Category Archives: Economy

Reducing the Cost of Doing Business to Boost Private Investment and Economic Growth

Many economists of the 20th century spent their life working on theories of economic growth. They have explained their growth models in varying ways and from different angles. The technicalities in these theories might vary but if we carefully examine, we can find a common aspect in all of them. They agree to each other on the fact that higher level of economic growth cannot be attained without high level of investment. The growth in the level of investment increases the level of income and employment, directing the country towards the path of economic prosperity.

These theories, on the basis of empirical evidences have also emphasized on promotion of private sector investment to bring about positive change in income of the country. Following these economists, we can assume that for Nepal to achieve high level of economic growth, facilitation of private investments and private businesses is of utmost importance. To bring about new investments, it should be easier for new businesses and industries to enter the market. Easy entry process reduces the overall cost of starting the business, thus, encouraging new businesses and investments in the economy.

 

But, if we look at World Bank’s Doing Business indicator, Nepal’s position is not very satisfactory. According to World’s Bank report, Nepal ranks 105 out of 109 countries in ease of doing business. An aspiring entrepreneur has to spend 16.5 days and has to go through 7 procedures to register a business. Moreover, it costs 24.9 percent of the per capital income to start a business. These statistics depict that it is not an easy process for new businesses to enter the market, which has impede the new investment in the economy, causing negative impact on growth of income and employment.

In addition to this, paying taxes is also not an easy task. Filing and paying taxes requires a whopping 339 hours and costs 29.6 percent of the profit. Huge cost and time incurred in paying taxes have directly discouraged entrepreneurs to initiate new business ventures.

The inference that we can derive from the growth theories and our position on ease of doing business is that if we are to accelerate the pace of economic growth, starting businesses and paying taxes should be made easier and less costly. In order to achieve high level of economic growth, we will have to attract new investment and businesses which can only be done if overall cost of doing business is significantly reduced.

Ashesh Shrestha

About Ashesh Shrestha

Ashesh Shrestha is an independent researcher. He has an Economics background and is interested in Monetary economics and Public finance.

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Poor too Can Become Reliable Investors

If an economy has high savings rate, the stock money is normally used as investments in the productive sectors. In case of Nepal, looking at the past trends, the gross domestic savings as percentage of GDP has changed a lot. In recent years, the trend has been moving in a downward direction. As per the available data, in 2016, Nepal’s gross domestic savings as percentage of GDP stood at 3.82 percent. As the country adopts federalism and works to make different parts of Nepal as economically competent as possible with the use of a highly decentralized development model, it is necessary now more than ever to have Nepalis saving more to generate substantial funds necessary to invest in local and regional small, medium and large scale infrastructure development works and other related works that drive local and national economic growth. Continue reading

Jaya Jung Mahat

About Jaya Jung Mahat

Jaya is a researcher at Samriddhi where he leads a research on public debt management in Nepal. He has an MPP from Lee Kuan Yew School of Public Policy, National University of Singapore and is also an alumnus of Evidence for Policy Design, Harvard Kennedy School's BCURE Program.

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The fundamental flaw in project planning – The Planning Fallacy

Why do projects rarely get done on time? How come that paper you set 3 hours aside for more often than not take you 8? Why are mega-infrastructure projects almost always over budget and still nowhere near complete on projected completion dates? Picture Melamchi, a project envisioned in the late 90s and scheduled to be completed by 2007. 11 years later in 2018, we are still facing the inconveniences of dug up roads for pipelines, the benefits yet to be reaped. Continue reading

Sneha Pradhan

About Sneha Pradhan

Sneha Pradhan is a Researcher at Samriddhi Foundation with an interest in good governance. She is a graduate student at Heinz College, Carnegie Mellon University in Pittsburgh, Pennsylvania, pursuing a Master of Science degree in Public Policy and Management. She also has a Bachelor of Arts Degree in Economics and Statistics with a minor in Complex Organizations from Mount Holyoke College, South Hadley, Massachusetts.

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Psychographics Analysis in Policy-Making

By now, you must be aware of the fact that Cambridge Analytica, a London-based consulting firm, had harvested data of about 87 million Facebook users to influence latters’ political, business and consumption priorities in countries around the world. Of many ways the data thus collected was processed and used, it’s use in Brexit and also during 2016 US Presidential Election has garnered crucial attention at the moment. The revelations so far indicate that Cambridge Analytica had used the data in building psychographic profile of every British and US voter so as to influence their voting patterns.

Continue reading

Jaya Jung Mahat

About Jaya Jung Mahat

Jaya is a researcher at Samriddhi where he leads a research on public debt management in Nepal. He has an MPP from Lee Kuan Yew School of Public Policy, National University of Singapore and is also an alumnus of Evidence for Policy Design, Harvard Kennedy School's BCURE Program.

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Can a Simplex Model help reform Public Service Delivery in Nepal?

The Nepalese public have faced the brunt of the deplorable state of public service delivery for decades. Portugal was in a similar situation before 2006. However, they saw a remarkable improvement in their public services after adopting Simplex. So exploring the model for Nepal can be a worthwhile venture. Continue reading

Sneha Pradhan

About Sneha Pradhan

Sneha Pradhan is a Researcher at Samriddhi Foundation with an interest in good governance. She is a graduate student at Heinz College, Carnegie Mellon University in Pittsburgh, Pennsylvania, pursuing a Master of Science degree in Public Policy and Management. She also has a Bachelor of Arts Degree in Economics and Statistics with a minor in Complex Organizations from Mount Holyoke College, South Hadley, Massachusetts.

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A Retrograde Economic Vision

The UN categorisations for development of nations in the world is based on the three different levels- HAI, EVI and GNI- measured to give rise to three distinct categories, least developed, developing and high income or developed countries. Without a doubt, Nepal lands in the first category. But considerable progress has been made. Nepal recorded a marginal rise above the threshold on the HAI Index with 68.7 points while the EVI Index was within the threshold limit with 28.7 points. Nepal, however, recorded a low performance on its GNI per capita Index with $865 in the FY 2016/17. Despite the remarkable improvement in two major indices, the GoN stated that the country isn’t prepared for graduation.

All of this begs to a question as to why the Nepal government was reluctant to graduate to the league of developing countries in the first place? Continue reading

Ankshita Chaudhary

About Ankshita Chaudhary

Ankshita is working as an intern in the Research as well as the Communications and Outreach Department at Samriddhi Foundation.

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