May 3: Former Finance Minister Dr Yuba Raj Khatiwada has warned that the country’s economy is still in risk of crisis.
He made such remark during a programme organized in the capital on Tuesday by Youth Chamber, a sister organization of Nepal Chamber of Commerce (NCC).
Other participants of the programme stressed on export promotion while speaking on the topic of the ‘Current Economic Situation of Nepal, its Challenges and Remedy’. Stakeholders said that the government must adopt a long-term policy to promote export.
Former Finance Minister Khatiwada also said that the reason the country’s economy is struggling to return back on track is the unstable policy of the state.
He stressed on the need of effective collaboration between the Ministry of Finance, the Ministry of Industry, Commerce and Supplies and Nepal Rastra Bank in order to discourage imports and to promote exports.
“The economy has structural problems. We have been forced to import goods and services in all sectors ranging from agriculture to road construction as well as hydropower. Trade management is not effective,” said Khatiwada.
He suggested the government to adopt short-term as well as long-term policies to reduce imports and increase exports.
Stating that the country’s economy still faces risk of falling into crisis, he urged the government to adopt cautionary measures.
He maintained that there are rumors in the market about possible price hike due to scarcity of consumable goods. He further said that the private sector, which has a major share in the country’s economy, must also act responsibly.
Khatiwada stressed on the need to bring the real estate business under the purview of tax. He was of the view that the country’s foreign exchange reserves could improve if the government cracks down on the illegal hundi business and stops foreign visits of Nepali citizens and also bars Nepalis from unnecessarily spending on education in foreign countries.
Of late, the economic indicators are showing positive signs, said Khatiwada, adding that the growth projection of 5.8 percent seems to be practical.
On the occasion, NCC Vice President Deepak Shrestha accused the government of halting imports without any proper planning. He said that the business community has been urging the government for proper management of imports rather than curbing imports.
“The government should have consulted with the private sector regarding which goods should be banned and which shouldn’t before taking a decision,” said Shrestha. He said that the government must adopt an effective policy to increase domestic production in order to promote exports.
Joint Secretary at the Ministry of Industry, Commerce and Supplies Govinda Bahadur Karki informed that the government decided to control the import of luxurious goods after they started taking toll on the country’s foreign exchange reserves.
He added that the government is not against the private sector and assured that the government’s decision will not have any long-term implications.
Speaking on the occasion, economist Bishwas Gauchan and CEO of NMB Bank Sunil Kumar KC said that although the economy is under pressure, it is of short-term nature.