COMPONENTS OF MULTI-NATIONAL ENVIRONMENT

Nepal has certain areas for industrial sector like jute, herbs, medicine and tourism. All these are home product and highly demand in foreign country. Also internal raw materials are available in Nepal for export business. So we can see that there are still many opportunities for foreign investment. Similarly there are manufacturing industries such as cement, textile, rubber, iron, wood, paper and chemical where investment has still more opportunity to invest and promote Multinational Corporation. Therefore it is clear that Nepal has still more areas for Multinational Corporation and FDI to regulate effectively.

Government, law, regulation, and policies of Nepal

The government and the Nepal Rastra Bank make use of the various fiscal and monetary weapons respectively. These weapons are used to influence and regulate the behavior of the various classes of spender as savers, consumers, and investors. In the early nineties, notable progress was made.

The bank has been formulating and publicly announcing monetary policy on an annual basis since 2002/03 with the major objectives of maintaining price stability and external as well as financial sector stability and to create a favorable environment for high and sustainable economic growth as directed by NRB Act, 2002. In this economic and financial background, the monetary policy for 2011/12 has been made public where the necessary adjustments in direction, targets and instruments of monetary policy has been made on analyzing internal as well as external economic outlook.

Monetary policy in Nepal is quiet effective for the business house. It refers to all the actions of the central bank regulated by Nepal Rastra Bank which affects directly or indirectly the supply of money, rate of interest and credit banking system. It seeks to regulate foreign rate and exchange rate to give out foreign monetary result. This policy has introduced export duty drawbacks with bonded warehouse facility and made openness to general licensing. Also monetary policy has allowed Non Representative Nepal (NRN) to open dollar account in Nepal so that Foreign Direct Investment (FDI) can be promoted. Nepalese law has protected the property of FDI along with repatriation of capital. The profit earned by foreigners is taken as full remittance to foreign country. Which means the profit earned by foreign investment is allowed to take all the money to foreign country. Nepalese policy allows guaranteed security of foreign investment and efficient service to foreigner. Also this policy has adapted antitrust law which kills monopoly business in specific areas.

Key political and legal parameters of Nepal

At present, three principle parties are engaged in political competition. They are the Nepali Congress (NC), the Communist Party of Nepal-Unified Merxist Leninist (CPN-UML) and Nepal Communist Party (Maoist). There are other parties, formed before and after the historic People’s Movement of 2006.

There is important Act that has been enacted in Nepal are

i.                    Interim constitution of Nepal

ii.                  Nepal Electricity Act,1993

iii.                Road Broad Act,2001

iv.                Industrial Enterprise Act

v.                  Foreign Investment and Technology Transfer Act,1996

vi.                Labor Act, 1992 and so on.

vii.              Public Procurement Act

Key economic parameter and their projection

Nepal’s per capita income is one of the lowest in the world. Income distribution is the significantly influenced by disparities in the distribution of assets and income/earning. The Gross Domestic Product per capita in Nepal was last recorded at 409.04 US dollars in 2013. The GDP per Capita in Nepal is equivalent to 3 percent of the world's average. GDP per capita in Nepal averaged 243.66 USD from 1960 until 2013, reaching an all time high of 409.04 USD in 2013 and a record low of 177.77 USD in 1960. GDP per capita in Nepal is reported by the World Bank.

The population of the country is increasing at the rate of 1.81 %.The average annual percent change in the population, resulting from a surplus (or deficit) of births over deaths and the balance of migrants entering and leaving a country. The rate may be positive or negative. The growth rate is a factor in determining how great a burden would be imposed on a country by the changing needs of its people for infrastructure (e.g., schools, hospitals, housing, roads), resources (e.g., food, water, electricity), and jobs.

The table below showing the percentage of male and female according to the age group.

Age Group	Male	Female	Percent
0-14	5045989	4859274	32.60%
15-24	3444438	3431127	22.60%
25-54	5015145	5594248	34.9%
55-64	820014	860439	5.5%
65 and above	630853	729750	4.5%

The government has initiated several economic reforms to liberalize the economy. These reforms program includes trade liberalization, incentives for foreign direct investment, privatization and decentralization.

The possible areas of Foreign Direct Investment such as:

·         Commercial Banks

·         Hydro Power Project

·         Finance Company

·         Insurance Company

·         Hotel and Tourism Industry

·         Nursing Home

·         Education Institution and

·         Construction Industry

Social and cultural parameter and projection    

The socio- cultural environment has considerable influence in the business firm. Nepal is a country with diversity in religion, language and traditions. People have different attitude and beliefs about different work related issues. As per the 2011 census, 123 languages are spoken in Nepal. Nepal's linguistic heritage has evolved from three major language groups: Indo-Aryan, Tibeto-Burman, and indigenous.

The major languages of Nepal (percent spoken as mother tongue) are Nepali (44.6%), Maithili (11.7%), Bhojpuri (6%), Tharu (5.8%), Tamang (5.1%), Nepal Bhasa (3.2%), Magar (3%) and Bajjika (3%).

Summary and Conclusion

            As Nepal is one of the developing countries that have opportunity for Multinational Corporation to operate. The only problem is the current situation of instability of Government and different Political Parties. As Nepal is also one of the Democratic countries to have opportunity for business and commerce. Strategy must be applied in shifting from Agricultural to Non-Agricultural business. And as per the labor data large numbers of people are currently working in informal sector so these practices must be changed. Government must provide security for investor to invest and FDI policy must be beneficial to both foreigner and host country so that it can be regulated effectively. Only then Nepal will have opportunity for Multinational Corporation and country development

References

Pearce II, J. A. & Robinson, R. B. (2011). Strategic Management: Formulation, Implementation, and Control. (12th ed.). New York, NY: McGraw-Hill.

Robinson B. Richard &MitalAsmita (2012), Strategic Management Formulation, Implementation and Control (12thedition). 7 West Patel Nagar, New Delhi: Tata McGraw Hill Education.