Face to Face; Business 360
2016-05-19

 

 “COST OF DOING BUSINESS IN SOUTH ASIA IS QUITE HIGH RESTRICTING INTRA-SAARC TRADE. WE ARE PLANNING TO SET UP SAARC INDUSTRIAL PARKS IN MEMBER STATES AS ONE-STOP CENTERS TO PROMOTE INTRA-REGIONAL INVESTMENT AND CREATE INDUSTRIAL COMPLEMENTARITIES.”

OM RAJBHANDARY   
EXECUTIVE CHAIRMAN   
THE BRIHAT GROUP   

Om Rajbhandary is the Executive Chairman of the Brihat Group and an accomplished entrepreneur noted for his keen business acumen and wide experience. In March 2016, Nepal assumed leadership of the SAARC Chamber of Commerce & Industry which is the apex business body of the region. Suraj Vaidya became the President for the term of 2016-17 and Om Rajbhandary became Vice President of the SAARC CCI. In this edition of Face 2 Face, Om Rajbhandary shares the focus of the SAARC CCI for this term and what it means for Nepal.

What will be the focus of the SAARC CCI Nepal Presidency be?

It is a matter of great pride and honour for Nepal to assume the Presidency of the SAARC Chamber of Commerce and Industry. This is the second time, in its history, that Nepal is assuming this role. And, I am very excited that Suraj Vaidya is leading the SAARC Chamber, who, I believe, is the outstanding leader.

Immediately after the Change of Office Ceremony, executive committee meeting of the SAARC Chamber was held in Kathmandu. The meeting delved on plan and focus of the SAARC Chamber for the next two years, i.e. 2016 and 2017. And all members from the SAARC nations decided to focus on following five agendas, which we believe are crucial for deeper economic integration and help SAARC move towards Economic Union.

Unleashing Investment in South Asia. To us, investment is crucial to ignite cross border trade, industrial innovation, enhance quality of services, and create jobs to curtail poverty which subsequently help socio-economic uplift of South Asian Community. Therefore, investment promotion is one of the prioritised areas. During Nepal’s presidency term, we shall launch South Asia Investment Guide which will identify about 200 potential sectors for investments in the region.

Unleashing Youth Entrepreneurs. We plan to focus on the youth which constitutes 35 percent of the population between the age group of 20-35 years in South Asia. Youth have enormous potential. The energy of young entrepreneurs has not gained momentum due to lack of expertise and capital. In this regard, SAARC Chamber will create “Mentors and Angels” who will invest and guide young entrepreneurs to the fullest. This, we believe, will help create more jobs in the region.

Establishment of SAARC Industrial Parks. Cost of doing business in South Asia is quite high restricting intra-SAARC trade. We are planning to set up SAARC Industrial Parks in member states as one-stop centers to promote intra-regional investment and create industrial complementarities. In this regard, we have approached Government of Bangladesh and Pakistan who have welcomed this idea and have assured of cooperation in achieving this objective.

Launch of CEO Forum. We have worked very hard with SAARC Secretariat to launch the SAARC CEO Forum. The forum envisions involving leading businesspersons who will advocate SAARC CCI’s voice at the highest level. We believe, this will bring extra-energy to SAARC CCI and help promote economic cooperation in the region.

Smart Villages. Even one degree rise in temperature will affect our economies. In SAARC CCI we believe in addressing this issue before it’s too late. In order to address climate change issues in the region, we have signed MoU with ICIMOD to build or work with 16 SMART, GREEN ECONOMIC villages. Furthermore, we will work with SAARC Development Fund to promote green SMEs in the region.

Politics and economics are strongly inter related and South Asia as a region is volatile… what could the key areas of focus be to develop inter and intra regional trade?

During the recently concluded SAARC Foreign Ministerial Meeting in Pokhara - thanks to Nepalese Foreign Minister and his team - we got an opportunity to meet all the Foreign Ministers of the South Asia region. During our meeting, we put forward some recommendations to the Ministers. We asked them to make this region economically vibrant by focusing more on economic issues. We specifically focus on the possibilities of job creation by unleashing the potential of the region to help eradicate poverty. The economy must be allowed to lead the path of prosperity in the region.

We have strongly propagated the SAARC Motor Vehicle Agreement and Railway Agreement to increase the connectivity in the region. South Asia is one of the least connected blocs in the world resulting in higher cost of doing business and low intra-regional trade.

Likewise, we have asked to allow private sector representation through SAARC CCI in economic and development related working groups/eminent persons for effective involvement in policy-making process.

To develop inter and intra regional trade, we suggested to focus on implementation of SATIS and creation of free trade areas under SAFTA vision and also to sign SAARC double taxation and investment treaty in order to encourage and promote cross border and beyond border trade and investment in SAARC.

Regional connectivity has been stressed on for years now, but is there real will to do business with each other among the nations?

South Asia is one of the least connected regions in the world and yes, this issue has been stressed on for years. If you look at all the SAARC Summit Declarations, you will find this agenda in every Declaration. In fact, this is one of the main reasons why intra-regional trade in SAARC is hovering around five percent while that in ASEAN is over 25 percent and in EU is over 60 percent.

But, on the basis of this figure, if you come to the conclusion that there is no real will to do business, you are very wrong. As a representative of the business fraternity in the region, I can see that there is a strong will to do business.

When Indian Commerce Minister Ananda Sharma visited Pakistan in 2012, there were about 100 Indian business leaders in his delegation. Besides SAFTA, there are FTA between Sri Lanka and India, and Sri Lanka and Pakistan. Likewise, there are bilateral trade agreements between Nepal and India, India and Bangladesh, Bhutan and India, Bangladesh and Bhutan, India and Afghanistan, Pakistan and Afghanistan, among others. This all shows that there is a strong will among the nations itself.

If you come to the people’s level, I have seen good bonding and good business relations among the business community of the region. I have seen many business persons commuting in each other’s country for their business promotion. It is true that this has not been properly reflected in the official data, because there are many barriers in the region for economic integration. And, one of them is connectivity. As the apex private sector organisation of the South Asian region, our effort is to minimise these existing barriers to enhance regional economic cooperation. Till date, we are only operating from SAARC CCI Headquarter in Islamabad (Pakistan) but now we are planning to set up three regional offices through which we will engage more business persons in the SAARC Chamber activities.

India and Pakistan almost always dominate the dialogue on SAARC development whether on business or security issues. How do small nations like Nepal get past this to have their issues heard and addressed?

We have decided to establish three sub-regional offices in India (Mumbai), Sri Lanka (Colombo) and Bangladesh (Dhaka). The Mumbai office will look after Pakistan, Afghanistan and Western parts of India; the Colombo office will look after Sri Lanka, Maldives and Southern parts of India; and the Dhaka office will look after Nepal, Bangladesh, Bhutan and Western parts of India. We believe a country like Nepal will benefit from these structures as the scope and area will be more focused.

Besides, the FNCCI has nominated Suraj Vaidya to lead the SAARC CCI as its President for next two years. He is well versed in the issues of small countries and of the whole region’s economy very well. We are confident that he will definitely play a vital role in addressing our concerns in regional platforms and forums.

India has introduced the India Business Card for the SAARC Community ease of doing business for businessmen of high repute to facilitate trade and commerce in line with their Make In India policy. Is SAARC CCI considering any special initiatives in this direction?

This is a very welcome initiative from the Government of India. As I have repeatedly mentioned restriction in the free movement of people from one country to another is hampering our growth. People to people contacts create business and economic opportunities.

The experiences of European Union and other regional blocs show that mobility of people stimulates economic growth by enabling people to travel, shop and work across borders and by allowing companies to recruit from a larger talent pool. Labour mobility between member states contributes to addressing skills and jobs mismatches against a background of significant imbalances in EU labour markets and an ageing population. In Eurobarometer surveys, more than two thirds of Europeans (67 percent) consider that free movement of people within the EU has economic benefits for their country

Unfortunately, SAARC lags very far behind in this aspect and thus is unable to get desired benefit from movement of people which can be seen as an integral component of the single market and a central element of its success.

We have been advocating for free movement of business people in the region for a long time. We have urged Foreign Ministers of all nations during our meeting at Pokhara to allow free movement of businesspersons by allowing them SAARC Visa Exemption Sticker with one-year validity.

SAARC needs to unleash collective strength – what are the areas of thrust during Nepal’s Presidency of the SAARC CCI?

I have already mentioned our focus for the next two years term. Besides, we do not only plan to focus on core areas like trade, investment and tourism but also desire to open new avenues of cooperation and collaboration with think tanks and other regional blocs like ASEAN, EU, among others.

We have started signing cooperation agreements with various think tanks in the region so that we could work very closely in regional economic integration. Last year, we had signed MoU with ICIMOD. In our recent visit to Afghanistan and Pakistan, we signed a cooperation agreement with Sustainable Development Policy Institute of Pakistan.

 

Published on May,2016 in Business 360o magazine