Even those whom I thought were very close to me were against me in the election. The likes of Neer Shah, Vijay Shah and Kishor Khanal, who had always stood up for me in the past, supported the rival camp. Suraj Baidya, a friend, publicly campaigned for Padma Jyoti while Mahesh Lal planned his election strategy behind closed doors.
The election fever was unprecedented. It was not just the entrepreneurs, the media and the political parties too were actively involved in it for the first time in the federation’s history. The CPN-UML supported Jyoti. The Nepali Congress was divided, though its influential leader Arjun Nursing K.C. backed me. The election set a bad precedent at the FNCCI, as the political parties have played a decisive role in all its elections ever since. The parties even issued a directive to their supporters in the district chapters to vote only for those candidates whom the parties had formally endorsed. I do not entirely blame the politicians for this. They, naturally, will exploit entrepreneurs to achieve their goals. Far more deplorable is that support for federation candidates is traded for money in some of the economically backward districts.
By 1996, the entire private sector was divided, politically as well as communally.
Despite the stiff competition, most of the members of my faction were elected. I too was hopeful of reclaiming the top post. On the day the election result was to be announced, I left home in the morning fully prepared to reassume the position of president. The AGM was being held at Blue Star Hotel. As my car entered the gates of the hotel, some of my friends signalled to me to stop.
‘What is the matter?’ I asked, rolling down the window.
‘Please don’t go into the hotel now,’ one of them said. Pointing to Hotel Sita, a few blocks away, he added, ‘Let’s go there first.’
My heart sank. I reversed the car, which was halfway across the Blue Star entrance, and headed to Hotel Sita, where our election office was located. As soon as I stepped out, some of my friends led me by hand into the office. They were holding an emergency meeting.
I had lost the election.
‘Binod Babu, you must go now to Blue Star Hotel,’ someone said. When I heard this, I was actually shaking.
According to the federation’s statute, the outgoing president must welcome the president-elect in person; he must personally remove the federation pin from the lapel of his coat and pin it on the president-elect’s coat. Any defeat is painful, but marking one’s own defeat in this way was especially painful.
Following this defeat, I started searching for a candidate for the next election who could transform my defeat into a victory.
Ananda Raj Mulmi was the strong leader of the Pokhara chapter of the federation. He had backed me during my unopposed election to the presidency in the past. I thought that if I could make him president, it would serve two purposes: the Kathmandu businessmen’s plot to defeat me in order to share the top post among themselves on a rotational basis would be foiled; and the leadership of the federation would be handed over for the first time to an entrepreneur from outside the capital.
I proposed Mulmi as our official candidate. Chiranjivi Nidhi Tiwari was pitted against Mulmi and had the support of tycoons like Padma Jyoti, Mahesh Lal Pradhan, Pradip Kumar Shrestha, Suraj Baidya, the Golchhas and Madanlal Chiranjeelal. On the other hand, my friends who had backed Padma Jyoti, had returned to my camp. Those disgruntled with the federation leadership too backed us. We had set up our publicity office at the same venue—Hotel Sita. We relentlessly canvassed for Mulmi across the country. I always stood beside him throughout the campaign.
Mulmi won the election.
I now wanted to keep myself away from the politics of organizations representing the private sector. However, politics kept following me. The creation of the Confederation of Nepalese Industries was the next step.
Founding the CNI
The formation of the CNI traces back to the Nepal–India Trade Treaty.
The treaty, which was signed in 1996, triggered a wave of industrialization in Nepal as it exempted certain goods produced in Nepal from customs duty. Many joint venture companies with well-known corporations were established. Exports to India rose meteorically.
Within a few years of the treaty coming into effect, the India side started to allege that some Nepali companies were circumventing its provisions by exporting products such as hydrogenated vegetable oil, copper wire, zinc oxide and acrylic yarns duty-free, when these items were outside the range of finished products envisaged by the treaty. Notwithstanding the fact that these products constituted only a negligible proportion of the industrial GDP of Nepal, the Indian side wanted to review the treaty. Some state governments in India actively argued that the treaty should be repealed. Neither the Government of Nepal nor the private sector could raise their voice against them.
In the wake of India’s wavering stance on the treaty, some industrial entrepreneurs in Nepal held a meeting at Everest Hotel in Kathmandu to discuss the matter. They were particularly disgruntled with the FNCCI for failing to champion the cause of Nepali industries. All the participating entrepreneurs stressed the need for a ‘think tank’ to address the concerns of the Nepali private sector.
It was this gathering that decided to create the CNI.
The FNCCI took strong exception to the formation of the CNI. They charged us with setting up a parallel institution to avenge my electoral defeat. We were accused of ‘fracturing the unity of entrepreneurs’ by forming the CNI, despite the fact that Padma Jyoti, Suraj Baidya and Jagadish Agrawal had already planned to form a parallel organization after Mulmi won the election at the FNCCI. They had already drafted the statute for that organization. We prepared the CNI’s statute by effecting minor changes to that draft.
The federation officials then took competition to an unhealthy extreme by trying to block the registration of the CNI. Even Prime Minister Sher Bahadur Deuba supported them. Due to relentless pressure from the FNCCI and from the government itself, we were unable to register the CNI for almost a year. Finally, we came up with an idea. While all attention was focused on the district administration office of Kathmandu to block our move, we quietly got the CNI registered by the district administration office of the neighbouring district of Lalitpur. Once an organization is registered, even the government cannot scrap it without solid reasons.
The FNCCI president, Ravi Bhakta Shrestha, and the office, bearers even published a public notice in the media to oppose the institution of the CNI. Ravi Bhakta is a close friend of mine now. We are partners in United Insurance Company. He acknowledges that the FNCCI tried to block the formation of the CNI during his tenure as president.
Despite the obstacles in its early days, the CNI, over the span of a decade, grew to the level of the FNCCI as a private sector umbrella body. Media organizations strongly supported us in this cause. The reputation I had earned as president of the FNCCI, the goodwill towards me among high-ranking government officials, and the support from many national and international quarters, also proved helpful.
We have always thought and acted with the nation’s interests at heart. Whether it was the Economic Summit aimed at raising the monthly salary of every Nepali citizen to at least Rs 12,000, or the Partnership Summit inviting the former Malaysian prime minister Mahathir Mohamad to chalk out an economic strategy for Nepal, we have always given the topmost priority to economic agendas. The CNI has played an important role in drafting legislations pertaining to SEZs, the investment board and new industrial policies. Today, the CNI has its own modern secretariat. It earns more than it spends and is rapidly expanding its base.
It is not that we have never collaborated with the FNCCI, but we will always stand up for our rights.
The Maoist trouble
Industrialist Shashikant Agrawal loved getting together with friends. Some of us would meet at the Saino Restaurant at Durbar Marg in downtown Kathmandu three to four times a week at his invitation. Also invited were diplomats, high-ranking government officials and even prominent media personalitie
s. These gatherings were distinctive for our frank discussions on current affairs.
During one of these gatherings in March 2007, the FNCCI president of the time, Chandi Dhakal, broke the news that trade unionists affiliated with the Maoists had physically attacked the owner of Woodland Hotel in Durbar Marg.
I was shocked to hear this. Shashikant Agrawal, Bhusan Dahal of Kantipur Television, Prakash Shrestha, chairperson of the Hotel Association of Nepal, and a few other friends were also present. We all knew the owner of Woodland Hotel personally, and were also aware that workers affiliated with the Maoist party had been harassing him for some time.
Though the Maoist party had joined peaceful, mainstream politics, many of their cadres were yet to mend their ways. A strike at the hotel had turned violent, with the owner brutally attacked.
‘This is a serious offence. Hari Shresthajee is critically injured,’ Chandi said. ‘He’s been admitted to the emergency ward of Bir Hospital.’
We rushed to the hospital.
Shrestha was writhing in pain. His body was badly bruised, his face bloodied and bloated. He could hardly see or talk. His clothes were torn. His loved ones, who were attending him, were indescribably distressed.
I brooded for a while, and then my blood started to boil. What was this? I thought. Why was a hard-working man who employed hundreds of people bashed so mercilessly by his own employees? Did they see physical violence as the only way to protest their grievances? Was no one safe from such attacks? If this could happen to a man like Hari Shrestha, how safe would the general public feel in the wake of this attack? And why would any entrepreneur want to invest here?
The image of Hari Shrestha lying bloodied and bruised in the chaotic environment of Bir Hospital seemed to symbolize not just the status of entrepreneurs and professionals but also that of the ordinary people of Nepal in those days of political transition. We were fooling ourselves with false assurances and sympathy for the emerging power. Weary of the drawn-out conflict in the country, we accepted any agent of change as an agent of good. We did not want to see the slyness and insincerity of those who were claiming to transform the country.
The sly do not understand the language of tears. The only emotion they understand is fury.
Chandi and I issued a strongly worded condemnation of the attack from the hospital itself. The next day, we decided to stage a protest by gathering most of the entrepreneurs and professionals available in the capital. Our plan was to hand over a letter of protest to the government demanding security and to caution the state against any recurrence of such an incident.
The next morning, we all gathered at Hari Shrestha’s residence at Durbar Marg to console his family and express our solidarity with them. Many friends from the FNCCI and the CNI turned up.
Suddenly, someone broke the news that a mob of Maoists was heading towards Shrestha’s house to attack us.
We immediately called up the home minister and some senior police for help, but they refused to take us seriously. This left us with only two choices: to run for cover or to stand our ground and face them. We chose the latter.
In a while, we heard the news that the Maoist cadres who were planning to attack us had decided to turn back.
This averted danger for the time being. Nonetheless, it was important to let the Maoists know we had not been intimidated. Garment entrepreneur Prashanta Pokharel took my arm and urged me to sit down in the middle of the road. I did as bid. Chandi followed suit. One by one, all the attendees from the FNCCI and the CNI sat down too.
Vehicular traffic ground to a halt as we blocked the road. A large crowd started to gather, joining us, encouraging us to continue our protest. We then decided to march to the official residence of the prime minister at Baluwatar. Girija Prasad Koirala was the prime minister. We marched to Baluwatar, chanting slogans against the Maoists’ atrocities. News of the protest led by the two umbrella bodies of the private sector spread like wildfire across the country. Entrepreneurs, professionals and ordinary people alike rushed to join our march from all over the city. An unprecedented crowd gathered outside Gate Number 3 of the prime minister’s residence.
We sought an appointment with the prime minister to discuss our concerns, but he refused to meet us. We were told he was occupied with some urgent work. This left us even more outraged. We decided to hold a press conference right there in front of Gate Number 3. I do not know who arranged for the chairs and microphones in such a brief span of time. Some two dozen journalists also instantly appeared for the press conference.
We organized a mass assembly of industrial entrepreneurs and professional organizations at Basantapur Durbar Square in downtown Kathmandu the next day to protest the growing anarchy and lawlessness in the country. The government, realizing how angry and determined we were, finally woke up. We were invited for talks.
The two top Maoist leaders, chairperson Pushpa ‘Prachanda’ Kamal Dahal and his deputy, Dr Baburam Bhattarai, were at Mahendranagar at the time. Prachandajee telephoned us from there. ‘Don’t step up your agitation. We’ll discuss the matter once we return to Kathmandu,’ he told us.
We were sick and tired of their false assurances and false amiability. The attack on Hari Shrestha was the trigger that ignited our pent-up anger and resentment against the Maoists who had been attacking the private sector for a long time.
‘Fine. We’re ready for dialogue but not for closed-door negotiations,’ we told him. ‘The talks must be held in public.’ They cut short their stay in Mahendranagar and returned to Kathmandu the next day. We met at Radisson Hotel. Many news channels streamed the meeting live. The top Maoist leaders attended, and some leaders of the UML too. All of them committed to stopping the attacks on the private sector.
The ruling seven-party alliance and the Maoists then went on to issue a written commitment to industrial security. The Maoists also moved out of Surya Carpet Industry, which they had captured some time earlier.
Certificate of Origin row
A festering battle between the CNI and the FNCCI over the issue of Certificate of Origin (COO) eventually took a political form.
A COO is a document used in international trade attesting that a product is wholly produced in a particular country using local raw materials. The ministry of commerce had authorized the FNCCI to issue these certificates, but had not enacted the decision. Previously, only the Nepal Chamber of Commerce used to issue COOs.
When we, the officials of the CNI, first approached the government in 2002 to authorize us to issue COOs, Mahesh Lal Pradhan, then minister for industry and commerce, would not lend us an ear. Later, the ministry tried to address the matter by facilitating talks between us and the FNCCI, which only meant procrastination. Many years later, after Chandi Dhakal became president of the FNCCI, we reached a kind of understanding. They agreed to share the revenue collected through the issuance of COOs. The FNCCI levies Rs 12 per Rs 100 of exportable products as a service charge, which works out to Rs 6 crore annually. But, as they did not honour the agreement, we decided the CNI would issue COOs on its own. The customs office, however, would not accept our certificates.
I then approached the ministry of finance. ‘Show me the law that bars the CNI from issuing COOs and I will stop issuing them immediately,’ I told them. They could not cite any law. Customs started to accept the documents we issued.
Once, an export consignment was stuck in Kolkata because the Indian authorities declined to recognize the COO issued by us. Kolkata is the largest port of foreign trade for landlocked Nepal. I urged the commerce secretary to telephone our consulate general in Kolkata. The matter was settled once he discussed the matter with the Indian authorities. We were now an agency authorized to issue the COO.
The FNCCI did not like this at all. It lobbied the ministry against us. But the commerce minister, Rajendra Mahato, supported us. ‘I’m not going to take away the CNI’s rights,’ he told them. However, under growing pressure from the FNCCI, the government, through a Cabinet meeting, came up wi
th what it saw as a compromise. It directed the FNCCI to give Rs 1.3 for every COO issued by it to the CNI. This amounted to Rs 50 lakh to 60 lakh a year. In exchange, we would stop issuing COOs. We kept our part of the bargain, but instead of sharing the revenue as the Cabinet had suggested, the FNCCI sent us a letter stating it would provide only 25 percent of the Rs 1.3 per COO.
I was outraged. I convened a press conference at the ministry of commerce itself. Minister Mahato was also present.
‘The FNCCI has disobeyed an order from the government,’ I said.
‘We told them what our decision was,’ Mahato replied. ‘Why don’t you take it up with the FNCCI?’
I raised my voice.
‘An order from the government has been blatantly disregarded,’ I said. ‘But instead of doing something about that, you’re asking us to settle the matter directly with the FNCCI? Is that federation greater than the state?’
This was back in April 2010. Following this high-voltage drama, the commerce ministry reviewed its previous decision on 21 May 2010 authorizing the CNI, the Chamber of Commerce and Trade and the Export Promotion Centre, besides the FNCCI, to issue COOs.
This was a big victory in the CNI’s fight for its rights against the FNCCI.
PART III: REBIRTH
10
The Turning Point
The first turning point in my professional life was my contact with Kiran Sherchan while I was studying for the Intermediate Certificate of Commerce at Saraswoti Campus in Kathmandu.
Making It Big Page 22