This essay, written by Ms. Adity Karki, a fourth year student at Kathmandu School of Law, won second-prize in nation-wide essay competition “Aspirations for Free Enterprise” announced by Gari Khana Deu! in association with Bichar Dabali.
This essay “Entrepreneurship and Economic Development; Opting the Sustainable Way Out” deals with the current socio-economic paradigms and problems of Nepal. Nepal is one of the least developed countries of the world. It has adopted a mixed economy system and is predominantly an agricultural country. In light of these diverse elements of the Nepalese economy, this essay aims to discover a few major aspects where the state has shown tremendous negligence because of which the economic crisis and unemployment has increased in the country. Meanwhile, the essay also suggests few ideas on “ways” that can lead towards a more sustainable path. The essay broadly deals with two aspects: the micro and the macro; the current pressing problem of the capital is discussed in the former aspect whereas the larger spectrum of national economy is dealt with later in the essay.
“But, the price is too high!”
“P.K ji, if you are willing to pay then we can talk about managing transportation. Otherwise, there are many who are waiting in line”
P.K sir then angrily switched off his phone and entered the classroom with a book. He turned the pages to chapter seven.
“An Entrepreneur is the one who creates a new business in the face of risk and uncertainty for the purpose of achieving profit and growth by identifying significant opportunities and assembling the necessary resources to capitalize on them.” (Zimmer and Scarborough, 2005)
“Creation of new business opportunities through entrepreneurship, productivity and innovation leads to economic growth of the country. ”
P.K sir is a Management teacher in Biratnagar. He had come to Biratnagar a few years ago from Kagun, Solukhumbu for his higher studies. Having struggled all these years, P.K sir had managed to save a little and now he was willing to invest it in woolen costumes made by his relatives in Kagun. But, he was being continuously harassed by the syndicate system regulated by the local transportation providers in that region.
Meanwhile, in the capital city, Raju dai just packed his bag full of mobile chargers, which he was selling on the sky-bridge at Bagbazaar, and is running fast away from the police. Along with Raju dai, many other vendors in Ratnapark area have again encountered the chadke check by the municipality.
In the above story, only the names of the characters are fictional. There are many P.K sirs and Raju dais whose stories of struggles are untold but yet they are the unseen forces of economic drive in the country.
In light of this serious fact, two significant spectrums of the economy are specified below and discussed in the following essay:
(a) Licensing micro-entrepreneurs
(b) Seeking Sustainable Development
Before striking into the core concern of the essay, it is equally necessary to peek into the broader picture of the current Nepalese social and economic condition because of which Nepalese people are, time and again, hurled into economic turbulences in their lives. Presently, Nepal is passing through a turbulent political and economic phase. Whatever changes are underway are likely to be substantive in nature because never in Nepalese history have people of Nepal been engaged so intensely in the processes of transformation . Transformative ideas and transistorizes are being conceived and there is an unprecedented urgency to bring in a real democracy which not only accommodates the assertion of common masses but also satisfies their basic human needs.
Why can’t we focus on human resource development policies that provides opportunities for all to develop their potentials and creative abilities to the fullest? ?
Among many concerns, this is one of the genuine concerns that caused millions of people to take to the streets. Delivering them efficiently will make the efforts of the revolution and transition fruitful for all. Yet, the onus for making them practical and meaningful lies within the political forces of the country and their role in stabilizing the economic situation of the country. Nevertheless, in order to achieve this theoretical paradigm of economic stability, the responsible authorities need to realize, review and work with the practical economic concerns of the people.
Recently, there are the two aspects in Nepalese economic scenario that are being tremendously neglected and because of which Nepalese people are continually being discouraged to contribute and participate in the economic development of the country.
i) Licensing micro-entrepreneurs
Managing the problem of Raju dai, and many other street vendors is a current immediate need which is surprisingly ignored by authorities. In the ever increasing crowd of the capital where unemployment is still a huge problem, street vending has become more of a compulsion than a matter of choice for these people. Besides, street vending has benefited the middle class citizens of the country well enough. Especially the lower-middle class and poorer sections of the capital are being able to afford goods of basic needs in affordable yet lower prices. The contribution of this “Gari Khane” populace is gravely neglected. Overtaking the city’s scenario should not be the dominant and defining reason to simply ignore their contribution.
Poor people choose street vending as a means of employment because of the inability of the government and domestic market to provide employment rather than out of their choice. Considering this, street vending should be managed rather than being labeled as illegal, thereby taking away the employment of thousands of poor people.
In fact, street vendors are the small entrepreneurs whose role and capability should not be ignored but instead enhanced and polished in order to develop them into significant economic contributors. Recently, Surakarta (also called Solo or Sala) City in Central Java Province in Indonesia has garnered widespread appreciation for its efficient management of street vendors. With an empowerment and restructuring program, Surakarta managed to solve the issue of illegal street vendors through humane methods .
The Solo administration provided four major lines of action for the street vendors. First, it ensured better communication amongst stakeholders. Second, it created appropriate space for street vendors through relocation, provision of umbrella-tents, traditional style carts and modified shelters. The new place was chosen over several meetings held with the government, NGOs and the street vendors’ representatives. Third, it granted legal status to street vendors’ business. Fourth, it provided training for street vendors on managing and expanding their business.
These are remarkable steps that can be learned by Nepalese authorities to manage street vendors countrywide. This will not only help preserve the beauty of cities by eliminating the unnecessary crowd but also help to gain tax revenues from the systematically organized street vending. However, in order to turn this idea into a beautiful reality, following pre-requisites should be necessarily arranged by the government authority:
• National level policy on street vending and licensing mechanism
• Effective policy on re-locating, monitoring and implementation
• Assisting them in learning and acquiring entrepreneurship qualities by organizing exhibitions, seminars and vendor development programs
The world is now going through a shift in thinking, in which development planning and concerns and urbanization are increasingly re-evaluated in terms of their potential to advance progressive human development standards. Street vendors and their beneficiaries cannot remain too far from these human development concerns . Development planning is not only about drafting and implementing policies and decisions, but also the multiplicity of ways in which change and transformation can be economically activated. Street vending is an unseen yet important element contributing in economic-drive of the country therefore there is an urgent need to change its face from an illegal to an entrepreneurial activity. Doing so will probably be the first step in improving the situation of unemployment in the country.
ii) Seeking Sustainable Development
Nepal ranks at the bottom 10 percent of the countries in the world in terms of annual earnings. The per capita income of Nepal was as low as $426.48 in 2014 (Nepal GDP per capita, Trading Economics, 2014). About 55 percent of the people fall below the international poverty measure of $1.25 per day. There is a huge capital flight from the country. Liquidity crunch among the banking and financial institutions has shattered the investment climate both in the short and long-term perspective. The annual rate of the economic growth in the country is as low as 3.5 percent . Virtually, Nepal is virtually a land of poverty in South Asia.
These facts make it clear about the necessity of economic growth in the country. However, looking at it from the human development perspective, economic growth is not an end in itself but the means to lead humans into progress. Thus, more attention must be given to the structure and quality of growth to ensure that it is directed towards supporting human development, reducing poverty, protecting environment and ensuring sustainability.
This means that, managing the crowd of the capital should not be the singular focus. Equal attention should be given in promoting equal development of all regions and use of resources by people of all regions. It is necessary to create safeguard to protect the domestic industries by enacting competitive law and trade remedy laws and creating necessary institutions to implement these laws in order to further the economic interest of the nation. In short, the culture of entrepreneurship and ways to secure, encourage and promote them should be fostered countrywide.
However, no enterprise or industry can function in the long term without a sustainable approach and policy of the government. Usually following are the major challenges that our government needs to address in order to achieve the sustainability goal:
• Restoring balance between natural resources and population
• Ensuring entrepreneurs safety
• Increasing livelihood opportunities and their safeguard
• Fostering agricultural development
• Drafting urban management plans in order to prohibit future complications in other probable cities in the country
• Launching programs keeping public welfare first and then party agenda later to achieve wide trust of majority of people
• Eliminating politicized-thugs, the syndicate system and other hurdles from the market
Besides these, killings of entrepreneurs and businessmen and threats against the business community coupled with load-shedding and credit difficulties are other hindrances for the development of entrepreneurship culture in the country .
Thus, it is only within the last ten years that the concept of entrepreneurship has progressively gained some acceptance in the Nepalese economy. With the growing recognition that unique talents could be harnessed for development and for creating employment opportunities for others who are not suited to an entrepreneurial career, developing entrepreneurship should become an important part of national development planning and strategies. This will set path for the sustainable-development approach in the Nepalese economy.
A truth of supreme importance which all should bear in mind at the present moment of under-development, transition, and instability is that majority of the people in the country don’t care about national plans, strategies, debates between socialism and capitalism, philosophy of entrepreneurship or any other sophisticated issues. This majority represents the Gari Khana Deu people who seek employment in the country and in case of the absence of employment in the country, they are ready to take the risk of being deployed in Arabian coffins. It is a compulsion-driven choice for them so it would be unfair to blame this majority for above-mentioned problems caused. Instead, it is the duty of the government stakeholders, planners, policy makers, business persons, academicians, civil society leaders and the elite groups to try their best to achieve the goal of sustainable economic growth in the country so that the majority does not have to suffer for inefficiency of the minority.
To define the problem of Nepalese economy as lack of industrial growth or dependency of subsistence agriculture has become an inadequate explanation. With rising rates of brain-drain, economy based on remittance, adverse climate change impacting on our agriculture system, we have now entered a new period of its development in which crises will be more severe than before, and unless the State intervenes radically, chronic mass unemployment of millions will be normal, while prosperity for the economic system as a whole will be the exception. So, it’s high time we start realizing the necessity for a new and advanced economic plan to deal with both broader headings as mentioned previously. And, as P.K sir rightly mentioned in the class, what can be a better first step to development than enhancing entrepreneurship culture in the country?
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