According to the findings of the survey that was made public amid a function on Thursday, 62 percent of the surveyed enterprises representing manufacturing, retails, and logistic services pinpointed political instability as the most important obstacle in their business.[break]
Similarly, 27 percent identified power shortage as the most major obstacle, while only 3 percent pointed labor regulations as the most severe problem. Likewise, transportation and corruption were other serious barriers for entrepreneurship in Nepal.
"Nepal is worse than other competitor countries in South Asia region in terms of electricity and transportation. However, Nepal´s tax rates and tax administration, labor skill level, functioning of court and business licensing procedures are better than other countries," stated the report prepared by Gabi G Afram, the senior financial economist of The World Bank.
The survey found that transport and electricity were particularly problematic for tourism sector while labor regulation was the major obstacle for manufacturing sector. More than half of the large industries pinpointed labor regulation as the major problem. Similarly, informal competition is especially challenging the development service sector, the report stated.
The survey has also reckoned the blunt of power shortage on manufacturing sector and said that 26 percent sales are lost due to lack of power whereas it is around 11 percent for South Asia.
According to the survey, just 38 percent of firms have line of credit with financial institutions whereas such ratios for Bhutan and Bangladesh are around 49 percent and 59 percent respectively.
The survey also found that very few manufacturing firms in Nepal offer formal training to improve the skill of their workforce, resulting in the lowest labor productivity. Only 34 percent of the total workforce of even the large firms gets formal training, according to the survey.
On the participation of workers in trade union, the survey has found that about 47 percent of workers are affiliated with trade unions but half of them maintained that they had never participated in trade union activities.
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