit like DHL could handle all relief work so well, the government in power failed so miserably. It is time we ponder over the importance of allowing private sector participation in some important segments of the economy. In the case of Nepal, government intervention has not always been positive to make it just and equitable — be it in the case of Janakpur Cigarette Factory or the Nepal Airlines.
Inactive and reactive strategies are passé and may not provide the answer. In periods of turbulence, Nepal should gear itself up through a ‘dynamic engagement’. It should get adequately prepared for facing earthquake-like disasters in future and come up with ways to effectively mitigate their ill effects on one and all.
Start Up & Stand Up
Entrepreneurs need to be given the required latitude even inside organisations. ‘Startup Culture’ needs to be encouraged and good success stories of the West need to be emulated. Nepal and the Nepali people have shown amazing tolerance in disasters. The focus of the country now should be to instill entrepreneurial flair. Entrepreneurship is not just about creating and developing businesses but about character. Sohan Khatri, a consultant and educationist, shares that the risk taking propensity has increased post disaster. So we need to capitalize on the bottom of the pyramid. People who have been victims of disaster need to own up to things. Rebuilding cannot happen at the policy level alone. The affected people are to be made a part of the process.
Challenges of the Unfinished Constitution
Former UN assistant secretary general Kul Chandra Gautam shares that the Nepali people tend to unnecessarily complicate things and make matters worse by searching for extraordinary solutions for mundane problems. We do not learn from our own success stories. In the process, revisiting and re-crafting our constitution got jinxed, leaving behind the highly contentious issues for want of adequate and suitable representation. This is resulting in our constitution functioning in a sub-optimal state while significant amounts of time and money have already gone down the drain.
Alternate Value System
The Nepali value system, which is still largely conservative, is not conducive for the Nepali economy to open up liberally in the required direction and quantum. We have capitalism but woefully it is crony capitalism to say the least. It is disheartening to note that Nepali business men are not able to figure out how to tap the large population of its gigantic neighbours—India and China.
Education should not be archaic, largely chalk and talk. Education should be about skill transfer. Vocational education is the need of the hour. The education budget has gone to 12 percent post-quake which is the lowest in a decade. The state should devise ways to increase enrollment at the primary level. Once that increases, a large chunk of the population will be able to move towards an educated future.
At higher education level, knowledge, skills and attitude, popularly known as the KSA model, have to be emphasised. Education should provide gainful employment. This is where the role of management education becomes instrumental. Management practitioners need to understand that this is the time when they can utilise their knowledge and skills to help rebuild Nepal.
Management Education as a Catalyst
To make it happen, the role of management education becomes imperative and critical, while management graduates will be called upon to play a monumental role to revive the present economy from its debilitating state. The MBA graduates can no longer afford to remain generalists but become specialists in particular spheres of activity and certain specific aspects while working in different sectors of the economy of their choosing. This also calls for business schools to run specialist MBA programmes like MBA in disaster management and not a regular run of the mill vanilla type MBA programme offered usually.
The author is a lecturer at Kathmandu University School of Management (KUSOM). She can be reached at firstname.lastname@example.org or email@example.com