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Federalism should be put on hold: FNCCI President Murarka

Pashupati Murarka is the president of Federation of Nepalese Chambers of Commerce and Industry. Murarka, who was elected unanimously to the post, believes that a country like Nepal will not be able to economically sustain a federal model of governance. He said that the issue of federalism will open a Pandora’s Box, so it would be wise to put it on hold for now. Online Khabar caught up with Murarka to talk about the current crisis in Nepal.

So, what state are the industries in Nepal at the moment?

Most industries south of the East-West highway have been shut due to the 108-109 days’ (even I have lost count) protest. Due to the fuel crisis in recent days, those industries that had been running despite the strikes have not been able to do so. They have also been unable to import raw materials needed for production.

How much damage has the current crisis done to the economy?

Normally, we would say that due to a single day of bandh, the economy loses around Rs 2 billion. But that was for a 2-4 day-long bandh. This bandh has been going on for months. Normally, bandhs would not affect the agriculture sector, but this time, the agriculture sector has been badly affected. We don’t have exact data, but we can see that sugarcane farmers have been unable to transport their harvest, similar is the problem with paddy farmers. The transportation sector has lost a lot of money and the tourism sector has also been affected badly. In addition to that, all development works, including under-construction hydro projects, will now be delayed. This bandh was on even during Dashain, which is the time consumers spend most of their money. Due to the bandh, spending has been below normal, and this will have a telling effect on the economy.

What would be the long-term effects?

Under-construction projects have been delayed, and tourists have received negative message about Nepal. Tourists, who plan to come to Nepal, will think there will always be a bandh in Nepal.

But the most serious issue is that the state’s presence has not been seen. Isn’t it a fundamental right of the businesspeople to do business? But the state has remained quiet. How are we supposed to invest?

Federalism does not make economic sense for a country like Nepal. The main reason we chose federalism was to take power to the grassroots. That can be easily done through decentralisation. We have always said that when provinces come into existence, there will be different non-tariff barriers to trade. The end result is that the cost of doing business will go up

FNCCI used to organise different events to raise the issue of bandhs and strikes. This time around, it has been silent.

Is that so? No we have not been silent. Each and every Nepali is being affected by what is going on in the country. But my opinion is that we should not promote the culture of bringing everything onto the streets. If we also take to the streets, what would be the difference between us and the agitators? We have been raising our voice wherever necessary. We have held several rounds of talks with both the Madheshis and the government. We have been incurring losses to the tune of billions, and we have been communicating that to all sides.

What do you think could be a solution to the current crisis?

We have always been against bandhs and strikes. We believe that the crisis can be resolved through talks. At the moment, there is a deadlock because none of the parties are serious about talks. There should be a roundtable involving all sides. There are two options for the government, one is to accept the demands of the agitating parties, two is to use force, if it thinks the demands cannot be met. The government cannot remain silent and let this situation continue for an indefinite period.

What is your perspective on what is going on?

This is a political thing, it is about the provincial boundaries. It has been four months since this issue cropped up. There has been a deadlock. So, why no keep the issue of federalism on hold? I say that federalism does not make economic sense for a country like Nepal. The main reason we chose federalism was to take power to the grassroots. That can be easily done through decentralisation. If the protests go on, there will be other protests and we will have a long series of protests. That is why we should keep it on hold at least for now.

The private sector is clear on this. We have always said that when provinces come into existence, there will be different non-tariff barriers to trade. The end result is that the cost of doing business will go up. We have received calls from our members from around the country to put federalism on hold. I am saying this more from an economic perspective rather than political one.

Now the protest is about provinces, tomorrow it will be about nomenclature and the next day about provincial capital. When is this going to end? The ultimate aim of every country is to achieve prosperity, and that can be achieved only when people can work. When the country is prosperous our identities will be secure.

What role is FNCCI playing to resolve the crisis?

We are in constant touch with both sides. The situation now is extremely polarised. It has become very easy for people to tag someone as ‘anti-national’ or ‘pro-national’. Ours is a democratic country, everyone should have the right to speak. We are businesspeople, we think in terms of business. We should not link everything with ‘nationalism’.

What is your take on our dependence on India?

We share an open border with India, it is easy for us to get things from India. We know their language, our buying behaviour are similar and there are very few barriers to trade. I think that we should take steps towards self-sufficiency for our own shake, we should not do it just to show it to India. We should move towards that direction, regardless of the state of our relations with India.

In the present context, hydroelectricity is central to our self-dependence. It is also the cheapest form of energy for us. Solar is expensive and it lacks the efficiency.

How does Nepal’s future look?

There is a huge potential in Nepal. We are located between two giant countries, that’s a great opportunity for us. It is up to us to take this as our strength or our weakness. We should have good relations with both the countries. The day the newspapers in Nepal start talking about business, we will know we are headed in the right direction. I am someone who left Nepal a few years ago thinking nothing can be done here. But I came back for good looking at the potential Nepal has.

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