Business in the 21st century has been able to expand its boundaries overwhelmingly, regardless of the geographical constraints. The dream of an “international business community” has now slowly turned into reality. Today the world of business has been talking about expanding its boundaries globally. Now the competition is not only within the internal markets but among the external markets as well. Such a global perspective has introduced new opportunities as well as threats to the existing market. The internal markets of most underdeveloped and developing countries have been threatened to be wiped off against the breeze of global competition.
Nepal, a least developed country, has also been experiencing the waves of globalization that has smashed the traditional way of doing business. It was obvious that Nepal was not prepared for it. During the four decades that Nepal practiced controlled economy, businesses were never encouraged to be competitive in the global market. Most of Nepal’s enterprises had a limited capacity, operating with low levels of technology. They were not efficient and competitive. Later in the 1990’s, the country introduced some economic alleviation programs but many businesses could not adapt to such modifications because of the sudden drastic change in the environment they worked in. During the initial years, there was an exaggerated reaction to the globalization effect as the process of alleviation was not systematic and planned. Later on, after the initial years, business in Nepal began to realize their limitation as they were not geared to meet the challenges of global competition. As a result, companies in Nepal started to experience major adverse situations as companies from outside entered the native domain. Slowly, multinational companies started to capture the local market in Nepal. Keeping in view the current impractical government policies, for an agriculture based country like Nepal, (e.g. removing the subsidy from agricultural activities: a loss for farmers), business analysts are skeptical about Nepal’s opportunity in the global market, although the country is trying to keep its pace with modern technology and the process of globalization. Questions have been raised by analysts: – “Can Nepal handle the adverse effects of Globalization? What would Nepal’s economy be in the global market?” Such questions have become the major issues that focus on the future of our country.
Some analysts in favor of the developing countries say that “Globalization is liberalization.” They say that globalization will bring new ideas and policies that would improve the working conditions of the least developed countries such as Nepal. Globalization in Nepal, however, does not mean liberalization in totality. Many of the laws and rules have unmodified. Similarly, old traditions and practices still exist. Doing business today means competing in the world market. Unfortunately, the entrepreneurs of Nepal seem to abide by the old rules and traditional way of handling business. Companies in Nepal compete in a global environment without the facilities and infrastructure enjoyed by leading global players (such as cheap credit and subsidiary, efficient technology, efficient communication and information access etc.). In such situations, it is obvious that we have fewer opportunities to compete in the global market. So is it really liberalization? Because of its own economic policies and trends, is Nepal facing a threat from international entrepreneurs as a result of globalization?
Optimists believe that globalization is a trend towards the “dissolution of boundaries”. For a landlocked country such as Nepal, chances of exchange of goods, people, knowledge, and ideas are opportunities that globalization has brought into Nepal. This could profit Nepal in terms of prosperity, freedom, plurality and life chances. Unfortunately, like many countries in the world, Nepal has to pay high price for globalization of trade and business. This globalization process brings an enormous pressure for change that calls into question not only traditional forms of economic activity but also the entire basis of daily life activities within society. As a result of increasing interchange of economic activities at all levels, we are becoming more and more dependent on developments outside our own borders including the hope of getting international aids as well.
Theories like SWOT, “Strengths-Weaknesses-Opportunities-Threats”, analysis have said that “threats should be taken as opportunities.” We too should be able to convert the challenges brought by globalization into opportunities for our own benefit. Although the transition due to globalization has introduced a free trade regime that can upset the traditionally-molded business and trade practices of Nepal, it also opens possibilities of gaining huge benefits that could bring economic prosperity to the country. Although Nepal has almost one decade to prepare for the entry into the free trade agreement, it would be wise to take immediate steps towards economic integration. Nepal should also be looking forward to making proper strategies to deal with future challenges.
One of the ways for doing that is to focus on prioritizing our competitiveness and expertise. We cannot expect to compete with India by producing paddy or other industrial equipment or with technology and price. However, there are products such as carpets, pashminas, handicrafts, herbal products, tourism, where no one else can compete with us. These are the areas where we have the edge for business and trade. Although our internal market is small, we can have access to huge South Asian Market where we can sell our products. But it is important to know that Nepal should also focus on building its internal infrastructure, for example, roads and transportation in order to be more competent. Apples from Mustang and Jumla, no doubt, have a possibility of a huge market in the South Asian market. Proper roads will not only open markets for apples from the two regions but will also help in fulfilling tremendous demands for herbs, handicrafts, honey, carpets, and pashmina. However, the present situation is far from reaching such goals. A businessman who invests money in the belief that the Government will continue its policies in accordance with globalization and free market, may be in a dilemma today because our government policies keep changing with little respect for firm commitment to the business sector. Furthermore, with the advancement of technology, there may be a shortage of skilled professionals to enable the country to compete in the global market. Proper coordination of the Government, the education board, and business professionals should trigger new opportunities so that we are able to move forward with a much unified force in the competitive market.