By Modnath Dhakal
Kathmandu, May 10: The entrepreneurs running large, medium and small industries are in a dilemma about resuming production after being shut for about seven weeks.
They pointed out that the access to banks and financial institutions and markets, management of human resources and raw materials were the major challenges that could force especially the manufacturing industries to remain off the operation as long as the lockdown lasted.
More than three-fourth of the industries, especially the large plants, closed operation with the imposition of lockdown on 24 March.
"I don't think most of the industries can come into operation following the guidelines as they have to exhibit their mettle to arrange human resources and raw materials amidst the restrictions for making movements," said Krishna Prasad Adhikari, Vice-President of Confederation of Nepalese Industries (CNI).
The government has said that all business enterprises that intend to resume production during the lockdown should strongly adhere to the guidelines prescribed by the World Health Organisation (WHO) and the Ministry of Health and Population.
A Cabinet meeting decision on Wednesday had allowed the enterprises and industrial set ups to resume operation barring hotels, restaurants, civil aviation, mass transportation, malls, religious gatherings and celebrations, parks, sports activities, and educational institutions.
Industries will face challenge in selling the products as the market centres across the countries are shut, and the government has allowed the opening of only the department stores and malls selling foods and necessary items, not other products like cement, steel, garment and footwear. Yet consumers are facing trouble to reach the malls to buy even the food items.
Nepal Foreign Trade Association has expressed concerns over the transportation of the produced goods to the market.
It said that unless the wholesalers and retail shops are opened, and seamless transportation of goods is ensured, operating the industries is meaningless.
"Produced goods reach the consumers through the wholesalers and retailers. It is difficult to obtain passes for the vehicles and transport the goods to the suppliers," said the NFTA.
The business body has demanded with the government to create a convenient environment for the resurrection of the entire supply chain in order to bring the manufacturing industries back to life.
Lockdown in India hinders supply of raw materials
Adhikari pointed towards another burning challenge of raw materials. Since most of the large industries except some like the cement import raw materials, another system needs to be put into action to facilitate import. More than 65 per cent of Nepal's foreign trade happens with India
which is also the largest source for the raw materials from garment to MS billet while the southern neighbour is also in lockdown imposed to check the spread of coronavirus pandemic.
"Without opening of markets in India, it will be difficult to import raw materials. Only some medium and small enterprises running on domestic raw materials can sustain in case the lockdown is prolonged as they have limited stock of the resources," said Adhikari.
Human resources will be the greatest challenge since most of the workers have reached their homes in different parts of the country. "Especially the small and cottage industries will face problem in the mobility of the workers. Many of them do not have their private vehicle to carry the staff and workers while public vehicles are not available," said Suresh Pradhan, former President of the Federation of Nepalese Cottage and Small Industry (FNCSI).
He said that the cottage and small industries will face problem in arranging capital to run the business so the government should inject money to keep the enterprises alive.
As most of the industries do not have residence facility inside the factory premises, they will face difficulty in making the workers available. The government must facilitate the industries to run them in a sealed environment with workers staying inside the factories, suggested Pradhan.
Meanwhile, workers that return from their homes in other towns and villages may not be welcomed by the house owners. "The government should facilitate in brining the workers from green zones to the industrial area and the District Administration Office should coordinate in this," recommended Adhikari.
Women and small enterprises may not revive
The Federation of Women Entrepreneurs' Association of Nepal (FWEAN) has drawn attention to the higher risks to the survival of women-run enterprises.
"Most of the women entrepreneurs are limited to small and cottage industries. Only 2-3 per cent large businesswomen have obtained bank loan for their enterprises so the government announced relief won't be useful for the majority of us," said Sharada Rijal, Immediate Past President of FWEAN.
She termed the government decision to allow the industries to operate an ‘unrealistic’ as it did not state clearly about the mobility of the workers and goods during the restriction.
Demand for sustainable system
However, the business bodies have asked the government to create a well-managed system to distribute the mobility passes to the entrepreneurs and workers.
The CNI has urged the enterprises to adhere to health and safety standards. It has suggested the government to categorise the country in red, orange and green zones and continue with the opening of businesses in less-riskier areas.
Minister for Finance Dr Yuba Raj Khatiwada and Minister for Industry, Commerce and Supply Lekh Raj Bhatta have expressed their intentions to facilitate in the revival and rehabilitation of the industries and economic activities. However, the private sector is confused as there are no clear indications of sustainable system for market, human resources, access to capital and raw materials.
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