Welcome to my personal blog. I mostly write on entrepreneurship, economics, libertarianism, movies, and my travels.

Search This Blog

May 21, 2014

How to Register a Company in Nepal?


Registering a business company in Nepal is not an easy process. In an attempt to make the process easier the Office of Company Registrar (OCR) made online company registration process mandatory in October 2013. As a result, Nepal has gone up three spots in the Doing Business Index (2014) ranking 105th among 189 global economies. But that does not mean, navigation of the bureaucratic processes and hassles has become easier. Following chart shows the company registration process in detail. I hope aspiring entrepreneurs in Nepal will find it useful. Please feel free to share the image among your friends and network.

Company Registration Process in Nepal

May 20, 2014

Entrepreneurship Education : Need of the Hour


Imagine this classroom scenario. The teacher asks the students, “What do you want to be in the future?” Bright students in the class reply, “I will become a doctor or an engineer or a pilot.” Others usually say that they want to join the army. The rest have no clue as to what the answer would be. This scenario is likely to have occurred in every classroom of Nepal regardless of time and location.

Our education system so far has been focused on making students employable once they graduate. Whether it has been able to meet the objective is debatable. However, our education system has definitely been unable to develop entrepreneurs who will create jobs that most students will aspire to get later on. As a result, out of the 450,000 young people who enter the job market every year, only a handful get employment opportunities. Most of the remaining leaves the country seeking employment opportunities. 

It can be argued that in our context, level of education is in fact inversely proportional to the chances of the person being employed and doing something productive. The prestige associated with formal education vis-a-vis lack of dignity of labor makes it difficult for an educated person to engage in menial or traditional jobs. At the same time, proper jobs are hard to come by as country is reeling under political instability and mismanagement for decades. Hence, an educated person finds himself/herself in a precarious position of having an education but limited job choices. Therefore, it is not uncommon to find a person who has multiple degrees and is yet jobless.

While we continue to struggle with the inadequacies in our system, the world has been changing at an unprecedented speed. Thanks to the rise of information communication technology and globalization, jobs and industries are transforming and disrupting the status quo like never before. Consider this! Some of the most popular jobs today like smart-phone apps developer and social media expert did not exist until a decade ago. The phenomenon, however, is not limited to information technology field. Jobs like sustainability expert too were not in the mainstream until a decade ago. And many jobs that existed a decade back do not exist today. 

This means that education alone does not ensure meeting the needs of the market. Having students graduate without skills to adapt to the latest market demands is becoming a major issue for developed societies as well. Therefore, the major question today is not whether students have the right set of skills and abilities but whether they are entrepreneurial enough and can adapt to the changing environment. The question is about whether we are creating entrepreneurs or just job seekers. Nepal is in dire need of the former.

In this context, it is high time that we in Nepal include entrepreneurship in our educational curriculum from the school level itself. If we start teaching students about employment skills from an early age why don’t we start teaching them to think entrepreneurially from an early age? When we teach them about Malla Kings and Lichchhavi Kings why not teach them how Nepal was a nation of entrepreneurs and how our historical monuments stand to bear the fact that once we were very prosperous and entrepreneurial. While we tell them that Nepal is home to eight of the ten highest peaks in the world, why not tell them about the immense opportunities of entrepreneurship in the tourism field. Showing them the opportunities while they are young will probably help us counter the pessimistic mindset that seems to have been infesting our nation till date.

Instilling entrepreneurial mindset among the pupils will not be enough. It is also necessary to introduce them to workings of a market and the role of an entrepreneur. This can be achieved by involving students to run small scale enterprises on their own. It can also be achieved by adding entrepreneurial components like profit-making, revenue generation and sustainability to the existing projects related to different subjects such as environment studies or social studies. 

The success of student entrepreneur groups such as Enactus and Students for Advancement of Global Entrepreneurship around the world in creating entrepreneurs out of high school students shows how entrepreneurship is the solution to not only our economic but also our social problems. These two groups have been teaching entrepreneurship to high school students and encouraging them to start their own ventures which could be either profit-making or social enterprise while they are in school.

Teaching entrepreneurship to our future generation while they are young is the need of the hour for Nepal. It could be the surest and the most sustainable way to seeing a reduction in the length of lines of migrant workers waiting for their flight to foreign countries at Tribhuvan International Airport. It could also be an effective way of countering the myriads of social problems that besiege us.

-Surath Giri

May 11, 2014

Proposed Foreign Investment Policy 2014: Is that what we need?


Ministry of Industry has recently come up with the draft of the new proposed Foreign Investment Policy 2014 whose lack of common sense has surprised even the most ardent believers of bureaucracy in Nepal. Notwithstanding the fact that countries around the world, especially the ones lacking capital, are courting foreign investors for capital and technology to spearhead their economic growth, Nepal’s attitude seems to be that of a nation who already has too much of an investment and can afford to be selective in choosing investors. The policy is an example of how our bureaucracy is so out of touch with reality. A few provisions proposed by the policy will prove this assertion.

One of the provisions made by this policy is to ban foreign investments of less than 200,000 US Dollars which is a four-fold increase from the existing floor of 50,000 US Dollars. The policy also bans foreign investments on hydro power projects of less than 30 Mega Watts and less than 3 star hotels. It is difficult to understand why the government wants to dissuade small scale investments and investments in smaller hydro power projects as well as smaller tourism establishments when it is already among the countries with least amount of foreign direct investment in the world. As of February 2014, the total foreign investment in Nepal is valued at around US $1.14 billion from 78 countries which is very low compared to not only its huge neighbors but even compared to other economies in the region. Sri Lanka attracted US $870 million as foreign investment in 2013 alone whereas Pakistan received about US $ 1.4 billion during the same period.

Putting a minimum floor on foreign investment not only decreases the amount of foreign investment coming to the country but also helps concentrate those investments towards larger businesses and industries only. This increases the possibility of undue influence among policy makers and government officials by the few large scale investors among. Such a floor also prevents foreign investment and technology transfer in small and medium scale enterprises whose capital requirements are lower compared to their labor requirements such as restaurants, tourism agencies and information technology companies. Majority of the IT companies in Nepal are small and medium enterprises requiring investments much lesser than the minimum floor proposed by the policy. Implementation of such policy would eventually result in elimination of small scale IT companies who have been providing large number of lucrative employment opportunities to Nepalese IT professionals.

Similarly, the provision of not allowing foreign investment in hydro powers of less than 30 Mega Watts will bring nothing more than harm to the economy. The cost of production for one mega watt of hydro electricity ranges from 150 to 180 million Nepalese rupees which is unlikely to be raised from Nepalese investors alone. On the tourism sector too, what we need is more innovations in more destinations rather than large scale investments in already crowded sectors and activities. 

Big Contradictions

Hence, the prudent step for the government would be to encourage more small scale foreign investments not discourage them.Some government officials have been quoted as saying that the minimum floor of investment is needed to prevent some foreigners from opening up small scale enterprises and using such investments as a reason to keep staying in Nepal. One would wonder what the problem in that is. On one hand, Nepal is trying to attract a million plus tourists in Nepal. On the other hand, government does not want these people to make small scale investment and use it as a reason to stay in Nepal. It is definitely hard to find logic in these contradictory approaches. 

And if foreigners staying in Nepal using small scale investment to their advantage is a problem then isn’t it a problem of department of immigration? Banning all the small scale investments just because some foreigners are “misusing” them is tantamount to throwing the baby out with the bathwater. 

Another provision in the policy that raises huge concern is the formation of Foreign Investment Promotion Council. The council, per se, would be a positive step towards facilitating the investment process in Nepal but the way it is staffed raises concern. The council is supposed to be chaired by Minister of Industry and consist of representatives of more than 12 government agencies. Since the membership is so diverse and the council duties are not among the priority for the officials, the council is likely to never convene or be efficient enough for making decisions which will ultimately end up leaving investment processes in limbo.

What next then?

With all these clauses, the new proposed Foreign Investment Policy 2014 is more likely to do more harm than good to the Nepalese economy and can be considered a regressive policy when compared to the existing foreign investment policy. The right thing to do for a developing economy like Nepal, is to attract as much investment (both local and foreign) as possible not discourage them. In this era of globalization, too many countries are courting foreign investments and we cannot afford to be choosy with regards to investment. The best policy for Nepal would be to welcome any investor with any amount of money who is willing to create jobs and prosperity for our citizens. It is imperative that policy makers understand this reality and revise the policy accordingly.

-Surath Giri

Apr 30, 2014

It's a hard earned poverty: Let everyone know!


Prithvi Narayan Shah, in his lessons for his fellowmen once said “It is not an easily earned nation, let everyone know”. We have neither forgotten his teachings nor rested on our laurels, although what we have added to our list of achievements is a much more formidable and unique thing that we believe the world should appropriately envy us for―abject poverty and backwardness. Any citizen of the world on an average earns about $11,640 and people around the world are reeling under the pressure brought about by increasing wealth and prosperity.  Whereas, it seems, we have laboriously worked to keep our income under $1300 and also keep any shreds of prosperity at bay. The world may wonder, how have we managed to achieve such poverty despite all the pressures but there are not many secrets for our success― although it does take an incredibly hard effort to do so. The world should learn from our efforts and follow us if it doesn't want to suffer the weight of choice, opportunity and prosperity.

The primary enemy of poverty is an individual. The ominous inbuilt impulse of every individual to seek ways to put oneself in a better position is the most formidable enemy for any seeker of poverty. Hence, letting individuals politically, socially and economically free is one of the surest ways of making them fall into the miserable pit of prosperity. Secure private property rights is the evil base for prosperity as the world has already realized. 

We have been working hard to make people insecure about their lives and properties till date. In the past, we let the Kings own the whole nation and do as  their whims pleased ,we had autocratic Ranas to shoulder the burden. Currently,  our political leaders and some self-appointed masters of the country  taken on themselves the task of bearing the burden of property and prosperity so that our mass can bask in the glory of poverty and backwardness. Anyone who dares to fall into the charm of prosperity is promptly brought out by our leaders who have aptly collaborated with criminals to strip these people of their properties and, in many instances, of their lives. Our political leaders and elites have been working hard to take away all the property of the mass and keep it to themselves so that they themselves suffer the evils of prosperity and save the rest of us. Some people question our leaders for amassing wealth while preaching about collective poverty. I find this unfortunate. People don't understand how hard the politicians and elites are suffering under the pressure of wealth so that we can enjoy our wretchedness.

Entrepreneurial instinct is another hurdle on our way to success. To counter this instinct and mitigate its impacts, we have made sure that our children grow up hating the concept of entrepreneurship and profit-making. State worship and cult of political leaders/kings are some of the concepts we instill in them. Ask any of our young people, if they know how nations around the world have fallen into the misery of prosperity and they will amaze you with their ignorance. Just utter a few words like economic freedom, free markets, capitalism in front of them and you will be taken aback by their hatred for these evils of prosperity even if they do not know what these really mean.

Despite our efforts to curb entrepreneurship, some people have eventually fallen into the trap. Enamored by this evil, they take risks, start ventures and many times convince enough people to buy their products and services and make enough wealth. But we have not been passive about this at all. Political interference and indoctrinated laborers have been our major tools for fighting against entrepreneurship. We have trained our workers enough and even equipped them with weapons to fight against any wealth creation. We want to be a nation of proletariats not of entrepreneurs. How could anyone undermine the importance of continuous labor agitations, industrial shutdowns, except that which stems out of sheer ignorance? Sometimes, our laborers are easily misled from their path of struggle by the shreds of wealth entrepreneurs throw at them. And that's a pity. In such cases, our leaders send their cadres to crush the enchantment and continue the agitations. But some people are really ungrateful. They complain of being jobless and curse the efforts of our labor unions. How ungrateful of them― instead of enjoying the new found poverty they question and curse our leaders' judgments. They and the world as well, should appreciate the way we have been tackling the problem. For e.g. If a business becomes well known or starts reaching out to too many people or starts spending a lot of money on advertising it products or tries to have an affiliation with the foreign prosperity, we promptly shut them down or ask them to depart with a significant portion of their wealth to feed the leaders so that they remain within our sphere of poverty. It definitely is a tough job, and the world should realize that.

You must be wondering how do our governments and politicians manage the wealth then. Well, that's not a tough job if you are well-skilled. Just look at our roads for an example, which have to be mended almost every month. If our government had built them properly and without careful strategy, we would have no place to pour our wealth and we would have accumulated wealth. Just imagine how disastrous that would have been. Take any instance of our government's work and you will find they have been carefully done in a way that we get a chance to pour wealth every once in a while. We have also taught the people that paying taxes to the government so that they can be poured into the aforementioned jobs is a very patriotic act. Just observe the success of our strategy through the hue and cry that arises when tax evasion by a person or company is found but not an utterance of protest when government (agencies, departments, officials, ministers) carefully mismanages and destroys that wealth. 

Political interference in any task has been our overarching tool for achieving poverty and inefficiency across the sectors of economy and classes of people. From educational institutions to religious institutions, from a family to districts, we have virtually left  no sector free from the loving embrace of politics. For, we are well aware of the fact that, political meddling is the sure shot way of making an economy kneel down. If a property is allowed to be mobilized by its owner, there is a high chance that it can be used to create prosperity so we have preached the virtues of collectivism and putting society above individual needs and rights to everyone. Just look at how every political party of ours’ talks about collective poverty but never of wealth creation. That is our secret.

Another very effective tool we have found for achieving our purpose is the blame game. Although, majority of our people have never seen or been to United States and is located on the other end of the world, we have made sure that everyone knows it is our primary enemy. Similarly, our political leaders have made it a condition that we all show our patriotism by cursing and blaming India. We know, if we people were to look within themselves and analyze, they might find that doors to prosperity lies within. It would be very unfortunate that if people stopped blaming foreigners and started self-analyzing. We could very well, bid our hard earned poverty good bye.

Despite all our efforts, we couldn't convince a portion of population about the virtues of poverty and backwardness. Lured by opportunities and prosperity in other countries, they have been quietly sneaking into those countries as laborers and workers. We did not put much thought to the trend at first because we were working hard to preserve our hard earned poverty here in home. But one day, to our horror, we realized that these people sneaking out of the country were responsible for a sudden decline in our poverty. We panicked, so did our international friends (organizations) who admire poverty. So we quickly adjusted the figure and have been thinking of ways to counter the trend. We have already countered the tendency of people going to foreign army through our effective tool of 'nationalism' and 'patriotism'. But we have been finding it difficult to counter rest of the emigrants. So we have been trying to make it harder for them to go abroad and making everyone aware that it is unpatriotic. These people should have enjoyed the poverty at home than going and laboring in the foreign country for the lure of prosperity, our argument goes.

We have been known in the world for our natural endowments rather than our achievements. That indeed saddens us. Hence, we intend to preserve our poverty and make it so unique in the world someday that we will be the only 'poverty blessed' nation on Earth. However, our achievements so far are equally appreciable. So, the world better know that our poverty is a hard-earned thing and it takes enormous efforts to do so.

(First published on www.bichardabali.com )

Mar 3, 2014

The Wealth Gap : Should We Be Concerned?


Relationship between Economic Freedom and Inequality
Last month international development organization Oxfam released a startling figure about the wealth gap between richest people in the world and the poorest half. According to the report, 85 of the wealthiest people in the world own as much wealth as the poorest half of the world. In other words, less than a hundred people have control over half of the world’s current wealth. The revelation has appalled many people and has refueled the tirade of criticisms being raised against capitalism and free enterprise. Nepalese media and intellectuals too have picked up the issue and resumed their criticisms against market. Income inequality is an issue Nepal should be concerned with too. It ranked 157th in the Human Development Index 2013 and the Gini Coefficient is 32.8 suggesting a significant income inequality. In this context, it is imperative to dwell on whether such income inequality is desirable for a society and what can be done about it.

Not just economic implications

High levels of income inequality and concentration of wealth among a few people is certainly not desirable for a society. It can dampen the benefits of democracy and skew national policies making them favorable to the political and economic elites only which in turn will have negative effects on economic growth and development process and poverty alleviation measures. Income inequality has been found to correlate with violence and higher crime rates in a society too. 

However, it is essential to dwell on whether income inequality is a problem in itself or is it a symptom of underlying structural problems in the economy. Hence, the question is not just why 85 people own half of the world’s wealth but it is also why the poorest half of the world is producing and creating so little wealth when there seem to be immense possibilities for creating a wealthier world.

Lack Economic Freedom: The main cause

It is interesting to note that majority of the poor in the world live in societies that are miles away from free market system and are supposedly pursuing policies aiming equality and wealth redistribution. India alone hosts one-third of the world’s poor and until 1990s, its major policy thrust had been wealth redistribution and state control of the economy. China which is another major home for world’s poor, started down the path of market economy only after disastrous 3 decades of anti-market and supposedly pro-poor policies. By moving towards market economy and promoting growth rather than redistribution, India has reduced its poverty rates from 51% in 1991 to 22% in 2013. China has achieved an ever more impressive progress by reducing poverty rates from 84% in 1981 to around 12% in 2013. What critics of market system have left out is the fact that the wealth distribution around the world was even more skewed before 1990s when many countries around the world started moving towards market economies.

Empirical studies conducted in the context of developing countries have also found that economic freedom and income inequality have inverse relation suggesting that higher degree of economic freedom would result in lesser income inequality. For instance, a study titled “Economic Freedom and the trade-off between inequality and growth” conducted by economist Gerald W. Scully has found that economies with higher economic freedom not only enjoy higher growth rates than less free economies but they are also more equal. Economic freedom reduces inequality by increasing the share of market income going to the poor and lowering the share going to the rich. Economic Freedom of the World Index, a cross-country study on economic freedom conducted by Fraser Institute of Canada also shows that freerer societies are comparatively more equal than societies with lesser economic freedom.

Feb 10, 2014

Why is Nepal poor? Some common arguments we hear everyday!!


Why is Nepal poor? Why has it not been able to develop economically? These are some of our most favorite topics for conversations in tea shops. Infographic below lists 5 of the most common arguments we hear about why Nepal is poor and analyzes whether these arguments really hold their ground. Enjoy!


So what do you think about these arguments? Feel free to share your views and opinions in the comments!

Jan 16, 2014

17 very good books I read in 2013


I managed to read 35 books in 2013. Not as much as I had wanted but still more than I had read last year and the year before. Except for one or two, I found all of these books very interesting and knowledge-enhancing. And here are the top 17 of them. I found these books particularly interesting and recommend my readers not to miss them:

1.India Unbound: The Social and Economic Revolution from Independence to the Global Information Age by Gurcharan Das

I had heard so much about this book and yet had not been able to get my hands on it. Therefore, it was the first book I sought and read last year. Das, a brilliant businessman and a gifted writer, recounts India journey from its independence from British colonial masters in 1947  to independence from its internal elite masters in 1991 and its transformation from an impoverished centrally planned economy into a wildly growing vibrant free-market economy. Das has done a remarkable job of explaining how Nehru's socialist dreams and his daughter's actions ended up choking every entrepreneurial urges in India, what a businessman's life was like during the "license-permit raaj" and how the reforms of 1990s were initiated and what they have achieved so far. If only, half of the Nepalese who spend time blaming India for Nepal's woes read this book and learned about India own struggles, I guess Nepal would have been a different place.

2. Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant by W. Chan Kim and Renee Mouborgne

This book kinda challenges what you have learned about competition and strategies so far. The book discusses about a new strategy, 'Blue Ocean Strategy' which is in contrast to prevailing Red Ocean Strategy where competitors have turned the ocean red with each other's blood. In Blue Ocean Strategy, you disregard the prevailing assumption about your sector and industry and try to create an entirely new market for your products or services. If implemented properly Blue Ocean Strategy would turn the competition completely irrelevant. The book has included a few examples of what blue ocean strategy is like in practice and you can Google for more case studies. All of the case studies are very very interesting. I did have several aha moments. This is a must read book for any aspiring entrepreneur! 


3. The Beautiful Tree: A Personal Journey Into How the World's Poorest People Are Educating Themselves by James Tooley

The book is aptly titled a personal journey. It describes the personal journey of James Tooley who accidentally discovers low-cost private schools in the slums of India catering to the children of poor parents. He finds out that parents despite being literate and poor, take a lot of care while choosing schools for their children and hence, opt for low-cost private schools with low resource than for the free education provided by resource rich state run schools. He also finds out that students from these low-cost private schools generally perform better than their counterparts in state-run and INGO funded schools mainly because the school administration and teachers are more accountable in these private schools. The trend, however, is not endemic to India. Tooley travels across Africa in search of such schools and finds them. But what about China?, he wonders. Does China have such low-cost private schools too? You need to read the book to find out the answer.

4. Leaving Microsoft to Change the World: An Entrepreneur's Odyssey to Educate the World's Children by John Wood

In 1998, John Wood, an executive at Microsoft was trekking in Nepal to enjoy his vacation and relieve the stress from work. Apparently, a friend of his had told him, "If you get high enough in the mountains, you can't hear Steve Ballmer yelling at you anymore." His guide took him to a small school in Bahundanda whose headmaster told him that he hoped John would be different than other visitors and fulfill his promise of coming back next time with books. What happened from that point onward is history. John left his job at Microsoft and founded Room to Read which has provided millions of books and built thousands of libraries for schools in developing countries in Asia and Africa. The organization has also built many schools and provides scholarships to female students. This is a heart-warming tale of how a passionate individual could make the world a better place.

5. A Fine Balance by Rohinton Mistry


One of my most favorite novels tills date, A Fine Balance is a poignant story of a strong-willed widow, two tailors trying to escape caste violence and a boy who has been displaced from his naturally beautiful village. Living in the 1970s under the authoritarian atrocious rule of Indira Gandhi, their lives get inter-tangled when they are forced to share a flat. The novel is grim, very grim in fact. There are moments of joy, moments of hope for sure. But in overall, the book does not shy away from presenting grim realities of the then society and life in general and more than that the book does not spare its characters from vicious tricks of fate and life. But rest assured, the grim fiction presented by the novel is more closer on the reality's side than on fiction's and long after you finish the book you will be haunted by its characters.