Binod Chaudhary, Nepal’s only billionaire, made his name selling instant noodles, but has now got an eye on running the young Himalayan republic.
Chaudhary, recently valued by Forbes magazine at US$1 billion, says he would give up business for a shot at governing one of the world’s poorest countries, but not yet. Nepal’s politics are just too messy, even for a man who was able to build a business empire during a civil war.
Wedged between two of the world’s largest markets — India and China — and home to its most spectacular mountains, Nepal should be a manufacturing, tourism and trading success.
Chaudhary is testament to the possibilities. Having started out selling noodles to India, then all over Asia, his family-owned conglomerate Chaudhaury Group includes a bank, a telecommunications business and dozens of resorts, including two in the Maldives in partnership with India’s Taj Group.
Yet Nepal is one of Asia’s most unstable countries, despite seven years of peace since the end of a Maoist war that helped topple a centuries-old monarchy. It has had five governments since 2008 and politicians have not been able to agree on a constitution that will lay out the contours of the state.
Elections due on Nov. 19 for a new Nepalese Constituent Assembly are expected to go ahead despite threatened disruption by a significant faction of hardline Maoist parties.
That is too soon for Chaudhary, who wants the political parties to finish writing a new constitution before he takes the plunge into full-time politics.
“There is no point in getting caught in between in a situation that you can’t resolve,” he said from the top floor of his headquarters in Kathmandu.
The tycoon, whose mansion is decorated with leopard-print furnishings, busts of black stallions and a fresco reproduction of Giovanni Battista Tiepolo’s The Banquet of Cleopatra, said he would like to jump squarely into politics when the impasse is resolved.
Chaudhary said he would then apply his business acumen to create jobs and fix infrastructure, ending power cuts that keep the lights off for up to seven hours a day.
Chaudhary does business from Thailand to Tanzania, a hedge against the uncertainties of his landlocked country.
Amid the political churning, hundreds of thousands of people leave for jobs overseas every year and businessmen are wary of investing. Growth slumped last year to 3.5 percent — the slowest pace in five years — and inflation was above target at 9 percent.
With successive short-lived governments barely in power long enough to fill posts, there has been little clarity on what type of economic system the country will follow.
“Every six months you have a new prime minister, a new government, so how can people invest?” said Chiranjeevi Nepal, the Nepalese Ministry of Finance’s top economic advisor. “Whether to follow the liberal, open economy or the mixed economy, that is the confusion here. Investment needs clear policies.”
Nowhere is that confusion more apparent than at the Nepal Stock Exchange (NEPSE).
Located in a squat, brick building by a rubbish-strewn stream, the NEPSE feels a long way from Wall Street. Its hoarding is hand-painted, its electronic ticker blank since it broke five months ago.
Inside is an abandoned trading floor, frozen in time since the exchange replaced open-outcry trading in 2007. Rows of dust-covered computers remain, as do the prices from the last day of trading, scrawled on white boards.
Nepal’s stock exchange is state-owned and, since 2007, decisionmaking by the government has been slow. Without government permission, the exchange’s employees cannot dispose of old equipment, or introduce new technology.
The NEPSE uses an electronic trading system, but is one of the last in the world to settle trades manually, with brokers exchanging paper receipts and certificates at the end of trading.
“We sent a proposal to the government five years ago to privatize the exchange,” NEPSE deputy manager Shambhu Panta said. “There has been no response... There is no stable government. No decisions are taken.”
The NEPSE’s 50 registered brokers trade an average of US$1.5 million a day, up from about US$700,000 last year.
This reflects Nepal’s economic potential and hopes that the elections will bring stability, Panta said.
The benchmark index touched a record 1,175 points in 2008, but bottomed out at 292 last year after the country’s first constituent assembly collapsed. It has since recovered to 541.
“When people think the politicians will agree on a constitution, the index rises,” Panta said. “When the politicians fight, it falls.”
On that basis, the market might be heading lower. No party is expected to emerge strong enough from the elections to resolve a fight over how much power to give local governments.
In a sign of the volatility leading up to the vote, gunmen on a motorcycle shot a candidate on Friday last week. The man died on Thursday.
Billionaire Chaudhary worries that Maoist splinter groups threatening protests will clash with troops or scare off voters, undermining the election’s legitimacy.
Nepal’s most successful capitalist is already dabbling in politics via a long association with the Communist Party of Nepal (Unified Marxist Leninist), which is these days seen as a center-left party. He was a member of the constituent assembly until it collapsed last year and said he will campaign for the party in these elections.
“I’m a political animal, I’m very much part of it,” he said.
Chaudhary offered Pakistani Prime Minister Nawaz Sharif and former Thai prime minister Thaksin Shinawatra as examples of businessmen-turned-politicians.
“It’s going to be a very important decision for me. I would not like to wear two hats, I’d have to completely give up my current position and current role and involvement in business and then I’d have to work 100 percent full time with the single objective of transforming this country economically,” he said.