Nepali business bodies warn arrests of entrepreneurs discourage private sector

KATHMANDU: Major Nepali business bodies have warned that recent arrests and detentions of entrepreneurs are discouraging the private sector.

Federation of Nepalese Chambers of Commerce and Industry (FNCCI), Confederation of Nepalese Industries (CNI), and Nepal Chamber of Commerce (NCC) issued a joint statement saying the actions come when the sector expected stability and a favourable investment climate after the formation of a new government.

The organisations warned that creating an atmosphere of fear could have severe consequences for the national economy, employment and infrastructure development. They noted that the private sector currently contributes 81% to the economy and 86% to employment.

On legal procedures, the statement emphasised the need for reform in how businesspeople are handled following regulatory reports. "We seriously urge the government to adopt a perspective and practice of first hearing the case and only detaining individuals after an economic offence has been proven," the organisations said.

Private sector representatives expressed disappointment that arrests are being made even when entrepreneurs have declared their full readiness to assist investigations and appear when summoned by police. They cautioned that such measures do not just affect individuals but deliver a serious blow to millions of jobs, the supply chain and the banking sector.

The statement also pointed to a contradiction in government actions. While the Council of Ministers recently passed a strategy for the protection and promotion of private sector, the ongoing arrests have made the community suspicious. "We once again draw attention to the fact that such arrests of entrepreneurs may push the economy into a deep crisis," the joint statement noted.

The private sector clarified that it has no disagreement with punishing guilty individuals after a crime is proven, but urged the government to respect the constitutional right to live with dignity and the legal provision that no one is considered an offender until proven guilty.

Concluding the statement, the business bodies called on the government to maintain a business-friendly environment and said they want investors to feel safe and continue increasing investment during the current government's tenure, reiterating that national prosperity depends on private sector investment and entrepreneurial enthusiasm.