Challenges to Entrepreneurship in Nepal

The oxford dictionary states entrepreneur as “A person who sets a business or businesses taking financial risk in hope of profit.” Entrepreneurs are rare breed. They venture in areas where other people feel reluctant. A successful entrepreneur is loaded or filled with creative and innovative ideas, fresh spirits, unique vision of the future, leadership quality and finally strong determination to take a risk. The activity of an entrepreneur converting his visions to action is called entrepreneurship. In the present context of Nepalese society along with tremendous possibilities in the sectors like tourism, hydroelectricity, handicrafts and other aspects. A bulk of challenges needs to be addressed.

A popular proverb states “Half a loaf is better than to bread.” True to the words, in spite of youth in Nepal having such entrepreneurial skill and willingness to work for their country, the large scale of political instability and lack of clear vision of the government has resulted in brain drain from the country, and also regular shift from one business to another. The examples of Bal Krishna Joshi, the famous goat seller of Nepal, extremely support the statement. After being forced by government’s intervention, he had to repeatedly shift from one profession to another.  

Entrepreneurship in Nepal is largely affected by the problems like lockout, strike, price hike, liquidity crunch, corruption, lack of good business policies, insecurities, shortage of skilled manpower, lack of advanced technology, high bureaucracy, which are the major challenges for entrepreneurs in Nepal. One of the basic problem seen is the unwillingness of both the government and nongovernmental economic practitioners to invest in the Nepalese market. Thanks largely due to lack of any concrete plans and activities from the side of government. Even the already established big industrial houses and corporations are getting it difficult to sustain. From the recent data published by Morang chamber of commerce, In the Koshi Zone, Industries are producing only 40% of its production capacity. Let’s view the glimpse of some industries over here. Before Some years, it had been found 100 running plastic factories but now only 11 are remain. Similarly there were 5 running factories of zinc oxide but now we cannot found any one of it. Like this above facts reflects the overall industrial condition of Nepal which has declining trend.

Yes, it is fact that every entrepreneur take risks, but those risks are calculated, which entrepreneur are ready to tackle but no one wills to bear such uncalculated and uncertain risks. The 12 years long internal/domestic violence seen in Nepal has hampered the growth and development of infrastructure to a large scale. Nearly 30% of infrastructures has either been destroyed or damaged. Likewise import tax is much higher in Nepal than export tax which inter deepens the problem. As a result only a partial or lopsided development is noticed, leaving out large-scale undevelopment. The present educational pattern of Nepal to deepens the problem, university graduates lack competence. In the sense that the colleges and universities in Nepal focus on theoretical aspects rather than vocational concept. Thus, youths in Nepal lack idea of entrepreneurship, enterprises, freedom and free market economy, As a result Nepal education is blooming garden for foreign Multinational Corporation rather than national development. Along with it government's delay is all the fronts like announcing of annual budget concern in the economic infrastructure and development and absence of proper motivation and reward discards the growth of the ideas of entrepreneurship. A big question that generally comes to the mind of common Nepalese people is “How long can a country sustain only by collecting foreign remittance? How can a country sustain by depending totally on foreign donation and aids? How can the country be prosperous without enaction of constitution for such a long period of time? How long entrepreneurs bear such challenges?

Much left to be done in order to march forward the direction of economic progress and development. It is always wise to begin then being rather too late. Formulation of new policies, proper monitoring and evaluation by the government authorities, along with the community people and civil society with transparency in the part of government need to be practiced. Laws and order should be proper implemented in order to check the problem of insecurity. Public awareness should be created about good governance. The concept of decentralization should be well implemented by government. The concept o, ‘think globally act locally should be prioritized and new economic dimension should be open in order to attract foreign investors. All these are to be supplemented by proper diplomatic relation with neighbor countries. Also the unwanted hurdles and concentration of financial institution in city areas has created the inaccessibility of people in loan. New policies for distribution of loan and other aids should made by the government, so the local entrepreneur with lack of capital get access to preserve the concept of entrepreneurship.  Along with it the government of Nepal lacks proper long-term economic policies. As a result the expenses of government in the administrative sector are much higher than that of economic sector. The taxation policy of the government need to be revised in order to promote the growth and development of economic activities more over focus to established special economic zone, dry sea port, and separated industrial area for proper management.

Weakness among the youth is also instrumental in this aspect. Today youths in Nepal are directed too much towards political issues than other aspects like economic development. They lack the ideas of stock market and investment sectors. Predisposition of thoughts rather than materializing is a common phenomenon in Nepal. Self-reliance and self-esteem is really low in the sector of economic investment. The concept of political economy and sustainable development should be brought forward. Youth should be agent of change not mere, ‘object’ of change by actively participating in entrepreneur activities. 

This Essay was written in November 2010. It won the second position in National Essay Competition organized in Nepal by Samriddhi Foundation on the occasion of Global Entrepreneurship Week.