Federation of Nepalese Chambers of Commerce and Industry Faces Challenges Ahead of 60th Convention

The entire private sector stands at the threshold of the 60th executive assembly and convention of the Federation of Nepalese Chambers of Commerce and Industry. The Federation of Nepalese Chambers of Commerce and Industry, which serves as an honorary advisor to the government, was established in 2022 BS with the role of associations active in industry and trade, legally registered in city/market areas like Kathmandu, Butwal, Bhairahawa, Birgunj, Pokhara, Narayangadh, Syangja, Morang, Jhapa, Baglung, Saptari, and Janakpur.

Although initially registered and operated under the name Federation of Nepalese Chambers of Commerce and Industry in its early years, with the passage of time and development, district-municipality and commodity associations became affiliated, and even large business houses became associate members, uniting under the umbrella of the Federation of Nepalese Chambers of Commerce and Industry and becoming active as a Federation.

After the establishment of the Federation of Nepalese Chambers of Commerce and Industry, although it remained the federal representative institution of the private sector for a long time, after the political change of 2046 BS, along with the open economy adopted by the country, an association with similar objectives and nature, such as the Confederation of Nepalese Industries, was formed and has been continuously operating.

Not only that, but the Nepal Chamber of Commerce, one of the founding members of the Federation of Nepalese Chambers of Commerce and Industry, also separated from the Federation of Nepalese Chambers of Commerce and Industry and has been active in building a parallel organizational network. In addition, some umbrella organizations and commodity associations and federations have been formed and are operating separately and autonomously. All these activities have created opportunities for the Federation of Nepalese Chambers of Commerce and Industry to prove some challenges and some excellences.

Against this background, the leadership emerging from the upcoming 60th general assembly and convention of the Federation of Nepalese Chambers of Commerce and Industry must make a clear policy direction with seriousness and impartiality on how to make the changing political environment of the country conducive to the private sector, increase domestic production, substitute imports, and create new employment opportunities.

Within the Federation of Nepalese Chambers of Commerce and Industry, from the perspective of voting power, there are three structures: District-Municipality (50), Associate (30), and Commodity (20). The Federation of Nepalese Chambers of Commerce and Industry, which has the most reliable and largest network after the federal government, needs to seriously consider the following issues in its upcoming general assembly:

• Regarding District-Municipality Members

From a voting power perspective, district-municipality chambers of commerce and industry, which hold 50 percent of the voting power, have been formed in all 77 districts. Even within the same district, municipality-level chambers of commerce and industry, organized within municipalities and registered with government bodies, meeting the criteria, have also been affiliated with the Federation of Nepalese Chambers of Commerce and Industry. Many district-municipality chambers of commerce and industry, despite being formed and registered, are in a dilemma of having to operate or shut down due to financial crisis.

Identifying and mobilizing regular financial resources for these financially distressed district and municipality chambers of commerce and industry may be a challenge for the new leadership. However, as a solution, by providing reliable services according to the hopes and expectations of member entrepreneurs through a capable secretariat, trust in the association can increase, and there is an equally strong possibility of renewing and expanding membership.

After this, if the chambers of commerce and industry focus on production and marketing by mobilizing local resources with the support of the local government, they can contribute to local economic development by operating the secretariat and partnering in self-employment and job acquisition by providing training related to innovation and skill development.

• Regarding Associate Members

This sector, which holds 30 percent of the Federation's share in terms of voting power, is a sector that makes a significant contribution to production, employment, and revenue for the national treasury by establishing private, partnership, and private and public limited companies. The associate sector is also the financial backbone of the Federation's operation.

Considering the reality that investment in land purchase has had to be made for the large infrastructure, machinery, and raw materials required for investment in the production and service industry sector, if lobbying can be done with the government to immediately establish industrial areas with infrastructure and expand the service industry sector, it can lead to a favorable investment environment, creation of employment opportunities, and a significant increase in revenue, establishing a major contribution of the private sector to infrastructure development.

• Regarding Commodity Members

From a voting power perspective, the commodity group, which accounts for 20 percent, is an integrated organized form of small, medium, and large industrialists-entrepreneurs. This sector presents models of local raw materials, labor, and skills, and also makes a significant contribution to taxes and revenue.

For its protection, the Federation of Nepalese Chambers of Commerce and Industry must take the responsibility of coordinating with the federal, provincial, and local levels to provide protection to industrialists-entrepreneurs based on local resources and job creation, and to arrange management through specialized training to reduce production costs.

Apart from the three groups mentioned above, bilateral chambers of commerce and industry are also an important aspect of the Federation of Nepalese Chambers of Commerce and Industry. By bringing in technology from such bilateral chambers of commerce and industry and maximizing the use of local raw materials and the workforce available from the domestic labor market, imports can be substituted, and the youth power that is migrating can be engaged in the reconstruction of the country through job creation.

Keeping in mind the background and context mentioned above, the executive committee to be elected from the upcoming 60th general assembly and convention of the Federation of Nepalese Chambers of Commerce and Industry must prepare its policies, plans, and programs and implement them with honesty. For this, leadership that is diligent, honest, studious, and capable of coordinating and cooperating with all levels of government must be built.

In recent years, the selection of leadership for business associations has been influenced by populism and impractical propaganda that cannot yield results, rather than by subject matter knowledge and agendas.

The Janji campaign on the 23rd of Bhadra, the destruction that followed on the 24th, the formation of an interim election government thereafter, the election held on the scheduled date, and the formation of a government based on the mandate expressed in the election. The Federation of Nepalese Chambers of Commerce and Industry, the federal representative institution of the private sector, will have to face challenges such as widespread corruption in the country, youth migration, weak governance, apparent lack of transparency in decision-making processes, social discrimination, decline in legal trade due to open borders, and the establishment of new industrial areas.

How effective results-oriented cooperation can be made from the private sector with the government formed with a near two-thirds majority depends on how the leadership of the district-municipality, associate, and commodity sectors of the Federation of Nepalese Chambers of Commerce and Industry, trusted by Anjan Kumar Shrestha, is formed.

Just as a federal government with nearly two-thirds majority has been formed, similarly, if Anjan Kumar Shrestha can establish an executive committee in the Federation that he trusts, only then can decisive, meaningful, and fruitful cooperation with the government be achieved, benefiting the entire private sector and the general Nepali people.

(The author is the President of the Butwal Chamber of Commerce and Industry, Rupandehi)