Factor Contributing To Competitive Business Environment in Nepal

Business organizations in Nepal operated for a considerable amount of time under conditions of official regulation and protection. Business was mostly impacted by economic forces. The essential components of the economic system were licensing, protections, tariffs, and quotas. Businesses have continued to be overly protected. They were shielded not only from domestic competition but also from competitors from abroad. The economy was based on shortage. Business organizations mostly functioned in the seller's market. As a result, the macroeconomic climate received all of the business firm's attention. Here are the elements that make Nepal's business environment competitive.

• The appearance of Multinationals:
  • With the economic reforms, Nepal now has a favorable climate for international corporations. The nation already hosts a large number of global corporations. In collaboration with Nepalese partners, some global corporations are expanding into the Nepalese market. The number of joint venture activity has multiplied. Businesses that operate as joint ventures include banks, hydropower projects, financial companies, insurance companies, hotels, nursing homes, educational institutions, etc. Many Nepalese business organizations have also been engaging with their counterparts abroad at the same time.
• Free Enterprise System:
  • The reform initiatives have given the nation enough room for unrestricted entrepreneurial activity. Thanks to reforms, the business environment has changed and several opportunities have now been created. With the licensing barriers gone, business owners can now concentrate on creating the sectors of their choice. They can now choose their own investments on their own terms. Additionally, they are free to solicit money both domestically and abroad. Thus, the businesspeople in Nepal have begun to use this newfound independence. This has caused the industrial landscape of the nation to alter quickly.
• Growing Private Investment in Core Industries:
  • Even in essential industries, the government's "open door" policy has brought about significant change. Core industries like power and telecom had long been solely the province of the public sector of the nation. The private sector and international investment are now welcome in these sectors. Power plants in the nation may now be owned, operated, or built by the private sector or investors. In fact, they have received a lot of incentives for bringing in the necessary investment to the sector. Several projects involving private and foreign investment have been completed in the electricity and telecom sectors just a few years after deregulation. Even the most basic telephone services are now available to the private sector according to the new telecom regulation. To ensure service efficiency, the government has also decided to involve the private sector in the supply of petroleum products.
• Stock Exchange Market:
  • It is anticipated that greater financial sector efficiency will focus financial resources on industries with the highest levels of productivity. The rate of economic growth is anticipated to increase as a result. Capital markets can direct the flow of funding. They give investors the chance to look for and invest in firms of the future. In 2008, there were 147 listed firms in total. 66 of them have been assigned the class "A" designation. Any corporation must listen to stock in order to be qualified for the trading of its shares on the stock market. In a similar vein, there are 2 stock dealers, 9 sales managers, and 23 stock brokers.
• Public-Private Partnership:
  • The idea of public-private partnership (PPP), a countermeasure to privatization, has evolved. Governments are starting to consider long-term solutions where appropriate as they grow more at ease with bringing in the private sector to provide public services. This underlying ambition to create and maintain tight working relationships with the outside market is reflected in the rising use of the term PPP. As an example, the Build-Operate-Transfer (BOT) model is used in Australia and Asia, the Private Finance Initiative (PFI) is used in the UK, Project Franchises (PF) is used in the USA, and Delegated Management of Public Services (DMPS) is used in France. These ideas express the long-term perspective that public authorities and private businesses might collaborate to manage consistent and dependable public services for residents or clients.
• Shift Towards The Service Sector:
  • Over the past few years, it has been noted that the country's service industry is expanding quite quickly. The manufacturing sector has given way to the service sector. This structural adjustment specifically benefits small businesses. The big business-dominated industrial sector is currently losing relative importance. Services, retailing, and wholesale, on the other hand. These are industries where tiny businesses have historically excelled.
• The emergence of Information Economy:
  • In terms of awareness and use of IT resources in a variety of activities, remarkable increase has been seen. When compared to the state sector, private enterprise, banks, financial institutions, hotels, tourism-related services, airlines, NGOs, and foreign organizations that operate in Nepal are in the forefront of the use of IT resources. IT services are being used and applied for more and more frequently. E-commerce is becoming more and more prevalent in business sectors, especially in those where products like handicrafts, carpets, and pashmina are marketed internationally. Additionally, electronic shopping has begun in the neighborhood market. Through the Internet, customers may order products and negotiate deals with suppliers. Opportunities for IT business in Nepal would also increase with the full utilization of existing optical fiber, microwave, and satellite links.
• The Emerging Marketplace Scenario:
  • The consumer products market has undergone significant upheaval. The market is overrun with a variety of goods that have been imported from other nations. Previously unavailable on the Nepalese market, the goods are now in high demand. There is a rising demand for household appliances such as televisions, stereo systems, VCRs, CD players, quartz clocks, laptops, two-wheelers, refrigerators, cooking ranges, washing machines, dishwashers, vacuum cleaners, and others. Therefore, the change in consumer tastes as a result of an increase in consumer income is the most notable development in the consumer products sector. This denotes a transition from traditionalism to modernity. The once-luxurious items have now been transformed into necessities for a modern urban lifestyle. The rules governing the market are likewise changing quickly.

Reference:

• Pant, P. R. (2009). Business Environment in Nepal (SIXTH ed.). Kathmandu, Nepal: Buddha Academic Publishers and Distributers.
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