nepal polotical

1. Chapter two:
Political Environment
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2. "Man is by nature a political animal."– Aristotle
Politics is the major policy of the state what leads
all policies.
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3. Political Environment
Introduction to Political Environment:
•Politics (from Greek word politikos, meaning "of, for, or
relating to citizens") is the practice and theory of influencing
other people on a civic or individual level.
•More narrowly, it refers to achieving and exercising positions
of governance — organized control over a human community,
particularly a state.
• A variety of methods are employed in politics, which include
promoting one's own political views among people,
negotiation with other political subjects, making laws, and
exercising force, including warfare against adversaries.
•Politics is exercised on a wide range of social levels, from
family and people of traditional societies, through modern
local governments, companies and institutions up to states,
to the international level.
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4. Some common definitions of politics:
– Politics leads all other sectors of the
state.
– Politics is the exercise of power
– Politics is the public allocation of values
– Politics is the resolution of conflict
– Politics is the competition among
individuals, groups, or states pursuing
their interests.
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5. •Politics and Business/Organization (A discussion
in a class)
•Robert Mugabbe in Zimbabe kicked out all the
British from the country. What happened with
their business?
Any other examples?
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6. An overview of Nepalese Politics
• Multiparty Republic system in transition
• Constitution drafting process is ongoing
• Proposed system of state - Federal Republic
Multiparty system,
• Law & order of the country is very weak,
• State is ruled on ad hoc basis, on the
consensus of 4-5 major parties rather than
in system
BusinessEnvironmentAnalysis
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7. Political Environment
Political Parties and Political Structure in Nepal:
Rana’s time
Panchyayet
Democracy in 2046
Maoist Started conflict in 2052
12 Point agreement among major political
parties
People’s movement in 20/62/63
Constituent Assembly election
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8. Political Environment
Constitution:
•A constitution is a legal documents, a blueprint
(draft or design) for the governance of the state.
•It lays down the fundamental principles,
policies, institutions, powers and sets limits on
the exercise of such power.
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9. Nepal Constitution history
•The Nepal Government Act- 2004 (Nepal Sarkar Baidhanik Kanun-
2004):By: Padma Shumser JBR.
•The Interim Constitution of Nepal- 2007 ( Nepal antarim shasan
Bidhan- 2007 falgun 7)By: King Tribhuwan.
•Nepal adhirajya ko savidhan 2015 – by HM king Mahendra shah in
falgun 1, 2015.
•Nepal ko savidhan 2019- by HM king Mahendra shah in paush 1,
2019.
•Nepal adhirajya ko savidhan 2046- in 2046 ,karthik, 23.
•Interim Constitution 2063- in 2063 magh 1.
The current Constitution Assembly
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11. Political Environment
Political Parties:
Nepali Congress
CPNUML
CPN Maoist
Madhesi Jana Adhikar Forum
Rastrya prajatantra Party
Majdur Kisan Party
Sadhbhawana party etc
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12. Political Environment
Government and its branches/Political
Institution:
Legislature
Executive
Judiciary
Others are:
Cabinet
Council of Ministers
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13. Political Environment
Government and Political Institution:
Government Structure: National, Regional,
District and VDC level/municipality
National Planning Commission
Human Rights Commission
Thousands of NGOs and INGOs
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14. Political Environment
Role of Government:
• Government objectives are to attain:
• economic growth
• Employment
• regional equity
• social justice
• stability in practices and
• economic stability
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15. Political Environment
Role of Government:
To attain these objectives Government has to
play different roles. Some of them are:
• Facilitating role
• Regulating role: e.g. against monopoly,
cartelling
• Entrepreneurial role: eg. Public enterprises
like NTC, Salt trading, NAC
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16. Political Environment
Government – Business Relations:
• Government and Business market are
complements rather than substitutes.
• Business firms become one to give pressure to
Government when tax issue comes
• Their interests are reverse but they are
dependent as well
• There are some aspects of government
business relations. They are:
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17. Political Environment
Government – Business Relations:
1. Government Ownership Business
2. Employer’s association
3. Labor as a political Force
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18. Political Environment
Government – Business Relations:
1. Government Ownership Business:
• Public sector under direct control of
government
• 7- industrial enterprises, 7 service enterprises,
six business enterprises, 3 public utility
organizations, and 8 financial institution
• Total investment in NPR 84.92 million
• Out of 36 public enterprises 22 had earned
some profit but 14 were in operating loss
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19. Political Environment
Government – Business Relations:
2. Employer’s association:
• Different firms have their own association, like
Association for transportation, hotel, retailers,
distributers etc etc.
• In Nepal such association is led by Federation
of Nepalese Chambers of Commerce and
Industry (FNCCI)
• This is an umbrella organization of Neplese
private sector
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20. Political Environment
Government – Business Relations:
2. Employer’s association:
• They have networks from national to district
level and municipality level as well
• 89 in district/municipality
• 61 commodity/sectoral association
• 361 public and private sector undertakings
• 10 bi-national
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21. Political Environment
Government – Business Relations:
2. Employer’s association:
• They try to influence Government policy
through FNCCI
• The role of this association has bee to watch
over their members commercial and financial
interests
• The government seeks advice on important
policy matters
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22. Political Environment
Government – Business Relations:
2. Labor as a Political Force:
• Workers and their trade unions
• They politically oriented in Nepal
• They work as pressure groups and keep an eye
on emerging business government relations
• As they have support from political parties
their voices are heard by government and
firms
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23. Political Environment
Assignment:
Describe the Problems of Nepalese Political
Environment in Business and Analyze the impact
of these on overall Nepalese Business
Environment.
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24. Political Risks/Problems
• Political risks are defined as any changes in the
political environment that may adversely
affects the business activities.
• Probability that a given political event will
affect a given firm.
• Political risks is in all the countries but its level
is different
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25. • The three major types of political risks are:
– Ownership risk: representation of property and
life of the firm.
– Operating risk: interfering with the ongoing
operation of firm.
– Transfer risk: shift funds from a country to
another.
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26. Political Risks/Problems
Political risk analysis:
Analysis of political is necessary to determine the
sound investment climate in a country it can be done
from two perspectives:
• Macropolitical risks: This risks affect all the firms in the
country. Examples of such risks are civil wars,
terrorism, disaster etc
• Micropolitical risks: this affect only a specific firm
within a specific industry such as boycotts against
foreign products.
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27. Political Risks/Problems
1. Political instability: the political instability is the
probability that an irregular political event will
occur(eg; frequency changes of government )
2. Economic Factors: inflation, BoP, growth rate,
per capita income etc.
3. Traditional hostilities(acts of war, fighting):
Strike, highway banda, Nepal banda, Dharna,
corruption etc.
4. Terrorism: kidnaping, killing by criminal gangs,
donations, loot (banks)
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28. Political Risks/Problems
5. Labor conditions:
• Industrial unrest is rising
• Because of Union pressure 30 MNCs local factories in
terai have been closed
• SO many Join venture like Dabur have been closed
down so many times
• Padlock is common
6. Bureaucratic Hassle (trouble, complicate): Govt.
people create problem in business, asking so many docs,
taking longer time for small work, asking money and
bigger gifts corruption.
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29. Political Risks/Problems
7. Other Risks:
Other some risks are:
Intellectual property rights (IPR): copy right, patent
rights weak protection of this will create problems to
business firm.
Boycotts (reject ): Against foreign goods
Inflation, taxation, currency devaluation: wider
fluctuations and uncertainty in monetary and fiscal
policies of govt.
Sanctions: barriers in flow of trade in goods, services,
some other actions taken by Gov.
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