Nepal Economy undergoing through severe crisis: Senior Economists

Nepal’s senior economists have opined that the national economy is already in a severe crisis.
“The crisis is mainly due to the government’s unwanted interventionist policies adopted of late in each and every sector of the country’s economy which has contributed in the retardation of the economic growth rate and thus put the entire country into a severe economic crisis”, is how the economists observe the present economic scenario.
One of the internationally acclaimed senior economists of Nepal, Professor Dr. Madan Kumar Dahal says, “If the government fails in building an investment friendly environment, the country’s economy may soon collapse”.
Dr. Dahal was the Head of the Department of Economics at the Tribhuwan University until recently. Currently he is the Head of the Nepal Economic Association-NEA.
According to Professor Dahal, “the government which has adapted to a free market economy must and should not acquire an interventionist line but instead act as a facilitator only”.
"The private sector is the prime vehicle for economic development which is considered as universally acepted principle", continued Professor Dahal.
Opines Dr. Dahal, “ at a time when the government should have encouraged the private sector for the growth of the Nepali economy as is the practice worldwide, the government is seen to have intervened into each and every domain of the economy which bodes ill for the nation”.
“This must not happen for the healthy growth of the national economy”, continued Dahal.
“Such interventionist policies must be abandoned by the government at the earliest”, Professor Dahal adds further.
Dr. Dahal predicts that the government’s target of bagging 7% growth rate in the country’s economy is nothing but a paranoid affair.
The export has declined which means that it will have an adverse impact on the foreign currency reserve, reveals Dr. Dahal.
Since the Nepali workers living abroad are losing their jobs in quick succession which, says professor Dahal, will pose a direct threat to the regular inflow of remittance in the country.
Yet another economist, Dr. Chiranjibi Nepal emphatically said that the country’s economy was undergoing through a very difficult and challenging period.
Dr. Nepal is of the view that the government should immediately check the mushroom opening of Banks and Financial Institutions.
Dr. Nepal sees the need for the establishment of what he calls, “Credit Rating Agency” in the absence of which the lay men fear that their investment may go to the dogs any time.
The Chief Executive officer of the Nepal bank Limited, Mr. Binod Atreya opined that the financial institutions should be village centered.
“The Banks and the financial institutions must not be Kathmandu centric but instead they should concentrate their financial transactions in the villages and serve the people”, added Mr. Atreya.
“Go to the villages and serve the people living there”, opines the chief executive officer of the Nepal bank Limited.
The Chairman of the Muktinath Development Bank, Mr. Bharat Raj Dhakal said that a sort of financial anarchy could be noticed at the moment in Nepal which is due to the unchecked/unregulated mushrooming opening of the financial institutions under the cover of open economic policy.
The senior economists made their views known yesterday February 25, 2009, at an interaction program organised by Mirmirey Media Club in Kathmandu.