Nepal’s economic freedom score fell by 0.3 point to 50.1 this year, as the country failed to curb corruption, make necessary changes to stringent labour laws and ensure investment freedom.
With this score, Nepal has secured 149th position — as against last year’s 141st — among 178 economies in the 2014 Index of Economic Freedom, jointly published by The Wall Street Journal and The Heritage Foundation, a US-based think tank.
As Nepal could not improve its performance, its standing among South Asian countries — excluding Afghanistan, which was not covered by the survey — slumped to the bottommost position this year, with Sri Lanka, Bhutan and India, securing first, second and third positions, respectively. Until last year, Nepal’s economic freedom position was better than that of the Maldives. Nepal received best score of 54.4 in 2007, when it beat countries like India and Bangladesh. The recently published IEF is a clear indication that Nepal has been losing its clout continuously — as its position is slipping in ‘freedom from corruption’, ‘labour freedom’ and ‘investment freedom’ sub-indices. The report was prepared on the basis of 10 indicators ranging from property rights, freedom from corruption, fiscal freedom, government spending to business freedom, labour freedom, monetary freedom, trade freedom, investment freedom and financial freedom. These data were collected between the second half of 2012 and the first half of 2013.
One of the biggest hurdles facing Nepal — in terms of establishing itself as economically free country — is endemic corruption in politics and government. “Many members of the legislature have been accused or convicted of corruption in the past, but high-level officials are rarely prosecuted,” says the report. “Graft is particularly prevalent in the judiciary, with frequent payoffs to judges for favourable rulings, and in the police force, which has been accused of extensive involvement in organised crime.” Because of this Nepal’s score in ‘freedom from corruption’ sub-index slipped 0.7 point to 21.3 this year.
Also, Nepal’s score in ensuring property rights remained unchanged at 30, which means property ownership is weakly protected in the country. Add to that hurdles erected in the flow of investment capital, and there is a perfect recipe for disaster.
Nepal’s score fell by five points to five in the ‘investment freedom’ sub-index this year because individuals and firms are not freely allowed to move their resources into and out of specific activities, both internally and across the country’s borders.
“Foreign investors face government screening and a challenging economic environment. The financial sector remains fragmented, and government ownership and influence in the allocation of credit remain substantial,” the report says.
In addition, labour regulations are rigid, and restrictions on work hours remain stringent, while bureaucracy and lack of transparency often make business formation and operation costly and burdensome, adds the report.
“Overall, a statist approach to economic management and development is a serious drag on business activity,” adds the report.
source: the himalayan times,15 jan 2014
LINK
With this score, Nepal has secured 149th position — as against last year’s 141st — among 178 economies in the 2014 Index of Economic Freedom, jointly published by The Wall Street Journal and The Heritage Foundation, a US-based think tank.
As Nepal could not improve its performance, its standing among South Asian countries — excluding Afghanistan, which was not covered by the survey — slumped to the bottommost position this year, with Sri Lanka, Bhutan and India, securing first, second and third positions, respectively. Until last year, Nepal’s economic freedom position was better than that of the Maldives. Nepal received best score of 54.4 in 2007, when it beat countries like India and Bangladesh. The recently published IEF is a clear indication that Nepal has been losing its clout continuously — as its position is slipping in ‘freedom from corruption’, ‘labour freedom’ and ‘investment freedom’ sub-indices. The report was prepared on the basis of 10 indicators ranging from property rights, freedom from corruption, fiscal freedom, government spending to business freedom, labour freedom, monetary freedom, trade freedom, investment freedom and financial freedom. These data were collected between the second half of 2012 and the first half of 2013.
One of the biggest hurdles facing Nepal — in terms of establishing itself as economically free country — is endemic corruption in politics and government. “Many members of the legislature have been accused or convicted of corruption in the past, but high-level officials are rarely prosecuted,” says the report. “Graft is particularly prevalent in the judiciary, with frequent payoffs to judges for favourable rulings, and in the police force, which has been accused of extensive involvement in organised crime.” Because of this Nepal’s score in ‘freedom from corruption’ sub-index slipped 0.7 point to 21.3 this year.
Also, Nepal’s score in ensuring property rights remained unchanged at 30, which means property ownership is weakly protected in the country. Add to that hurdles erected in the flow of investment capital, and there is a perfect recipe for disaster.
Nepal’s score fell by five points to five in the ‘investment freedom’ sub-index this year because individuals and firms are not freely allowed to move their resources into and out of specific activities, both internally and across the country’s borders.
“Foreign investors face government screening and a challenging economic environment. The financial sector remains fragmented, and government ownership and influence in the allocation of credit remain substantial,” the report says.
In addition, labour regulations are rigid, and restrictions on work hours remain stringent, while bureaucracy and lack of transparency often make business formation and operation costly and burdensome, adds the report.
“Overall, a statist approach to economic management and development is a serious drag on business activity,” adds the report.
source: the himalayan times,15 jan 2014
LINK
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