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 Nirvana Chaudhary, Managing Director of Nepal’s only billion-dol­lar conglomerate Chaudhary Group, talks about the group’s business plans and govern­ment’s role in promoting pri­vate sector in this conversation with Arun Poudel.

What are your current plans for investment expansion in Nepal?

At the moment, we are committed to taking forward the commitment we made at last year’s Investment Summit in Kathmandu. As we said at the summit, Chaudhary Group is working on four joint ventures: in solar power, logistics-park, mobile network service, and hydropower. We have already entered a JV agree­ment with Sharaf Group to develop a multi-model logistics park. Like­wise, there is a deal to develop 600MW solar photovoltaic proj­ect with the US-based Sky Power. Our plan is to take 200MW out of the 600MW to Province 2. We have almost completed our 18MW Middle Modi and started Super Madi 44MW project. We have been waiting for the government to respond to our approval request for the past three years. We were under the impres­sion that after witnessing the $250 million commitment from CG, the government would have acted in a fair and transparent way. But this has not happened.

What is the level of investment in these projects?

We and our partners will inject 50/50 percent funds into both the solar power and logistics park proj­ects. Sky Power will invest Rs 25 billion in the solar project. Sharaf Group will bring about Rs 6-7 billion in the logistics park.

There has been much hype about the telecom services that the CG has been planning. Could you enlighten us on this?

We want to offer telecom services at the most competi­tive rates. Right now, Nepal has extremely poor telecom services with sky-high rates. Why should people pay high charges for poor services? Our aim is to provide HD-quality voice calls and the fastest data package at the low­est price. Currently, the telecom charges in Nepal are possibly the highest in South Asia. Voice calls are way more expensive than they should be. And the charges for data are too much for ordi­nary people. We need to realize that telecom services and inter­net aren’t luxuries anymore, but rather necessities. Why have such high rates in Nepal? Data penetra­tion in the country is 60 percent and 4G penetration is not even 20 percent. This is a pure case of monopoly and it’s the people of Nepal who are suffering. This does not help in the creation of a digital economy, and the people are at the receiving end.

But the CG telecom project seems stuck. Why?

We have been trying to advance our telecom plan for the past three years, but maybe the government doesn’t want new players in this field. It has been holding our tele­com license for the past three years. We have no over-dues. We have fulfilled all the criteria, and there have been two cabinet deci­sions so far. Yet there have been many obstacles in the past three years in the implementation of those decisions.

At the Investment Summit, CG Communications announced an agreement with Istanbul-based Turkcell for 5G mobile network service in Nepal. CG is the sole investor in this project. We plan to invest Rs 25 billion, with Turkcell providing only strategic and tech­nical support.

What is your advice for up and coming entrepreneurs?

First, there is the need to iden­tify the right opportunity. Combin­ing right opportunity with right partnership can give you amazing results. Whatever the challenges, one should never give up. Focus on what you want to achieve.

Go outside Kathmandu Valley and see what the whole of Nepal needs. Try to tap the potential in the pro­vincial areas of Nepal. What can you offer to the people? Think not only in terms of making money, but also in terms of how you can come up with the best products and services. Business will come to you automati­cally if you have the right products, you develop the right channels, tar­get the right audience, and commu­nicate properly.

Learn from successful business­people from around the world, and replicate their success in our context whenever possible. But most impor­tantly, find your passion, use your creative capacity and imagination to build the future you want.

What should be the government’s role in promoting industries?

The existing concerns of investors need to be addressed first before the country can attract FDI. Nepal needs big investments. The govern­ment should implement commit­ments made at the Investment Sum­mit. Investors need a supportive environment to come forward. Big investors would like to see that their money won’t go to waste. Nepal Investment Board and concerned government agencies need to be serious and play the roles of facil­itators, not inhibitors, for inves­tors. The government needs to see that the projects proposed at the Summit under its own auspices are implemented.

How do you see the future of doing business in Nepal?

There is organic growth in all sec­tors of the economy. It is all due to market dynamics. So I see great prospects here. We only need an environment conducive to investing money and doing business. We need to see stable government policies that don’t change overnight. The private sector is always in need of a government that works as an honest and impartial guardian. 

Pushpa Raj Acharya of APEX talked to Bhawani Rana, President of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI). Excerpts:

 How would you evaluate the country’s investment climate?

The country has a stable government after a long time. We experienced the decade-long conflict and another 10 years of political stalemate before the constitution’s prom­ulgation. This is an opportune time for the private sector to grow rapidly as the govern­ment has emphasized economic develop­ment with its vision of ‘Prosperous Nepal, Happy Nepali’. Private sector is considered the engine of economic growth as it contrib­utes to 70 percent of total investment in the economy. But the government does not see the private sector as a trusted partner.

Trust deficit between the government and private sector is hindering investment and private sector growth. The private sector had a huge expectation that the govern­ment will join hands to translate its vision of rapid socio-economic development. We had expected economic policy reforms and accelerated infrastructure development to attract fresh investment. But the government focus seems to be more on regulating instead of facilitating the private sector. The busi­ness sector is also terrorized by the arrest of prominent businessmen in cases where the civil code is attracted. On the other hand, enforcement of multiple regulations simulta­neously contributed to a lack of confidence in private players.

A private-sector organization like the FNCCI can approach the highest political level. And you have had several rounds of meetings with it over various regulations. How do you see this engagement?

Earlier, we were facing problems like labor unrest and frequent power cuts. These issues have now been resolved. But the higher lend­ing rates of the Banks and Financial Insti­tutions (BFIs) are yet to be resolved. In the meantime, the government has enforced multiple rules and regulations on the business sector, like the mandatory Permanent Account Number (PAN) bill in transactions above Rs 1,000, vehicle consignment tracking system, abrupt changes in tax policies, enforcement of social security scheme, among others. These compliances add to the cost of operat­ing business. The government does not even consider it necessary to consult the private sector before formulating different bills. The government has been feeding antibiotics to the private sector to make everything perfect, however, the antibiotics are resulting in side effects. The prescribed pills have not been able to treat the ills they are targeting. Based on the size or classification of business, there are multiple categories of business from micro enterprise, small medium enterprises (SMEs), to largescale enterprises. But the government has kept all of them in a single basket.

What should the government do to encour­age the private sector?

The private sector suffered a lot during the conflict and the political transition, and the government should carefully diagnose this suffering. Rather than slapping new taxes and increasing tax rates, the tax net should be expanded to generate more revenue. We are in favor of pleasant taxation. The gov­ernment should collect tax and enrich its treasury slowly by soft and pleasant taxation just like a cub slowly grows on cow milk. The government must accelerate infrastruc­ture development. Development works are slow-moving, which cannot trigger private sector investment. Against this backdrop, private sector investment is key to attracting foreign investment. Unless the government can get domestic investment, it cannot create ground for foreign investment. The domestic private sector investment can play the role of a catalyst. The government is lacking SMEs pol­icy, even though they are the economy’s spine. Even our southern neighbor, India, has a sep­arate ministry, i.e. Ministry of Micro, Small & Medium Enterprises, to facilitate micro, small and medium enterprises. They are crucial in sustaining grassroots growth and are effective in inclusive economic development and pov­erty-alleviation. The government can replicate such policies and best practices to make the investment climate more favorable.

You also mentioned economic reforms. Could you elaborate what sort of reforms you seek?

Nepal saw major economic policy reforms in 1990s, and private investment was opened up in many sectors through economic liberaliza­tion. That expanded the country’s economy, and government tax collection increased sub­stantially. We need similar reform to expand the economic pie now. Almost every economic sector is stagnating, and in need of fresh investment. Investment comes with economic policy reforms. The government together with the private sector should think out of the box to trigger and sustain growth to achieve our targets like being a middle-income country by 2030 and achieving Sustainable Development Goals (SDGs). The government should come up with economic policies that lure invest­ment. We have to reform every sector from agriculture, manufacturing, to services. Low yield in agriculture hinders private invest­ment, and our youths do not want to enter agriculture.

How do we initiate reforms in these sec­tors?

The government can reform agriculture through contract farming policies, irrigation facility, improved seeds and fertilizers along with other extension services, and easier access to credit. Similarly, tourism can be another major sector of competitive and com­parative advantage. Many tourism potentials are still unexplored in the absence of better tourism infrastructure, and such is also the case with manufacturing and services. We can see how private investment triggered hydro­power development after the government announced purchase of electricity generated by independent power producers (IPPs) in take-or-pay contract with the Nepal Electric­ity Authority. This shows the private sector is ready to invest if the government protects it and ensures return of investment. The govern­ment should resolve the economy’s structural constraints in coordination and collaboration with the private sector

Q. Which living person do you most admire the most, and why?
A. I don’t have one person that I admire the most. Different kinds of people that offer varying aspects, traits and personality, are always inspiring me.

Q. Nikon, Canon or something else?
A. Always ‘The Canon Guy.’

Q. What is your favorite cuisine
A. Nepali Thali with some mouthwatering sukuti.

Q. What is the most difficult part of your job?
A. Things that seem to be the worst are the best at the same time, like being independent and self-sufficient or knowing that everyone is a photographer today or at least takes pictures, which makes a difference.

Q. What is the biggest project you’ve been a part of?
A. My biggest projects have been Bryan Adams, Mohit Chauhan and Farhan Akhtar concerts.

Q. If you could wish for one and the only thing, what would it be?
A. Live and work freely without any stress.

Q. What is the strangest thing you’ve ever eaten?
A. Asked for bacon burger but unknowingly ate my friend’s Gordon Ramsay beef
burger

Q. One gadget that’s been in your wish-list?
A. Evo II Pro Drone or Airblock

Q. If you could live anywhere in the world, where would it be?
A. Vienna, Austria or Santorin, Greece

First, an old query. Is the Millennium Challenge Corporation (MCC) part of the Indo-Pacific Strategy (IPS)?

The IPS report was unveiled last June when the Shangri-La Dialogue was underway in Singapore. Unveiled by the US Department of Defense, it included many military components. The document speaks for itself. The same November, the US unveiled its foreign policy which stipulated that the IPS would be a part of the US foreign policy.  

Now, there are debates on whether the MCC is a part of the IPS. When we initiated the process for the MCC, Baburam Bhattarai was the prime minister and Barsha Man Pun the finance minister. They formally requested the US government to make Nepal part of the MCC. On the basis of the request, the American government began to assess if the MCC could be implemented in Nepal. They accessed things like Nepal’s human rights situation, and freedom of speech and expression. In the end, Nepal qualified for the grant.

At the same time, Nepal is in a sensitive place. In terms of both economic and military power, the US and China are competing with each other. We have seen the disputes of South China Sea and Middle East where two countries are competing, and the IPS orientation also demonstrates that competition. China has invested massively in infrastructures of neighboring countries through the BRI.  Therefore, whether we want it or not, whether the Americans accept it or not, the MCC has tried to address the larger geopolitics of this region. That said, the BRI’s objective is to support infrastructure development, and the objective of the MCC is also to help Nepal’s infrastructure development. Therefore, whether it is a part of the IPS should not make huge difference.

Would you say it was an intellectual dishonesty on the part of the US to retrospectively lump the MCC under the IPS?

By denying it is a part of the IPS, the US is becoming too defensive on the MCC. There was no need for that. They are saying that the IPS is their approach in this region. Similarly, the American state minister during his Nepal visit has clearly said that the MCC is a part of the IPS. They have mentioned the IPS as a foreign policy goal of the US government. So there is lack of consistency. They are becoming defensive just to placate public opinion on the MCC in Nepal. They should have clearly said that it is our foreign policy component and the MCC is focused on infrastructure development. From the start, the BRI narrative has been that it is a support for infrastructure development, which has been established as well. The MCC narrative could have been developed in a similar way. 

How do you evaluate the divisions in the ruling party over the MCC grant? Are these divisions based on ideology or have they more to do with intra-party dynamics?

There are two sides to it. Let’s look at our recent political history. Nepali Congress formed majority government in 1990 under Girija Prasad Koirala. For some months, the government ran smoothly but after that a dissatisfied group within the party, under the leadership of Ganesh Man Singh, started protesting against it. The size of the power pie is small and there are limited opportunities for leaders and cadres. More than that, right now, there is a constitutional cap on the number of ministers. In the past, there was a trend of appointing government critics as ministers. PM Oli’s dispensation does not allow for that. Our politics is filled with opportunism over money, power and prestige. Some people outside are always clamoring for their day in the sun.

Next, there could be ideological reasons. NCP leader Bhim Rawal has come up with some points, for instance he has objected to the provision of parliamentary endorsement of the MCC. Like former speaker Krishna Bahadur Mahara, a large group of former Maoists are against it. Among former UML leaders, Rawal has been very vocal. So the current divisions over the MCC are partly a clamor for opportunity, and are partly based on ideology.

Is it the case that PM Oli and Foreign Minister Pradeep Gyawali, as government representatives, feel a kind of pressure from the Americans to endorse the MCC compact?

Successive governments after 2012 have signed to pass the MCC proposal and they all have accepted its conditions.  So if you think responsibly, you cannot backtrack from it. It is also directly related to a superpower. Therefore, we should have had a long and intense discussion before signing it. Yet this discussion is taking place after it has already been signed.  I am saying that this should be seen as one-time exception and be endorsed by the parliament. In the future, if we renew the MCC, there should be renegotiations on some points.

Do you see Chinese pressure behind the opposition to the MCC in Nepal?

I do not think the Chinese have lobbied with the Nepal Communist Party. There is a lot of space to do politics on the MCC. Some are trying to project themselves as nationalists. There is competition inside the party to be seen as nationalists and create space for themselves in politics. But I do not believe that the Chinese have come in a systematic way on this issue.

Coming back to the parliamentary endorsement of the MCC, do you support it?

The most unjustifiable condition of MCC is the parliamentary endorsement. Our constitution clearly lays out two legislative functions of parliament: endorsing bills to make them laws and endorsing treaties and conventions. Either you have to present the MCC accord as bilateral treaty, like the Mahakali Treaty, but it is not a treaty. Now, it is in the form of a bill. There is vast difference between treaties/conventions and bills. In conventions, state party or the government is responsible, but in case of bills, they are applicable to all citizens of Nepal once endorsed.

A safe way for the government is to present it as a treaty and endorse it with two-third votes. There are technical problems and there are big political implications as well. That is why parliamentary endorsement is not right. If we had not signed up for the MCC accord, I would have objected to its parliamentary endorsement. As we have already signed it, we can perhaps renegotiate. But I am not sure the US would be ready to drop parliamentary endorsement.

Would it be right to say that accepting the MCC is tantamount to accepting the IPS? There is also a kind of conspiracy thinking in some quarters that if we endorse the MCC accord, it will allow the Americans to station its army in Nepal.

I am saying that the IPS is a military strategy but the MCC is not. The IPS is part of the US foreign policy, so is the MCC. However, we have already entered the broader US foreign policy umbrella. As far as US military presence is concerned, we need a separate agreement for that. There is no military or security component in the MCC.

What do you make of the rumor that part of the reason Krishna Bahadur Mahara was removed from the speaker’s post was his resistance to the MCC accord?

I am not convinced Mahara stopped the MCC proposal. As finance minister, Mahara was involved in the MCC process. What I say is that there was bargaining inside the ruling party on the MCC issue. There was bargaining on who gets what with the passage of the MCC. Some are using it as a tool to boost their nationalistic credentials and strengthen their political position. On the other hand, they could also jeopardize the country’s relations with the US. Agni Sapkota has publicly said he is against the MCC. If he becomes the new speaker, it will be interesting to see how he behaves. If he passes the MCC bill, we should understand that his opposition was part of his bargaining tactic.

Let’s move to transitional justice. How do you see the appointment of new office-bearers in the two transitional justice bodies?

In April last year, the tenure of previous office bearers ended. The government then formed a committee led by former chief justice Om Prakash Mishra to recommend new names.  In this period, conflict victims and national and international stakeholders continued to argue that previous laws were insufficient, and they should be amended. They said appointments should be made only after the amendment in order to make the process more trustworthy. They were also saying conflict victims should be consulted and have a say in the overall process. Taking conflict victims into confidence was the right idea. But the committee took 11 months to make its recommendations. By the time it made the recommendations, even the tenure of the committee had expired.  

What would you say has been the major failing of our transitional justice process?

A major problem of our transitional justice process is absence of trust. The government takes human rights defenders and civil society members as spoilers of the process. In the eyes of conflict victims, both the civil society and the government work for their own interests. Therefore, until these three forces come together and an environment of trust is built, this process cannot move ahead in a consensual way, which is mandatory to reach to a logical conclusion. So the government should have worked on confidence building measures with all stakeholders. After that the role of commissions should have been defined and the role of conflict victims in the overall process identified. Similarly, there should have been work to segregate judicial and non-judicial components of transitional justice.

Government and opposition parties agreed to form the two commissions amid a climate of mistrust. They just concluded consultations in all provinces. For the same purpose, they had prepared a questionnaire. When victims entered the hall, they were given those questionnaires, which were to be filled within three hours, as if it was a university exam. There were loaded legal and constitutional terms in there. People from rural areas did not understand those terms.  The language of healing that the state was supposed to speak was missing. It is also a national healing process. We have a huge trust deficit and the current working style cannot bridge that gap. 

But haven’t the major parties vowed to amend the laws in line with the recommendation of the Supreme Court and international practices?

To amend the law, you need to build certain confidence. The problem is that the government is yet to recognize conflict victims as stakeholders in this process. For example, a family breadwinner is still declared as disappeared. All properties are under his name. He had taken out a loan on the basis of those properties. The bank has been publishing notices with the photo of the disappeared person, asking him to pay the money back. His wife wants to pay the loan by selling the property but the cabinet has not taken any decision to transfer the property in her name. So she is helpless.

As per existing laws, if a person goes missing for 12 years, family members can declare him or her dead and you can transfer property to the rightful heir.  But allowing this will be tantamount to allowing the issue of disappearance to be diverted. The government wants to reach that point. The government wants the duration of disappearance to cross 12 years so that the family would register the death certificate and claim the property. It will dilute the issue of disappearance. That is why there is still no law to criminalize enforced disappearance. There is still no law to criminalize torture because torture of conflict era cannot be proven as all evidences have gone. This is not a healing language. These are delaying tactics.

Don’t you think the two transitional justice commissions, now that they have office-bearers, will be able to resolve the remaining tasks of transitional justice?

The transitional justice process has three main components: judicial, political, and administrative. The judicial component can be addressed through commissions. The political and administrative components should be addressed by the government of the day. Truth seeking is a judicial component. For example, there are around 40,000 conflict-era cases in my calculation. Each and every one of them should be classified. You have to establish truth in every case. Some cases could be settled through reconciliation, which is a major part of the peace process. Serious human rights violations should be categorized as such and cases filed through the special court. There would be reparation in remaining cases.

Political component entails reconciliation. You can bring local government and provincial government on board in this process.  Additionally, we have a Supreme Court verdict that you can go for reconciliation only after the consent and informed participation of conflict victims. Next, the government has to take decision to transfer the property of disappeared people to their rightful owners, which helps keep the issue of disappearance alive. The government declared the security personnel killed in insurgency martyrs but not others who died back then. Reparation is another political and administrative part of the peace process. There are several issues which need to be addressed by the political leadership as the commissions on their own cannot resolve them.

So you don’t see much hope of timely justice for conflict victims.

Yes, I can say that. I wish for the success of those who got appointed to the two commissions. But do the people appointed to the commissions have any knowledge about transitional justice? Have they worked with conflict victims? Not even one of them, I am afraid. 

Agni Sapkota has been implicated in a war-time murder. Can he become the next speaker?

His murder case is pending at the Supreme Court. Kavre district court has issued an arrest warrant against him. If it is an ethical issue, he cannot be elected the speaker. The main qualification for speakership is having high moral ground.