Tuesday, Oct 21, 2014

A billionaire and a ghost trading floor: Tale of Nepal’s paralysis

Written by Reuters | Kathmandu | Posted: October 8, 2013 1:37 pm

Nepal’s only billionaire made his name selling instant noodles. Now he’s got an eye on running the young Himalayan republic.

Binod Chaudhary,recently valued by Forbes at a billion dollars,says he would give up business for a shot at governing one of the world’s poorest countries. But not yet. Nepal’s politics are just too messy,even for a man who was able to build a business empire during a civil war.

Wedged between two of the world’s largest markets,India and China,and home to its most spectacular mountains,Nepal should be a manufacturing,tourism and trading success.

Chaudhary is testament to the possibilities. Having started out selling noodles to India,then all over Asia,his family-owned conglomerate includes a bank,a telecommunications business and dozens of resorts,including two in the Maldives in partnership with India’s Taj Group.

But Nepal is one of Asia’s most unstable countries,despite seven years of peace since the end of a Maoist war that helped topple a centuries-old monarchy. It has had five governments since 2008 elections and politicians have not been able to agree on a constitution that will lay out the contours of the state.

Elections due on Nov. 19 for a new constitutional assembly are expected to go ahead despite threatened disruption by a significant faction of hardline Maoist parties.

That’s too soon for Chaudhary,who wants the political parties to finish writing a new constitution before he takes the plunge into full-time politics.

“There is no point in getting caught in between in a situation that you can’t resolve,” he said,in a reception room offering sweeping views of Kathmandu’s packed streets and nearby mountains from the top floor of his headquarters.

The tycoon,whose mansion is decorated with leopard-print furnishings,busts of black stallions and a fresco reproduction of Giovanni Battista Tiepolo’s ‘The Banquet of Cleopatra’,says he would like to jump squarely into politics when the impasse is resolved.

Chaudhary said he would then apply his business acumen to create jobs and fix infrastructure,ending power cuts that keep the lights off for up to seven hours a day.

Chaudhary does business from Thailand to Tanzania,a hedge against the uncertainties of his landlocked country.

Amid the political churning,hundreds of thousands of people leave for jobs overseas every year and businessmen fear to invest. Growth slumped last year to 3.5 percent,the slowest in five years,and inflation was above target at 9 percent.

With successive short-lived governments barely in power long enough to fill posts,there has been little clarity on what type of economic system the country will follow.

“Every six months you have a new prime minister,a new government so how can people invest?” said the Finance Ministry’s top economic advisor,Chiranjeevi Nepal. “Whether to follow the liberal,open economy or the mixed economy,that is the confusion here. Investment needs clear policies.”

GHOSTLY EXCHANGE

Nowhere is that confusion more apparent than at the Nepal Stock Exchange. Located in a squat,brick building by a rubbish-strewn stream,the NEPSE feels a long way from Wall Street. Its hoarding is hand-painted,its electronic ticker blank since it broke five months ago.

Inside is an abandoned trading floor,frozen in time since the exchange replaced open-outcry trading in 2007. Rows continued…

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