Investors and businessmen participating in the study have raised the issue of direct physical damage worth billions of rupees, disruptions in production and sales, disruption of supply chains, and loss of jobs for millions of Nepalis as direct consequences of the Genji rebellion.
What you should know
Most political parties have already released their manifestos for the upcoming elections to the House of Representatives on February 21.
Their manifesto considers the private sector as the main engine of the economy and claims to make policy reforms to increase the confidence of the business community.
To reassure investors, the government should keep tax rates stable, the state should only be a facilitator or regulator, create a fearless environment, encourage domestic production and new entrepreneurs, eliminate monopolies, amend laws to remove obstacles, and encourage investment to focus on productive sectors rather than trade.
However, the wounds inflicted on the private sector due to the attacks on its property and physical infrastructure during the Genji uprising on Bhadra 23 and 24 are still fresh. Therefore, no matter which party comes, it seems that the government to be formed after the upcoming House of Representatives elections should make sufficient efforts to heal the wounds inflicted on the business community.
A study report titled ‘Investor Confidence and Business Environment after the Genji Uprising, 2082’ recently released by the online news portal ‘Clickmandu.com’ also shows that the confidence of the private sector has reached a historical low point. According to the report, 98 percent of investors have seen their morale weaken to some extent, while 97 percent of entrepreneurs feel that the investment environment has weakened. Similarly, 70 percent of entrepreneurs are in a 'wait and see' situation for further investment, the report concludes.
The study, conducted with the objective of measuring physical and economic damage and investor-entrepreneur morale and examining the business environment, has shown that Nepal's established and large entrepreneurs have suffered deep psychological and economic damage. In particular, the loss of trust and morale is much more alarming than the physical damage.
The private sector's contribution to the country's gross domestic product, capital formation, job creation and government revenue mobilization is significant. However, the report concludes that the two-day activities have caused serious damage to the physical infrastructure, production system, service delivery of the private sector, as well as having a very negative impact on the morale of entrepreneurs. Direct physical damage worth billions of rupees, disruptions in production and sales, disruptions in the supply chain, and loss of jobs for millions of Nepalis are the direct results of the Genji Rebellion, investors and entrepreneurs participating in the study have raised the issue.
During the Genji protests, various business establishments in the country have suffered physical and financial damage, and many businessmen have been attacked not only in their business activities but also in their personal homes and vehicles. Analyzing the nature of the damage suffered by businessmen due to the Genji protests, it has been found that the morale has been affected more than the physical damage.
‘When industries and business establishments built with decades of hard work and billions of rupees are vandalized and looted, it not only causes physical damage, it also shakes the foundation of an entrepreneur’s confidence,’ said Chandra Prasad Dhakal, president of the Federation of Nepalese Chambers of Commerce and Industry, who participated as the main informant in the report. ‘Having to live in fear of whether your investment and property are safe is the greatest pain for any businessperson.’
Reports of financial damage are coming in after the protests. However, former president of the federation, Shekhar Golchha, said that he felt that the mental damage was greater than the financial damage. "It is intolerable that the class that creates jobs, pays taxes and creates wealth by taking risks is being attacked out of jealousy and resentment," he said.
While 98 percent of the businessmen participating in the study in Klikmandu responded that their morale was affected moderately, greatly or extremely due to the Genji protests, only two percent of the businessmen responded that there was no difference in morale. This fact confirms that the confidence of the businessmen has become very weak. While eight percent of the businessmen said that they were not ready to increase investment or expand their business, 70 percent of the businessmen are in a wait-and-see situation. 21 percent of the businessmen are willing to invest more.
The physical or financial damage during the Genji protests of Bhadra 23 and 24, 2082 BS will be recovered over time, but the impact on the businessmen is indelible," the report said. "During the study, it was found that extreme despair, insecurity and fear of uncertainty have spread among the businessmen."
The report showed that the confidence of the private sector has reached a historical low. The report states that new investment plans have been postponed and some entrepreneurs have even started thinking about 'capital flight'. The message that Nepal has become an unsafe destination for investment has further diminished the possibility of receiving foreign investment.
The damage to the private sector from vandalism and arson in industries, banks, commercial establishments and vehicles during the Genji Rebellion has caused about Rs 34 billion in damage. The indirect economic damage is more terrible than the direct physical damage, which is about Rs 81 billion. It is estimated that this will affect about five percent of Nepal's gross domestic product. RSS
