Time to Take a Peek at Nepal Please

"For many climbers, Mount Everest is usually a one-time
deal" — Gordon Janow.

For most people, Nepal is associated with a one-brand deal:
Mount Everest. Even for most Indians-who incidentally are the only nationals
who don't need a visa to enter Nepal-the country conjures up images of
mountains, peaks, valleys, Gurkhas, Sherpas, and casinos. Few Indians, or anyone
else, would associate Nepal with information technology.

That's exactly the perception that the Nepal government would
like to change. Early this year, the Computer Association of Nepal (CAN) held
its biggest-ever IT exposition and conference, in Kathmandu, that drew a record
300,000 attendees. It featured Intel Corp as a conference sponsor. The chief
guest was Dr Guennadi Fedorov, head of the ICT Policy Section of the United
Nations' Economic and Social Commission for Asia and the Pacific (UNESCAP).

"Do you know there are 75 software development companies in
Nepal and about 1,000 training institutes?" Biplav Man Singh, chairman of
CAN, told me at the conference. "The IT market in Nepal was worth about $60
mn in 2004-up from $35 mn in 2002. It is small right now, but the potential is
huge."

That's the point. The industry is nascent but the potential is
worth noting for three key reasons:

• One, the Nepal government, which is the country's biggest
  user of IT, is working with the government of South Korea and the Asian
  Development Bank to draw up a master plan to help develop the country's
  ICT infrastructure.

• Two, the vice chairman of the High Level Commission for IT,
  Saroj Devkota (the Prime Minister is the chairman) is in a hurry to get IT
  to Nepal's remote, far-flung villages. "If ICT companies and other
  stakeholders can extend technology to our villages, it would develop the
  possibilities of e-learning, distant education, e-commerce, tele-medicine
  and open university," Mr Devkota said at the conference.

• Three, in mid January, Nepal's Maoist rebels laid down
  their weapons and joined other parties in Parliament after a decade of civil
  war. Maoist leader Prachanda said his party's so-called "People's
  Government and People's Court" has been dissolved. That brings a new
  hope for both people and businesses to begin to flourish with fresh hope.

Nepal, with a population of 28.3 mn people, has only 200,000
Internet users as of now. It is thus not in the same league as Vietnam and Sri
Lanka yet. Vietnam (pop 85 mn, Internet users 13 mn) is the new Asean tiger that's
attracting hundreds of millions of dollars in manufacturing and infrastructure
development. Sri Lanka (pop 21 mn, Internet users 280,000) is laying the red
carpet for European companies that want to set up call centers and offshore
software projects at the Colombo Free Trade Zone. Nepal is not yet an
"emerging tiger" as the new emerging economies are being billed.

However, if the peace process sticks, Nepal might well compete
for investment dollars with Cambodia (pop 14 mn, Internet users 44,000) or Laos
(pop 6.5 mn, Internet users 30,000). It would be wise of Indian firms to take a
closer look at Nepal, when it is just about getting serious to boom. Of Nepal's
$823 mn in exports, about 50% goes to India. Both India and China share long
borders with the landlocked Nepal. The five-year India-Nepal Trade Treaty
expires on March 5 this year and should be up for renewal. This time India
should renew it with ICT in mind.

Unlike climbing Mount Everest, laying investment roots in Nepal
cannot be a one-time deal. Investors who get there now will reap the fruits once
the Nepal tiger begins to roar.

Raju Chellam

The writer, a former Dataquest editor, is currently vice president
(Asia-Pacific) with Access Markets International (AMI) Partners, based in
Singapore. He can be reached at maildqindia@cybermedia.co.in