PESTEL Analysis of Nepal

Presented by:
Amish Dhungel
Brada Neupane
Biraj Aryal
Unnati Upadhaya
Prema Sunuwar
Suresh Mishra

PESTEL Analysis
PESTEL analysis describes a framework of macro-
environmental factors used in the environmental scanning
component of strategic management. (wiki)

The relevance of PESTEL model for a country analysis
is to audit its contemporary environment and assess
potential changes and prepare accordingly so that the
country will be better positioned than its competitors to
respond to changes.


Political Environment
Analysis of Nepal




Presented by:
Amish Dhungel
Political Environment
Analysis of Nepal
Federal Democratic Republic of Nepal
Government: Parliamentary republic
Absolute Monarchy:
1726-1950 (Shah Dynasty, unification)
Rana rule
Democracy in Nepal:
Tri-party agreement in New Delhi (1950), Dawn of Democracy
End of democratic practice in 1960 by King Mahendra
Constitutional monarchy installed on 1990 by King Birendra
Maoist insurgency from 1996 to install Republic in Nepal
Royal Massacre in 2001
Dismissal of democratic experiment in 2005 by King Gyanendra
2006 April revolution jointly by Seven party coalition together with
Maoist, reinstate of Parliament
May 8, 2008 Nepal was declared as Federal Democratic Republic


Political Environment
Analysis of Nepal
Was never colonized.
Instable government. No government since 1991 have
survived for more than two years.
23 governments over last 23 years.
Ease of doing business: 105 (World Bank)
Corruption Perception Index: 116/176(Transparency
International)
Women representation in Parliament: 33.33%
Political Environment
Analysis of Nepal
Executive power vested in government headed by Prime
minister.
Head of state is President.
Legislative power is vested in Government and the
parliament.
Independent judiciary.
Nepali congress (socialist-democracy), UML, UCPN-
Maoist as major political parties. 139 political parties
registered for 2
nd
CA election

Political Environment
Analysis of Nepal
Commission of Investigation for Abuse of Authority
(CIAA) in practice since 2007


Things are Changing
Constitution drafting on its way
Government strong commitment for optimum growth of national
production
More liberal economic policies in line to free market
Fine-tuning of monetary policy
Recognized the role of private sector
Government investment only in infrastructure
One window policy for FDI via Investment Board
Trade policies promoting exports and reducing of trade imbalance
Quantitative restriction and import licensing system abolished
Simplified export procedures
Rapid financial reforms, enabling JV Banks etc


Socio-Cultural Environment Analysis of
Nepal

Area: 147,181 sq. km. ; world's 93rd largest country by land mass and the
41st most populous country.
Located in the Himalayas and bordered to the north by of China, and to the
south, east, and west by the Republic of India.
Kathmandu is the nation's capital and largest metropolis. Renowned for its
splendid Himalayas.







Demographic status
Total Population: 26,494,504 (2011 census)
Gender distribution:
Male Composition: 49%
Female Composition: 51%
Age groups: 0-14 (39.35%
15-59 (54.15%
60+ (6.5%)
Geographical regions: Mountain: 6.73%
Hill: 43%
Terai: 50.27%
Population growth rate: 1.35

Religion: Hindu 81%, Buddhist 9%, Muslim 4.4%, Kirat 3.1%,
Christian 1.4%, other 0.5%, unspecified 0.2%
123 mother tongues, Nepali being the national language is
spoken by 44.6%.
Literacy rate:75.10%
Staple food: Rice, vegetables, lentils and pickles, dhido (
traditional food)
Class & caste structure


Deep rooted caste system still prevailing in some parts of
country
Upper class
Middle class
Lower class

Brahmin
Chhetri
Baisya and,
Sudra

Nepal is a melting pot of many races and tribes.
There are around 101 ethnic and caste groups.



The ethno-cultural groups maintain their unique life style,
language, customs, and rituals, food habits, dresses,
jewelry or ornaments and festivals.
The culture of Nepal is a assemblage of music,
architecture, religion and literature.
Music is associated with every event in Nepal, then be it
birth, marriage, festivals or national events.




Business practices are influenced by traditional values.
Any business that is conducted against the cultural values may
not sustain.
Family patronage of business is wide spread.
Modernization and growth in information technology are
helping to break cultural barriers in Nepal.
With the growing literacy rate traditional way of doing business
is being gradually replaced.
Huge impact of tradition and culture in businesses. (eg. beef
products are not allowed).
Tourism industry is highly influenced by socio structure,
culture and traditions.





89.2 percent are reported to be living in their own
dwelling units and 9.2 percent in rented dwellings
Majority (68.4 percent) of the households used wood as
fuel for cooking. Liquefied Petroleum Gas (LPG) use
was 12.3 percent
(25.4 percent) of households has a modern flushing toilet
and 23.4 percent have an ordinary toilet.
(28.3) percent have a mobile phone, 9.8 percent have a
fixed line telephone and 3.1 percent have a computer
Socio-Cultural facts
Median age of country's population: 21.6 years
People of all ages living with HIV (thousands) 2012,
estimate 49,000
Crude fertility rate: 2.4
Urbanized Population: 17.3 %
School enrollment rate: 135% (highest in South Asia)
Life expectancy at birth: 68 (highest in South Asia)





TECHNOLOGICAL
ENVIRONMENT Analysis of Nepal

A SHORT HISTORY OF
SCIENCE AND TECHNOLOGY
Modern science entered with the introduction of
intermediate science education in Tri Chandra College in
1919.
Bachelors of science : Tri Chandra College, 1948
Masters of Science : Tribhuwan University, 1965
Institutions of Medicines, Engineering, Forestry,
Agriculture :TU, 1973
The 6
th
Five Year Plan(1980-1985), linked science and
technology activities with economic development
National Council of Science and Technology (NCST),
1976, now dismantled









Foreign Investment and Technology Transfer Act, 1992
(FITTA):
FITTA governs all matters relating to foreign investment and
technology transfer. This act states provision regarding
settlement of disputes related to investment among the
stakeholders.

It also clarifies the potential are where foreign investment
and technology transfer can be made. Similarly it also states
mentions the area where foreign involvement is restricted.
Like: cottage industry, arms industries, motion pictures
business, security printing etc.

Science and Technology Policy, 2005
It focuses on Infrastructure development, human resource
development, R & D, etc. Furthermore it vision to build Nepal as
a developed, dynamic and prosperous state by raising the living
standards through the appropriate development and use of science
and technology.

National Policy on Technical Education and Vocational
Education, 1999
Information Technology Policy, 2002

Research Centre for Applied Science and Technology
(RECAST), 1977
Nepal Academy of Science and Technology (NAST), 1982
Ministry of Science and Technology, 1995
B.P. Koirala Institute of Health Science
National Academy of Medical Sciences, Bir Hospital
National Agriculture Research Centre, 1991
Department of Forest Survey and Research, 1963
Department of Irrigation, Hydrology and Meteorology, 1967
Department of Plant Resources, 1957

TECHNOLOGY OF NEPAL AT GLANCE
RADIO
Government Owned FM- 1 (Radio Nepal)
Private Owned FM- 50
NEWSPAPER
Number of National Daily- 14
Government- Gorkhapatra and The Rising Nepal
Private- Kantipur Daily, THT, TKP
Number of Weekly Newspaper-15




TELEVISION
Commenced in 1985 with Nepal Television
Government- 2 (Nepali TV and NTV Plus)
Private- 20 (Most preferred are Kantipur, Image Channel,
Avenues)

TELECOMMUNICATION
As per 15
th
July 2013
Population-26,494,504
User population-21,332,275 (80.51%)





PENETRATION RATIO

71.46%
3.21%
5.84%
MOBILE
FIXED LANDLINE
OTHERS
Market Share of Major
Players
49%
43%
4%
3%
1%
Column1
NCELL
NTC
Smart tel
UTL
Others
INTERNET USERS IN NEPAL- 26.1%
94%
3%
2%
1%
0%
0%
Column1
GPRS
CDMA
ADSL
WIRELESS
CABLE MODEM
WIMAX
STATUS OF TRADITIONAL
TECHNOLOGY
Rich in many traditional technologies
Dominant in rural areas
Nepal possesses good technical know-how of traditional technologies
in the following fields-
1. Metallurgy, pottery
2. Architecture and construction
3. Textile manufacture, dyeing and printing
4. Paper manufacture
5. Food technology
6. Agriculture and water management
7. Medicines
STATUS OF MODERN
TECHNOLOGY IN NEPALESE
INDUSTRY
Commencement of modern technology in Nepal
from 1936 through Biratnagar Jute Mills
Second World War led to establishment of sugar,
match, cotton, plywood, and cigarette industries.
Most declined after the war.
The current status is indicated by the following
scenario-
1. Growing use of modern technology
2. Skill base for modern technology
3. R and D spending
4. Transfer of technology
INFORMATION TECHNOLOGY IN
NEPAL
Low R and D for traditional technologies: Nepal
spends .34 % of GDP in Science and
Technological based research.
Entered internet revolution in 1993 when
Mercantile Office Systems introduced e-mail
services
Enacted Electronic Transaction Act, 2007
Japan , World Bank, China, Switzerland, Britain, Australia etc.
have been major donor of technological equipment to Nepal.

Uses of information technology in Nepal
Information Management
Planning and control
E-commerce
E-education
E-banking
Ecological Environment of
Nepal








5.1 Natural/Geographical profile of Nepal:
Physical profile
Mineral Resources
Flora and Fauna
Water resources
Agriculture
5.2 Ecological Factors Impacting Business:
Physical inputs
Transportation
Communication
Availability of Labor forces
Energy availability and Cost
5.3 Impact of Business on Ecology:
Waste materials disposal
Ecological consequences



Outline of Presentation:

Natural/Geographical profile of
Nepal
Physical profile
Area: 147, 181 Sq. km
Seasons and Temperature
Geographical Regions of Nepal

Geographical division of
Nepal
Himalayan
Hilly
Terai
Geographical
Regions
Percentage (%)
Himalayan
Region
15
Hilly 68
Terai 17

Natural/Geographical profile of
Nepal
Mineral Resources
Flora and Fauna
Water resources
Agriculture

Ecological Factors Impacting
Business:
Physical inputs
Transportation
Communication
Availability of Labor forces
Energy availability and Cost

Impact of Business on Ecology:

Waste materials disposal
Ecological consequences


Legal Environment Analysis
of Nepal

Legal
environment of
business
Court s of law

Business laws
Law administrators
Legal regulations
.
Partnership Act, 1964
If two or more person want to establish a firm to initiate
business, partnership firm can be registered.
Firm can be registered under Department of Commerce
(in Kathmandu valley) and Office of the Cottage and
Small Industries ( in outside the valley ) with the
recommendation letter of Chambers of Commerce.
Tax law is applicable and the firm should be renewed
each five years where the firm has been registered.

Private Firm Registration Act, 1958 (2014)
Recommendation letter is required from the Chambers of
Commerce or District branch of FNCCI to register the Private
Firm.
The license is issued for five years and should be renewed
after that period.
Trading business are registered under this act.


Company Act ,2006
The company must be incorporated in office of register
according to law.
It must include two to seven member
The MOA and AOA guides the operation of overall
company .


Labour related legislation

Labour Act,1992

Employment and job security, firing of employee
Working hours
Remuneration and yearly pay increment
Health and safety
Welfare provision
Bonus Act ,1974
The bonus shall not exceed ten percent of net profit
The amount of bonus to an individual will depend on the
amount of monthly salaries and wages paid
Mines and Minerals Act, 1985
(2042)

All mineral products found inside the Nepal are the property of Government of
Nepal.

These are classified in two category Metal and Non Metal

Right to extraction of mineral product is with government. Permission can be
given to the private company as per their qualification and previous experience.

License shall be issued for a year and can be renewed. Government can cancel the
license if found the licensee doesn't work as per the law.