By Mohan Das Manandhar & Rojan Bajracharya
It is undisputed that a number of important developments that occurred in the political sphere of Nepal in the past few years have affected the national economy and businesses alike. Particularly, after the declaration of Republic Nepal, it has become necessary to understand the customs, ethos and ways of doing business in the new political setup. It is natural that the business communities are and should be dynamic to readjust themselves with regime change otherwise an economy like Nepal would stall for once and for all.

It will take some time for this dynamism to take pace and develop new commercial culture and statebusiness relationship. However, it is important to recognize at the outset how the business communities pledge their common interest to the state in view of their common interest guiding the future commercial culture and state-business relationship. One of the important components of market dynamism and competitiveness is the business communities ability to bring forward their collective interest and the state's readiness to address these interests.

Before Nepal was declared a republic, there were three major actors in the economic affairs of Nepal: the political parties, the monarchy and the traditional capitalist classes. We won't be doing any justice to two traditional capitalist classes  the Newars and the Marwaris  if we say that these communities favoured the former king during his direct rule. However, we can't deny the fact that the rulers and their kin who represented the state during the former king's direct rule are another traditional capitalist class of the country; and that these three capitalist classes needed to join hands for their common interest.

This article doesn't intend to explore what issues held them together and what separated them. We presume that all these three capitalist classes did share a common business interest, but the Newars and the Marwaris were always aware that it would be useless to have a conflicting interest as the third capitalist class (the royals) had the blessings of the state. So, the Newars and the Marwaris felt the need to build strategic ties with the political parties to defend their interests that were different from the common interest. The political parties, in turn, needed these traditional capitalists to support their movement for republicanism.

However, the problem was that some skeptics inside the political parties thought the Newars and the Marwaris had stronger ties with the royals, and were therefore on the king's side. The king and the royalties on the other hand conceived that they could not operate the entire business and commercial activities of the country by themselves. The two traditional capitalists enjoyed an established commercial network which was the important pillar of the country's economy at that point of time. The triangular relationship between these three actors during the King's direct rule was intricate. The king and the political parties provided patronage to the traditional capitalists for their own political interests and harmonized relationship with the other two actors.

Going further back in history, after the 1990 political transformation, the country entered into an era of democratic electoral practice. The absolute monarch was brought under the constitution and the political parties were handed the executive powers of the state. Now the state was represented by two distinct political forces the king and the political parties. Soon, these two forces were confronting with each other. An opposition political force, the Maoists, even launched an armed uprising against the constitutional monarchical dispensation.

Later, former king Gyanendra seized the executive powers on February 1, 2005. It showed that though the political parties were assigned the executive role, the king could still afford to become authoritarian. Interestingly, it was also the period of a change in the economic regime from a closed, import-substitution economy to a liberal economy.

In this article, what we have presumed is that the state during the former king's direct rule had conceived the need of economic liberalization in the country. It got continued with time. With economic liberalization, new business opportunities emerged in the country and so did the new capitalist classes. Gradually, a new breed of aspiring capitalists also started to get engaged in trade and commercial activities giving birth to new capitalist classes in the country. It is certain that, with the latest political change, business ventures of the former king's relatives became more transparent. They have the benefit of being tagged as general public in theory but are enjoying the blessings of the state in practice. The capitalist classes also started to tag political affiliations for their mutual benefit which is but natural.

However, the relationships of the capitalist classes with the former king and the political parties still remain harmonized in nature. Further, few new capitalists also emerged due to nurturing by political parties or by virtue of being the relatives of the leaders of these political parties. It was but natural in any new democratic country, at least in South Asia. It is not unusual that the relationship of this capitalist class with the political parties is similar to that of the king and his relatives' capitalist class. So the capitalist class close to the political parties and the one close to the king became competitors in the market and both had had the state's blessings to further their business.

The common interests of both the traditional and the new capitalist classes are the same. This has resulted into business associations in various capacities and the strengthening of the institutional capacity of old associations : This developed formal channels to liaison the common interests of the business communities with the state. On the other hand, the traditional Newar and Marwari capitalist classes are blessed with its own strong, wellestablished conventional network. It is important to note here that this traditional network still guides the commercial culture and the way of doing business informally. So we must presume that there must have been a timely adjustment in the conventional network of the Newars and the Marwaris.

After the declaration of the Republic Nepal, the state is represented by the political parties. So it is natural that the capitalist class siding with the political parties has better ground to grow, again with the blessings of the state. For the time being, we have to accept that the capitalist class close to the former king doesn't enjoy such blessings at par. But they have the experience of doing business with all other capitalist classes. There are traditional Newar and Marwari capitalist classes blessed with well established conventional network and commercial culture. And the fourth capitalist class is the one which has evolved in the last one decade due to new market opportunities.

Obviously, all these capitalist classes would stand together for their common business interests but each of them has its own self-interest and are, therefore, skeptic about each other at times. It is certain that business associations are working together as building blocks to get united for their common interests and distinct identity. However, the challenge is to build unity with diversity.

(Manandharm and Bajracharya are freelance researchers.)