Chandra Prasad Dhakal is the chairman of IME Group, one of Nepal’s leading business houses. Dhakal, who is also a Senior Vice President of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), is credited with the growth of the remittance sector as well as the merger of banks and financial institutions in Nepal.
the HRM recently sat down with Dhakal to talk about post-pandemic business revival, the challenges, and doing business environment, among various other issues. Excerpts:
You were sworn in as the Senior Vice President of FNCCI at a time when Nepal was going through its deepest economic recession in history due to the Covid-19 pandemic. How has the past one year been for you at the FNCCI?
Yes, it has been a year since I assumed office as Vice President of the FNCCI. Despite the difficult situation, the new leadership has worked to support private sector industries that were hit hard by the Covid-19 pandemic and to prepare a ten-year vision document. I became the Senior Vice President of FNCCI in November last year, nearly nine months after the scheduled FNCCI annual general meeting. The AGM was postponed due to the Covid-19 pandemic. The pandemic dealt a heavy blow to the business sector globally. Our economy, too, witnessed a negative growth for the first time in 30 years. The situation has not improved yet. A new variant of Covid-19 has emerged again, and a few countries have already adopted stringent measures to contain the spread. And, there seems no sign of any permanent solution to the pandemic in the very near future. Instead, we have learned to live with Covid-19.
What challenges in particular did you and the new executive committee face in leading the apex body of the Nepali private sector during the past year?
The pandemic has affected not only the health system, but the entire economic sector. Many industries and businesses were shut amid the lockdown enforced to curb the virus spread. Micro, Small and Medium enterprises were the hardest hit businesses. Many of them were on the verge of a collapse but the government and the FNCCI rescued them on time. We, as the apex body of the Nepalese private sector, had a huge responsibility of providing relief packages for these businesses and recovering the country’s economy as a whole.
What major achievements would you highlight for FNCCI during this period?
Actually, dealing with Covid-19’s impact remained the central task of the new executive body. First, as a leading private sector business organization, we were together with the government in the fight against Covid-19. Second, we had to lobby with the government for relief packages, subsidies, and tax waivers for the Covid-hit businesses. We have also prepared a national vision document of the private sector, National Economic Transformation (NET) 2030, so as to partner with the government in the country’s economic recovery.
There has been intense lobbying from the FNCCI to get government support to struggling businesses. How seriously have the government and the central bank listened to and acted upon the grievances of the private sector? How has the government responded to FNCCI’s suggestions for economic recovery?
The budget has included most of the recommendations provided by the FNCCI. The government has allocated sufficient amounts of budget for the purchase and distribution of Covid-19 vaccines and to control the spread of the virus and for treatment of patients infected with the coronavirus. In the budget, the government has prioritized economic recovery. As suggested by the private sector, the government has attached priority to saving lives during the pandemic while focusing on the recovery of the economy hit by the pandemic, promoting social security and utilizing public and private resources to boost production. Continuation of the rehabilitation fund established last year to provide relief to small and medium-sized enterprises and the tourism sector was also suggested by the FNCCI. This included tax exemptions for affected enterprises. In addition, the budget focusses on job creation through the development of skills among the youth.
What challenges do you see as Nepal’s private sector moves forward? Is the momentum of economic recovery satisfactory? What other measures are needed to speed up the process?
The pandemic has created hurdles in the path of economic development and prosperity. Economic activities have been battered by the recurring waves of Covid-19. However, the global economy seems to have started recovering. Though the pace of recovery is still expected to be slower in the countries like Nepal, which rely on tourism and lack access to vaccines, it is on the right track. The recovery of the hard-hit sectors including transport and tourism is expected to take longer time as the pandemic prolongs. To speed up economic recovery by minimizing the impact of the pandemic, it is necessary to provide regulatory easing and concessions. Last but not the least, the government should take the private sector in confidence to create a conducive business environment. Attracting more and more private sector investment in the country would help boost economic recovery and growth as well.
How have things been for the IME Group? As one of the country’s major business conglomerates with interests in different business verticals, how were the last 21 months for the IME Group in terms of business and people management?
The pandemic hit every sector hard and IME was no exception. However, with lessons from the pandemic, we have now focused our investment on digital platforms. IME Pay, Midas Technologies and Swift Technologies, among others, have made remarkable investments. Not only this, we have continued our investment in tourism infrastructure. IME Group plans to develop tourism destinations with cable cars and resorts in all seven provinces.
In your opinion, what big changes have taken place in doing business in Nepal since the start of the pandemic? What factors do investors emphasize more today while investing than a couple of years ago?
Of course, the pandemic is bad. However, it has also opened new doors of opportunities in a few sectors such as health and information technology. Health sector did both business and service during the pandemic. The lockdown forced many businesses to open digital platforms for providing service and doing business. From production to marketing, meetings to classes, shopping to payments, everything went digital during the pandemic. This has certainly changed the scenario of traditional business. So, I think, investment in digital system, information technology and health could be an emerging platform for investment now.
How has the growth of digital economy impacted traditional economy? How has this shift been in Nepal?
As I said, despite many setbacks, Covid-19 pandemic has done one good thing. That is the rapid development of digital system. During the lockdown, everything went digital in the world and in Nepal too. We had online meetings, seminars, classes, shopping, and even banking/payment was done online during this time. This could have taken a few more years to happen if Covid-19 had not been there. Overall, I see the digital sector as a potential medium for the world’s newest and fastest growing economy.