Donors Vs. Private Sector [EDITORIAL - February 2002]

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Donors Vs. Private Sector [EDITORIAL - February 2002]

Given the present realities, much more on the economic front of Nepal is to depend now than in the past on the support from the donors. At the same time, it is also true that the donors will lose their credibility if they do not support Nepal at this juncture. A significant portion of the blame for the present mess goes to the donors themselves. The epicentres of the terrorist threat that Nepal faces today are located exactly in those areas which had faced some significant donor interventions in the past. And everybody, even the donors, accept that these interventions have been cases of the failure of the experimentations with the so called “development decades". Till now, the average success rate in the donor- funded projects in Nepal is said to be only around 30% according to the internal assessments of the donors themselves.

The problem in fact lies also in the bureaucracy (which lacks professionalism and thus cannot tell the political leadership or the donors what exactly is needed by the country as donor assistance); on the NGOs (which tend to be more commercialized and prefer pursuing the agenda of their own donors rather than considering what actually is needed by the country); and in the private sector (which always looks forwards to more protectionist favours from the government by maintaining the status quo and opposing the reform measures which may undermine the immediate business interest of the community's leaders). In such a situation, the programme-based assistance from the donors naturally tend to be more squandered (and therefore less effective in meeting the objectives), than the project-based assistance which was the norm in the past. But unfortunately this argument again leads to the same old model of donor interventions that was discarded after the failure of those "development decades". It does not however mean that there is no way out of this dilemma. We strongly believe that such a way can be charted by none other than a responsible private sector. Though a “responsible private sector" is still a rare specie in Nepal, the bright side to it is that it is not a specie that is heading towards extinction. Rather it is an emerging specie. Fortunately, such people who form the present younger generation, are educated in good institutions in the modern corporate culture and are gradually taking over the mantle of corporate governance. Making money for the family was perhaps the challenge for the earlier generation of the Nepali business community. The new generation has this new challenge which, we hope, it can easily tackle. Modern management theories have shown that the primary objective of a business is not profit maximization at least in the short-run. The new and emerging generation of Nepal's private sector has to put this into practice.

The need of the hour is a blue print for Nepal's economic development prepared by such a section of the business community replacing the periodic plans of National Planning Commission. Though such a plan from Nepali private sector cannot be expected to be presented to the country's donors in their forthcoming meeting early February 2002, let's hope it will start preparing one for the next such meeting so that the donor assistance would start flowing into more productive fields than at present.

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