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Sarita Sapkota

About Sarita Sapkota

Ms. Sapkota is the Coordinator of Communication and Development at Samriddhi Foundation and was previously engaged with the Foundation as a Research Associate for more than three years. She is a graduate of political science and also contributes articles for Samriddhi's column at The Himalayan Times' Perspectives supplement.

Expressing Ideas for a Free Society

Expressing Ideas for a Free Society

Learn and Earn

A chance to win prizes worth a total of NRs. 60,000 by learning about 5 of the greatest freedom champions whose ideas have expanded individual and economic freedom for us like no other.

All you have to do is:
Select ONE of the following five topics:

  • Adam Smith and the Invisible Hand
  • Hayek and Spontaneous Order
  • Basitat and ‘What Is Seen and What Is Not Seen’
  • Ayn Rand and Capitalism
  • Milton Friedman and School Choice

Creatively express your understanding in that topic. Creative expression categories: Performing Arts (Music, drama, poetry), Power Point Presentation, Elocution, and, Audio/Videos (short movies)

First Prize: NRs. 30,000

Second Prize: NRs. 20,000

Third Prize: Nrs. 10,000

Also all winners get a chance to attend the Asia Liberty Forum taking place in Kathmandu, Jan 08-09, 2015, Soaltee Crowne Plaza.

 Entry Deadline: Dec 31, 2014

Expressing ideas final brochure I

Judging

Expressions will be judged on creativity and content. Judges will look for expressions that are clear, articulate and logically organized. Winning expressions must demonstrate good grasp of the themes and topics.

Associated Seminars

Ten short seminars (two hours every day except Sat-Sun) will be held between Dec 01-12, at Samriddhi Foundation’s premises on the topics of the competition to help the students prepare for competition.

The seminars are free and open to all students. However, seats will be limited and students are required to register their names beforehand by calling. 

  • Dec 01 & 08 : Adam Smith and the Invisible Hand
  • Dec 02 & 09: Hayek and Spontaneous Order
  • Dec 03 & 10: Milton Friedman and School Choice
  • Dec 04 & 11: Ayn Rand and Capitalism
  • Dec 05 & 12: Basitat and ‘What Is Seen and What Is Not Seen

Resources for the Competition available HERE.

Rules

  • For participation, applicants must be currently enrolled in undergraduate or post graduate program in any faculty.
  • Applicants are required to be between 18-26 years of age in order to participate.
  • Students can work alone or in a group not exceeding 5 members.
  • All submissions must be made in a recorded form. Quality of the video is not a part of the judging criteria and will be used for shortlisting purposes only.
  • Recorded submissions could be made online by sending an email to info@samriddhi.org or at our office by December 30, 2014, no later than 5.00 PM, NST.
  • Registration is required for participation. Registration fee of NRs. 150 is applicable. Registration has to be done at Samriddhi Foundation’s Office at Minbhawan, Kharibot, Kathmandu.
  • Submissions have to made along with a copy of  student ids (scanned or printed) and contact details.
  • Samriddhi Foundation has the right to provide contest deadline extensions when deemed appropriate.
  • Submissions must be in Nepali or English language and should solely the work of the entrant(s). Plagiarism will result in disqualification.
  • Decisions of the judges are final.
  • All entries become the property of Samriddhi Foundation.
  • Contest winners agree to allow the Samriddhi Foundation to post their names on any of Samriddhi ’s affiliated websites with full credit given to the creator(s).
  • Winners will be solely responsible for any taxes that might apply.

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Samriddhi, The Prosperity Foundation
P O Box: 8973 NPC 678
416, Bhimsengola Marg
Minbhawan Kharibot,
Kathmandu, Nepal.
Tel:  +977 1 4464616
Fax: +977 1 4485319

Email:info@samriddhi.org
URL:    www.samriddhi.org
www.facebook.com/SamriddhiTPF
www.twitter.com/SamriddhiTPF

 

Sarita Sapkota

About Sarita Sapkota

Ms. Sapkota is the Coordinator of Communication and Development at Samriddhi Foundation and was previously engaged with the Foundation as a Research Associate for more than three years. She is a graduate of political science and also contributes articles for Samriddhi's column at The Himalayan Times' Perspectives supplement.

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Micro and Small enterprises in Nepal could do lot better in a more economically free environment

Press Release

Kathmandu, Oct 20, 2014: Micro and Small enterprises in Nepal could do lot better in a more economically free environment, shows the findings of a study conducted by Samriddhi Foundation on Kirana Pasals (small retail stores selling groceries and fast moving consumer goods whose services are used by a vast majority of Nepali people) in Kathmandu Valley. Samriddhi Foundation shared a first of its kind report on how Economic Freedom translates into the day to day lives of micro and small entrepreneurs in Nepal, taking the example of Kirana Pasals. The study (which was conducted from April – September 2013) focused on identifying some key hurdles in the growth of these independent businesses run by entrepreneurial and hardworking people.

Part of the research, two hundred and sixty eight Kirana Pasal  owners were interviewed to capture valuable information, insight and stories on the impediments they face to grow their enterprises. The report reveals that regulatory environment pertaining to registration, taxation and standardisation are immediate areas of concern. The report also highlights the fact that laws and regulations that are applicable to KiranaPasal s are scattered across several acts, regulations and rules; and are enforced through several government agencies, which makes it difficult for these entities to be operating in a fully legal manner.

The report shows that taxes are also something which further suppresses the growth of Kirana Pasals, especially those that are registered. Thus the report highlights the need to reform the tax code by reducing tax rates and simplifying it to widen the tax bracket. This would help Kirana Pasals operate legally and consequently access finances and other resources to grow.

The report also recommends rethinking the current standards applicable to Kirana Pasals and fixing practical and acceptable standards in consultation with the Kirana Store owners and consumer groups. Access to finance was another issue of concern for Kirana Pasals wanting to grow. According to the report, capital available from micro finance institutions (which most Kirana Pasals use) are limited and often more expensive than loans from commercial banks and other financial institutions. Since most owners/manager of Kirana Pasals have limited capital and little formal education in business, documents like business plans, balance sheets, rental contract, letter of approval from municipality, tax documents, asset valuation, etc.  are hard to produce.

Finally, barriers to exit were also considered as barriers to growth as when entrepreneurs fail, they have to have an opportunity to wipe the slate clean and start again. This is almost not an option for retailers such as Kirana Pasal  owners in Nepal as exiting formally is extremely difficult. The report makes recommendations to address the aforementioned impediments to the growth of Kirana Pasals and the recommendations together help increase Economic Freedom in Nepal.

Download the full report here
Download the summary of the report here
Sarita Sapkota

About Sarita Sapkota

Ms. Sapkota is the Coordinator of Communication and Development at Samriddhi Foundation and was previously engaged with the Foundation as a Research Associate for more than three years. She is a graduate of political science and also contributes articles for Samriddhi's column at The Himalayan Times' Perspectives supplement.

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Policy Options for Public Enterprises Reform in Nepal: A look at two public enterprises

Samriddhi Foundation has released a new policy analysis paper on Nepal’s Public Enterprises. The policy analysis paper titled “Policy Options for Public Enterprises Reform in Nepal: A look at two public enterprises” is prepared under the banner of NEGA 2014, which is preceded by NEGA 2012 and NEGA 2013. The Nepal Economic Growth Agenda (NEGA), first released in 2012, is an annual effort of Samriddhi Foundation to identify key constraints to Nepal’s economic growth and policy options for reform. NEGA 2012 identified and discussed policy constraints in five growth sectors of Nepal viz. Agriculture, Education, Hydropower, Transport Infrastructure and Tourism. NEGA 2013 focused on six cross-cutting issues viz. Industrial Relations, Contract Enforcement, Anti-Competitive Practices, and Foreign Direct Investment, Public Enterprises, and Regulatory environment for doing business. NEGA 2014 builds on The Foundation’s previous studies on hydropower, industrial relations and public enterprises. Of the three study reports produced under NEGA 2014, this study on public enterprises proposes policy options for reform of public enterprises through two case studies of Nepal Airlines Corporation (NAC) and Hetauda Cement Industry Limited (HICL). This policy analysis paper has been prepared in consultation with individuals and groups who are experts in the area or are involved in the mentioned organizations.

This policy analysis paper takes a look at two of the thirty six existing public enterprises in Nepal to propose concrete policy options for reform. Both NAC and HICL have been facing high cumulative losses and presence of unfunded liabilities due to operational inefficiencies and other problems. This paper analyses the poor performance of public enterprises from a policy perspective with an aim of identifying practical reform options and these reform options are mainly focused on improving the organizational efficiency either by bringing changes in the current working modality or by introducing a new modality based on a cost benefit analysis. The larger objective of conducting such analysis on two loss making PEs is to pave way for similar analysis of other public enterprises which are increasingly becoming a burden on taxpayers and consumers.

The paper can be downloaded here.

Sarita Sapkota

About Sarita Sapkota

Ms. Sapkota is the Coordinator of Communication and Development at Samriddhi Foundation and was previously engaged with the Foundation as a Research Associate for more than three years. She is a graduate of political science and also contributes articles for Samriddhi's column at The Himalayan Times' Perspectives supplement.

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For the love of legislation

Most often when folks from the media (or elsewhere) see a situation where the outcomes are not ideal, the most convenient conclusion or suggestion offered is the need for legislation. Few days ago I read a feature on a very popular magazine about living-in relationships in Nepal and why there is a need for a legislation to address the situation. The feature had case studies of women who were ‘lulled’ into a living-in relationship by being promised a marriage down the line and were physically abused while in the relationship. So the article argued that to address this injustice, a new legislation on living-in relationship was required. There is no doubt that the physical abuse of a human being is completely unacceptable but does it really require a separate law if a woman in a living-in relationship is abused? How is it different than a single, married, divorced or a woman of any civil status being abused? If these women are not being able to get justice in the present system, how will women in ‘living-in’ relationships get justice through the introduction a new law merely?

Fact is, we have grown to be a legislation loving society and sadly, it is doing us more harm than good. We are beginning to think that legislating something is a ready-made fix to most problems without paying much heed to who is benefiting at whose cost. Here are few examples:

Problem: Too many private schools in Kathmandu
Solution: Nepal government legislated that new schools cannot be registered anymore
Who benefits: Already existing schools. They have successfully stopped competition and can have a captive market.
Who pays: Parents pay more for mediocre education.

Problem: Private schools not providing quality education
Solution: Nepal government legislated that the schools have to meet a long list of requirements to ensure quality (from the number of bathrooms, to minimum number of students to size of desks and every possible detail)
Who benefits: Already existing big schools, who meet those requirement already.
Who pays: Poor parents, who want to send their children to low-cost private schools, are not able to do so because there is no way their neighborhood’s “ghar najikaiko” school is able to meet those requirements. Sadly, they will have to send their children to a public school or just cut down on their meals to afford a ‘quality’ private school.

Problem: Too many vehicles (taxis and public vehicles) in Kathmandu
Solution: Nepal government legislated no new registration of taxis and no new route permits to be given in a number of routes
Who benefits: Taxi syndicate, public vehicle syndicate in that route
Who loses: Consumers again, who pay a lot to ride on a cab with unpredictable fares and engine conditions or put themselves through the pain of riding in a public vehicle in Nepal

These are just a few examples among many around us where legislation have led us to far worse outcomes than the ones it set out to address. Truth is, we want infinite number of good outcomes for our society – quality education, health, better living standards and so much more. But these things do not just grow on a tree if we come up with legislation. They have to be created and have to be paid for, by someone. Do we want to earn and pay for what we need or desire or want to look at another person’s pocket to do get there? The tricky thing with legislation is that, it can be easily used as a means to plunder, as we have seen in several instances. How can we ask more of something that benefits a small (special interest) group at the expense of the larger group through the use of law (which is basically force)? If the trend continues, we will not be a society that adheres to Rule of Law but the one where there is Rule by law and the interchange of those two lettered words in those phrases will determine if we live in a just and forward looking society.

Photo taken from: http://www.offthereservation.net/2013_05_01_archive.html

Photo taken from: http://www.offthereservation.net/2013_05_01_archive.html

Sarita Sapkota

About Sarita Sapkota

Ms. Sapkota is the Coordinator of Communication and Development at Samriddhi Foundation and was previously engaged with the Foundation as a Research Associate for more than three years. She is a graduate of political science and also contributes articles for Samriddhi's column at The Himalayan Times' Perspectives supplement.

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Framework for Foreign Investment Policy for Nepal

IMG_0352On May 23, 2014, Samriddhi Foundation held a round table meeting to discuss the Framework for Foreign Investment Policy in Nepal. As the latest draft of Foreign Investment Policy (2014), proposed by the Ministry of Industry, has been receiving mixed feedback from stakeholders and experts, it had become important to outline a framework that clarifies the objective of the policy and outlines the application of sound measures and tools to achieve the goal.

International Finance Cooperation (IFC)’s investment policy specialist, Mr. Roberto Enchandi was the speaker for the program and he shared his knowledge and expertise during the discussion. Mr. Enchandi specializes in legal and political economy dimensions of investment issues, dispute resolution and regional trade, among other trade-related subjects. He has also served as the Chief Negotiator for Costa Rica in numerous international negotiations on investment, trade in services and dispute settlement.
The meeting was attended by senior bureaucrats, experts, business community leaders, economists, editors & columnists and foreign investors. The event was held at Hotel Yak & Yeti and here is a brief summary of what was discussed during the event.

Mr. Roberto Echandi commenced the discussion by giving a presentation on ‘Improving Investment Climate in Nepal’. He stated that the starting point for Nepal would be making a broad, but concrete and realistic policy framework which prioritizes short term reforms and can be realized within a government’s time; i.e. 2-3 years. He brought to attention that wealth creation is non-linear; simply receiving investment does not ensure growth as can be seen from countries like Nigeria where investment has not resulted in proportional growth or development. Hence, proper investment policies are crucial for managing FDI. His presentation highlighted three key ideas about investment. T

They were:
• “Investment policy is not about choosing between FDI and domestic Investment, it is about connecting            them.”
• “Investment is not a transaction: it is a relationship.”
• “Not all investment is the same, nor has the same impact on economic development.”

Mr. Echandi emphasized that while it is very important to promote and attract FDI, retaining existing investors is equally or even more vital. Keeping investors happy is key to successful FDI management. There are four kinds of investments namely: natural resource-seeking, strategic-asset seeking, market seeking and efficiency-seeking. Therefore, Nepal has to recognize this, decide why it wants investments and create different policies according to the nature of investments. For example, a country rich in natural resources like oil does not have to provide heavy incentives for investment in those sectors. The difference in development between Nigeria and Norway was that while Nigeria failed to differentiate between the types of FDI investments and so its Foreign Exchange appreciated till it was too expensive to produce anything else; Norway realized this difference and started investing in development factors like education.

Lack of transparency and arbitrary changes in the government were responsible for a country losing 25-30% of its existing investments. Thus, sound policies is the secret to success. In making policies, governments need to realize that while efficiency seeking investments might be sensitive and strong bilateral treaties might be required for their attraction and retention; host countries have more power while negotiating natural resource seeking investments which can be used to the countries’ benefit. Currently, Nepal has not been able to attract efficiency seeking FDI. Wealthy countries have diverse export portfolios and this is a phenomenon that is already taking place in Nepal; however, for Nepal is that pie of exports is very small. Even small industries have the potential to make a big difference in terms of export oriented industries, and it is important to start thinking in terms of a Global Vision and where we can fit in that picture.

Following the presentation, there was an open floor discussion moderated by Senior Advocate Anil Sinha.

Some of the key discussion points are summarized below:
• The proposed FI policy only focuses on bigger hotels. Restrictions on promotion for boutique hotels have to  be removed. Training and quality of these smaller hotels also need equal attention. Furthermore, FDI    approval time of 3-9 months is simply too long and needs to be reduced.

• The foreign investment policy of the 90’s and the drive of the government officials then were encouraging to     foreign investors. Now no large foreign investors are interested in investing in hydropower due to political        instability, problems relating to import duty and licenses, difficulty for market access (lack of the power trade agreement), changing laws and policies hence not honoring agreed upon contracts and threats of  nationalization. While problems of larger investments are settled through the investment board, the smaller  investors have no such agencies to solve their problems.
• Strengthening the procurement act is crucial since it is creating havoc in the construction industries.
• Reducing red tape and educating bureaucrats on what the laws are, is important so that discretionary           interpretation of the laws can be avoided, corruption is reduced and the process can move forward quicker.
• Political stability, uninterrupted electricity supply and tackling labor issues will help attract FDI in Nepal.       Furthermore, entering the global value chain area is something Nepal should aspire to.

• Delays in the approval process and discretionary decision making stems from unclear and conflicting regulations. Some policies in the Industrial Enterprise act are not in the Tax Law and so that causes a problem. Furthermore, there are two different agencies doing the same work, which additionally creates unnecessary confusion. This type of system benefits rent seekers. We also have unnecessary environmental clearance hurdles which benefits no one. Moreover, our policies have not been able to change in a timely manner. The Foreign Investment policy is closely related to the labor, foreign exchange and other kind of laws, thus harmonization of such laws is important.
• Information asymmetry exacerbates the problem of opportunists who thrive on the asymmetry. Therefore,        there is little incentive to resolve the information asymmetry problem amongst government bureaucrats.
• It is very important to focus on improving infrastructure, to attract FDI and also to make the tourism sector     more attractive.
• The policy does not address all kinds of investment activities and hence some businesses not listed in the     policy become illegal. Business people thus have to focus their resources on solving matters like this             through loopholes instead of focusing on running their businesses.
• Policies do not focus on retaining investments which is problematic.
• Putting minimum thresholds in sectors like IT, significantly discourage investments in those upcoming           sectors which do not need a lot of investments but have huge growth potential.

The discussion was commented upon by Mr. Echandi and also summarized by Mr. Sinha. The concluding remarks reflected upon the following: Perception is very important for a small country like Nepal thus building a positive image in the international community will help in attracting more foreign investments. As a small country working in the global framework of continuous interaction through mechanisms like World trade Organization and United Nations, one of the major avenues for Nepal to raise and protect its interest is through international agreements and bilateral trade and treaty agreements. Along with building international agreements to defend our interests, a watchdog mechanism to monitor the role and responsibility of government organization is also very important. The process of repatriation and visa requirements need to be hassle free. Conflicting policies and agencies need to be tackled and a harmonization of laws is required to curb discretionary power of bureaucrats. Finally, the Commission for the Investigation of Abuse of Authority needs to not only question but also take affirmative action and be an active and effective agency.

 

Sarita Sapkota

About Sarita Sapkota

Ms. Sapkota is the Coordinator of Communication and Development at Samriddhi Foundation and was previously engaged with the Foundation as a Research Associate for more than three years. She is a graduate of political science and also contributes articles for Samriddhi's column at The Himalayan Times' Perspectives supplement.

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What do experts have to say on the proposed Foreign Investment Policy (FIP), 2014 (Draft)

Foreign Investment Policy (FIP), 2014 has been proposed and brought to the public’s attention recently by Ministry of Industry, Government of Nepal. As a think tank which aims to create a greater discourse on sound economic policies, Samriddhi, The Prosperity Foundation hosted its latest edition of Econ-ity (Samriddhi  Foundation’s regular discussion forum) on the proposed Foreign Investment Policy (FIP), 2014. The discussion was attended by lawmakers, entrepreneurs, present and former members of the bureaucracy, legal experts, policy experts and journalists.

Some of the key speakers were Mr. Rameshwore Khanal (Former Finance Secretary), Mr. Purushottam Ojha (Former Secretary, Ministry of Commerce) and Mr. Madhukar SJB Rana (Former Finance Minister). This edition of Econ-ity was moderated by Dr. Biswambher Pyakuryal (Professor of Economics, TU). Mr. Krishna Gyanwali (Secretary, Ministry of Industry) was present at the occasion to discuss and collect the opinions of the participants on the draft policy.

From left,  former finance secretary Rameshore Khanal, economist Bishwambher Pyakuryal, Industry Secretary Krishna Gyawali and former commerce secretary Purushottam Ojha

From left, former finance secretary Rameshore Khanal, economist Bishwambher Pyakuryal, Industry Secretary Krishna Gyawali and former commerce secretary Purushottam Ojha

There were a number of concerns that came up during the discussion. Some of them were as follows:

1)      The issue of minimum thresholds was discussed at length as a negative factor that discourages smaller scale investment (especially those kind that are predominantly coming into IT and Tourism industry of Nepal)

2)      The institutional structure proposed by the policy was commented as being complex and adding on to the bureaucratic hurdles in getting FI.

3)      The negative list was commented upon as having sectors which could benefit from open competition and foreign investment including retail and real estate business.

4)      The minimum requirements placed on a sector specific basis were questioned as the rationale behind such a policy could not be clearly understood.

5)      Small and cottage industries also argued that they could benefit through small scale foreign investment and technology transfer that comes through foreign investment.

6)      Serious concern was raised over the ‘Nationalization Clause’ present by the current draft.

Overall the participants expressed concern over the current draft’s concentration on big industries and investments. It was generally agreed that a Foreign Investment policy should be open and since SMEs form the basis of Nepali economy, they should also be focused upon while devising a Foreign Investment Policy.

Speakers and panelists recommended a thorough revision of the current draft based upon clear strategic vision and objectives and taking a gradual approach based on research of existing FDI patterns rather than hurrying the policy in this way.

Sarita Sapkota

About Sarita Sapkota

Ms. Sapkota is the Coordinator of Communication and Development at Samriddhi Foundation and was previously engaged with the Foundation as a Research Associate for more than three years. She is a graduate of political science and also contributes articles for Samriddhi's column at The Himalayan Times' Perspectives supplement.

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