Economy of Nepal

Present economic situation of the country and things to do better it: (In a nutshell)

40 Billion GDP  and a growth of 4 % is the present condition of our economy. Decades of armed conflict and unstable government has jeopardized the economy of Nepal. Economy of Nepal is highly dependent on foreign donation, remittance from the abroad working Nepalese.

Import is much higher than the export and the trade deficit is more than $750 million. More than 80% of the people are engaged in non-commercial agriculture and animal husbandry. The unemployment rate is 45%. Annually, more than 700,000 youths go abroad seeking the jobs. The greatest export of Nepal has been human resources in the middle-east. Load-shedding touches up to 16 hrs. per day. (It is predicted that the loadshedding goes up to 20 hrs. a day this year)

Nepal has a great tourism potential. It has a wide range of Himalayas, beautiful sceneries, good culture, historical monuments, flora and faunas, religious places, adventure spots and many more. Amongst these, mountaineering and adventure tourism has the highest potential in Nepal. Lonely planet has classified Nepal as world's 6^th most cheapest  destination.

Another possibility of Nepal is on Hydro-power. Hydropower has a low per unit cost as compared to other alternatives. Study says Nepal has the attainable capacity of 42,000 MW while the economy requires 2,000 MW for internal consumption. Nepal can generate huge revenue by selling the electricity production to neighbor nations.

Despite these key potentials, transitional politics is deteriorating the economy day by day. Nepal is not being able to formulate proper policies and plans. The five year plan is not being able to incorporate all the requirements.

The economy is in a worse condition. So, the following things are suggested to make it better:

ñ  Government should create an investment climate to attract big MNC's to operate in Nepal. For this, investment protection agreement can be done.

ñ  The political parties, trade unions should start protesting in a creative way. The old shut-the-office, block-the-roads should be changed.

ñ  Venture Capital laws should be brought by the gvt. And it should encourage youths not to go abroad.

ñ  Entrepreneurship should be promoted at the national level. Without local job creation 46% of unemployment can not be solved easily.

ñ  BFI's should invest as a micro finance in order to make the services reach to the poor farmers changing their way to commercial farming.

ñ  Business houses should start providing unique products and services. They should not invest in the competitive line with Chinese and Indian products.

ñ  Governments key focus should be on developing roadways/railways, investment in quality education should be increased.

  

ñ  The key area of investment should be on tourism and hydro-power. Promotion of tourism should be done internationally. Strategies should be made in order to attract mass of the tourist visiting China and India to  come Nepal.