P
Prriivvaattee S
Seeccttoorr P
Prroom
moottiioonn iinn C
Coonnfflliicctt
E
Ennvviirroonnm
meennttss –– FFiirrsstt E
Exxppeerriieenncceess ffrroom
m tthhee
P
Prriivvaattee S
Seeccttoorr P
Prroom
moottiioonn P
Prroojjeecctt ((P
PS
SP
P)),,
N
Neeppaall
Authors: Armin Hofmann (GTZ Nepal), Daniel Bagwitz (GTZ Nepal) and
Helmut Grossmann (Free-lance Consultant),
Kathmandu / Frankfurt, January 2006
TTaabbllee ooff C
Coonntteennttss
Introduction_______________________________________________________________ 2
Background: The conflict between Maoist rebels and the ruling elites is fought on the poor
people’s back. ____________________________________________________________ 2
The Conflict has severely affected the private sector, thus aggravating structural problems. 3
The GTZ Private Sector Promotion Project approach: Sub sector promotion, Local Economic
Development, Chamber Support ______________________________________________ 4
The Sub-sector or Value Chain Promotion approach can be used to get a better
understanding of an on-going conflict and to design conflict transformation activities of the
private sector. _____________________________________________________________ 5
The Local Economic Development (LED) Approach is suitable for avoiding new conflicts and
for addressing the root causes of on-going conflicts ______________________________ 11
Business Promotion and Location Development in the context of LED can be adjusted to
become conflict sensitive. __________________________________________________ 14
Outlook: Private sector promotion in conflict environments has to directly benefit
disadvantaged people . ____________________________________________________ 17
Outlook: Private sector promotion in conflict environments has to win the support of larger
businesses and their organisations. ___________________________________________ 17
1
IInnttrroodduuccttiioonn
In recent years much has been published on the subject of private sector promotion
in post-conflict countries. However, very few experiences have been documented
with regard to private sector development operations in on-going conflicts. This short
paper describes how the Nepal-German Private Sector Promotion Project (PSP) tries
to address the ideology-based conflict between the government of Nepal and the
Maoist rebels. There may be a number of lessons to be learned for other similar
projects in conflicts around the world.
B
Baacckkggrroouunndd:: TThhee ccoonnfflliicctt bbeettw
weeeenn M
Maaooiisstt rreebbeellss aanndd tthhee
rruulliinngg eelliitteess iiss ffoouugghhtt oonn tthhee ppoooorr ppeeooppllee’’ss bbaacckk..
Since 1996 Nepal is facing a violent conflict between the Nepalese government and
the militant Communist Party of Nepal. The so-called Maoists (they are not supported
by the Chinese Government) aim to abolish monarchy in order to establish a
communist republic1. Today they control about 80% of rural Nepal, except the district
headquarters and the Kathmandu valley, thus effectively crippling the supply of public
services. Only selected donors, NGOs and International NGOs as well as the private
sector are in a position to operate in the Maoist-controlled areas.
The conflict has become increasingly violent: an estimated 12.000 people have
already been killed and many more people suffered from human rights violations
conducted by Maoists and the Security Forces.
The common people are trapped between the conflicting parties. Especially in rural
areas the warring parties press the population for support. As a consequence the
number of internally displaced persons increased significantly; many young people
have joined the Security Forces or the Maoist army to earn a living; others have
migrated to urban centres or left the country.
The volume of remittances from overseas workers (mostly in India, Arab countries
and in Malaysia) has jumped from USD 139 million in the year 2001 to USD 808
million in the year 2004: this accounts for almost 14% of GDP and 55.8% of total
1
However, in December 2005 the Maoists have agreed with political parties to join a democratic system.
2
foreign currency reserves. Human capital has become Nepal’s number one export.
25% of all Nepalese households receive remittances. However, very poor
households are rarely amongst those that benefit.
TThhee C
Coonnfflliicctt hhaass sseevveerreellyy aaffffeecctteedd tthhee pprriivvaattee sseeccttoorr,, tthhuuss
aaggggrraavvaattiinngg ssttrruuccttuurraall pprroobblleem
mss..
After a decade of privatisation and liberalisation the private sector has become
Nepal’s largest employment provider outside the primary sector (more than 65% of
the working population still depends on small scale agriculture and forestry). The
Nepali private sector has two distinct faces. On one side there is a small number of
larger firms in the hands of powerful business families. On the other there is a large
number of micro and small enterprises (99% of all enterprises according to UNDP
definitions) with very little power at all; many of them belong to the informal sector.
Overall, the Nepali private sector is not very well developed when compared to
Nepal’s big neighbours and competitors, China, Bangladesh and especially India.
There are many structural reasons for this slow development in the private sector.
The conflict in the country has aggravated that situation.
Many larger enterprises have been targeted by the Maoist rebels directly because
they are perceived as capitalist exploiters and part of the ruling elite. Some of the
companies have shut down or re-located their operations. Others meet the demands
of the Maoist leaders (e.g. by increasing the salaries of their workers) and pay a tax
charged by the rebels.
There is also an indirect impact on the private sector: due to frequent strikes and
curfews many enterprises lost income opportunities and faced increased costs;
oversees importers are sceptical to enter business contracts, raw material supply is
hampered and sales commitments cannot be met. As a landlocked country Nepal
heavily depends on road-transport, connecting it to the markets and ports of
Bangladesh and India. In addition, public and private investments are being delayed
due to the political uncertainty. The structural problems are not being addressed by
the public sector. Between 1999 and 2002 the number of manufacturing enterprises
is reported to have dropped from 3557 to 3213, thus decreasing the employment in
manufacturing industries by almost 3% (from 187,316 to 181,943).
3
TThhee G
GTTZZ P
Prriivvaattee S
Seeccttoorr P
Prroom
moottiioonn P
Prroojjeecctt aapppprrooaacchh:: S
Suubb
sseeccttoorr pprroom
moottiioonn,, LLooccaall E
Eccoonnoom
miicc D
Deevveellooppm
meenntt,, C
Chhaam
mbbeerr
S
Suuppppoorrtt
As mentioned above, the Maoist rebels have effectively destroyed public services in
80% of the country; only some donors, NGOs and International NGOs as well as the
private sector are in a position to implement development programmes. Since the
private sector is not party to the conflict, its structures (associations and chambers)
provide an excellent entry point to many regions and sections of the society, thus
ensuring outreach and sustainable impact. The GTZ Private Sector Promotion
Project tries to capitalise on the private sector’s organisational structures in order to
combine classic income and employment promotion with conflict transformation.
The purpose of the project is to enhance the competitiveness of Nepal’s private
sector to generate income and employment growth, by facilitating

competitiveness in selected sub sectors and value chains,

business membership organisations to provide quality services,

local economic development initiatives.
Operating from a joint project office with the Rural Finance Nepal (RUFIN) Project,
knowledge and resources both in the fields of private sector promotion and rural
finance are combined. Activities are carried out with local intermediaries in order to
transfer knowledge, improve structures and thus achieve high sustainability. The PSP
and RUFIN Projects are jointly implemented by the Governments of the Federal
Republic of Germany and His Majesties Government of Nepal.
4
TThhee S
Suubb--sseeccttoorr oorr V
Vaalluuee C
Chhaaiinn P
Prroom
moottiioonn aapppprrooaacchh ccaann bbee
uusseedd ttoo ggeett aa bbeetttteerr uunnddeerrssttaannddiinngg ooff aann oonn--ggooiinngg ccoonnfflliicctt
aanndd ttoo ddeessiiggnn ccoonnfflliicctt ttrraannssffoorrm
maattiioonn aaccttiivviittiieess ooff tthhee
pprriivvaattee sseeccttoorr..
A product (or a service) is generally created in a process linking primary producers,
input suppliers, buyers, processors, sellers and consumers in a value chain. The
value chain promotion approach attempts to optimise the value chain in such a way
that the demands of the end-consumers are fully met by harmonising value chain
actors, improving quality and productivity. This will increase the competitiveness of
the product against similar products, allow targeting niche markets and create growth
and new employment. The Private Sector Promotion Project aims at upgrading value
chains in favour of income distribution for the poor, e.g. by upgrading primary
processing according to market demand.
Typically the value chain approach follows the following sequence:
1. Identification of sub sectors and value chains to be promoted
2. Analysis and mapping of the value chains / sub sector
3. Development of an upgrading strategy
4. Implementation
5. Assessment of results
In a conflict environment the value chain promotion approach can be very useful to
identify conflict transformation opportunities and to design conflict-sensitive activities.
Conflict-relevant issues can be considered in each step of the above sequence.
C
Coonnfflliicctt--sseennssiittiivvee iiddeennttiiffiiccaattiioonn ooff vvaalluuee cchhaaiinnss
The first conflict-relevant issue to be considered is the selection of value chains
which will receive project support. Possible criteria for selecting value chains are:

Importance for the livelihood of conflict-relevant target groups (e.g. in tea
production in Eastern Nepal)

Support for conflict affected regions that provide primary inputs (e.g. herbs and
medicinal plants from the west of Nepal)
5

Relevance of the value chain for the national or local economy

Market demand and growth with regard to the products of the value chain

Competitive advantage of the value chain

Potential for employment creation within the value chain

Conducive policy environment

Donor involvement and linkages with other development projects
Based on a scoring exercise the PSP has selected six sub sectors which are
important for rural people and the economy: bamboo, honey, orthodox tea, herbs and
medicinal plants, Lokta (hand-made) paper and mandarin oranges. In addition, the
hand knotted carpets sub sector was chosen, in particular due to its importance for
employment in Nepal.
6
C
Coonnfflliicctt iissssuueess iinn tthhee aannaallyyssiiss ooff vvaalluuee cchhaaiinnss
A sub sector is typically analysed on micro, meso and macro levels and with regard
to actors and functions. The following illustration shows a simplified analysis of actors
in the Nepal Orthodox Tea Sub sector.
Figure 1: Orthodox Tea Sub Sector, Mapping of Actors
M
A
R
K
E
T
I
N
C
O
M
E
O
R
I
E
N
T
A
T
I
O
N
D
I
S
T
R
I
B
U
T
I
O
N
7
The value chain mapping exercise is typically conducted in a workshop with
stakeholders and can be extended to include a conflict analysis. Various questions
can be addressed: e.g. which actors are affected by a conflict and how they are
affected; which conflict causes exist (within the sub sector or externally); what kind of
risks actors face and how they influence or could influence the conflict. During the
workshop value chain actors can also be introduced to the subject of conflict
transformation.
The analysis of a value chain can highlight the impact of the conflict along the value
chain and assess risks of supply chains being affected. In particular, the important
role of natural resources in a conflict context can be analysed as part of any value
chain (e.g. mining, extraction of timber or non-timber forest products).
Finally, conclusions need to be drawn from the analysis for a strategy to decrease
tensions, risks and conflict affectedness.
D
Deevveellooppm
meenntt ooff aa ccoonnfflliicctt--sseennssiittiivvee vvaalluuee cchhaaiinn uuppggrraaddiinngg ssttrraatteeggyy
A strategy for upgrading a value chain should also decrease or transform conflict.
Drawing from conclusions of the analysis, objectives, milestones and activities can be
identified and prioritised. The systemic analysis conducted generally leads to a multi
track approach to conflict transformation. When designing activities a do no harm
check is recommended.
IIm
mpplleem
meennttaattiioonn ooff ccoonnfflliicctt--sseennssiittiivvee vvaalluuee cchhaaiinn uuppggrraaddiinngg
The key to conflict-sensitive value chain upgrading is dialogue and win-win
improvements.
Optimising a value chain often leads to better product quality, decreasing transaction
costs and increasing profits. This may be a good opportunity to convince business
people to invest into better working conditions for their labourers and to support skills
upgrading.
Since value chains often suffer from mistrust, lack of communication and coordination
between the actors, one “side-effect” of the participatory process is the building of
trust and cooperation for a common goal. Value chain actors may include members
of the conflicting parties.
8
The value chain approach widens the perspective of actors beyond their immediate
environment. It promotes dialogue between different regions and even with foreign
companies and buyers. This may provide an entry point for new perspectives on the
conflict and possible solutions. - Even the warring parties may change their
interference with local industries once they realise that it is generally the poor that
lose most when value chains are affected.
Value chains which address international social or ecological concerns can be used
as examples for conflict-sensitive practice (e.g. child-labour issue in the Nepali carpet
industry). This can open up avenues for market-driven improvements to the selected
industry.
The value chain approach involves larger firms and maybe even international
companies: their involvement could be an incentive for local companies to start CSR
activities. Moreover, the involvement of prominent business leaders could be used to
win them as “peace agents”.
However, facilitators of participatory value chain discussions have to bear in mind
that the negotiations between value chain actors can also create new conflicts or
increase existing conflicts, e.g. when one or a few powerful business people
dominate the others in the value chain or when people, who benefit from the status
quo, lose their advantage through the optimisation of the value chain.
A
Asssseessssm
meenntt ooff rreessuullttss
The assessment of results is done in line with the projects monitoring and evaluation
system. In order to specifically assess the conflict transformation efforts, indicators
are defined according to the objectives from the strategy. Permanent monitoring and
evaluation is essential in order to guarantee that activities have led to the desired
outputs for all parties involved. If deviations occur, another do no harm check is
advisable.
E
Exxppeerriieennccee ffrroom
m tthhee hhaanndd kknnootttteedd ccaarrppeett ssuubb sseeccttoorr
The following example from the PSP-Project in Nepal illustrates the usefulness of the
value-chain approach for conflict sensitive development and conflict transformation :
Nepal’s carpet exports in 2003/04 were valued at US$ 74 million. Nepal’s share of
the world market is around 6%. Due to international pressure a large share of the
9
carpets are produced without child labour and marketed with the “Rugmark” label to
certify the absence of child labour in the manufacturing process. The industry
contributes about 2.3% to the country’s GDP. It is very labour intensive and employs
around 300,000 people, of which around 45% are women. Over the past several
years, Nepal's carpet exports have been declining sharply due to lower demand and
increasing competition. To make things worse, the Maoist rebels have attacked
carpet manufacturers, claiming that their workers are being exploited.
The PSP-project has been promoting the carpet industry since 2001, but has only
recently started to look at the industry in a conflict-sensitive manner. Previous
support has been focused on carpet design, marketing training, visiting of fairs,
various studies and public relations as part of a trade promotion component. The
analysis of the value chain has helped to identify many new areas for intervention.
The impact of the conflict and opportunities to address some of the root causes of the
conflict in the value chain have been identified with the help of a sub sector map.
The project realized that a mere focus on the export-side of the industry does not
adequately address the conditions and causes of the conflict. The future project
support therefore has the objective to sustain and promote employment and incomes
by enhancing the competitiveness of the hand-knotted carpet sub-sector. This is in
contrast to the earlier objective which was more focused on export performance.
The project has e.g. kicked off a discussion amongst carpet manufacturers to find
ways to the pass on benefits from the sub-sector to the poor. An idea being pursued
is to shift weaving from factories in the capital to the weavers’ homes in rural areas,
for reasons of safety and convenience of the labourers. Issues of Corporate Social
Responsibility (CSR) will increasingly play a role in the project’s approach to the
industry. CSR and particularly child labour is an international concern, but it is also an
issue taken up by the Maoist rebels.
The biggest challenge for the PSP-project is to maintain and deepen the dialogue
between all stakeholders in the value chain (including the foreign buyers) so that a
common vision for the sub-sector, including conflict transformation aspects, can be
developed and pursued.
10
TThhee LLooccaall E
Eccoonnoom
miicc D
Deevveellooppm
meenntt ((LLE
ED
D)) A
Apppprrooaacchh iiss
ssuuiittaabbllee ffoorr aavvooiiddiinngg nneew
w ccoonnfflliiccttss aanndd ffoorr aaddddrreessssiinngg tthhee
rroooott ccaauusseess ooff oonn--ggooiinngg ccoonnfflliiccttss
Local Economic Development (LED) enables actors from institutions of a given
location (municipalities, local chambers etc), as well as national level bodies, to jointly
analyse competitiveness of localities and implement activities to stimulate the local
economy. The “hard core” of LED combines business promotion and business
location development, thus linking private sector promotion with regional or urban
development. The PSP-Project in Nepal found that the LED approach2 is suitable for
conflict environments because it is transparent, action-oriented and participatory,
involving all relevant stakeholders in planning, implementation and monitoring.
“Normal” LED tools can easily be adjusted to meet the requirement of “do no harm”
and to contribute to crisis prevention or conflict transformation.
The so-called PACA tool (Participatory Appraisal of Competitive Advantages) 3, which
is often used to kick off a LED process, can be very useful in the conflict context.
PACA follows the following sequence:
Figure 2 The Sequence of PACA
Source: mesopartner
2
3
Developed by mesopartner (www.paca-online.de)
PACA has been developed by mesopartner (www.paca-online.de)
11
PACA typically is facilitated and implemented by a local champion involving all
relevant stakeholders – private sector, public sector and civil society – to identify
competitive advantages and coordinate implementation. The PSP has managed to
create a “team of champions” in its pilot location Lekhnath, consisting of municipality,
chamber and a local development society that has identified competitive advantages
and implemented 18 activities in 7 sub sectors within 6 months without any
interference of Maoist separatists. By applying this participatory approach in a very
transparent way, all parties involved seem to have agreed to the benefit of LED.
Although it can not be proven, it is fairly certain that also sympathizers of the Maoist
movement have been involved and benefited of the activities, suggesting that the
dialogue during interviews and workshops can contribute to conflict transformation or
crisis prevention.
The PSP-Project considers a number of ways to make PACA conflict sensitive:
 Select disadvantaged regions or regions in conflict for LED activities, however
making sure that local actors are motivated to start a LED process.
 The local champion and the LED team should be acceptable to all conflicting
parties and neutral towards the conflict. Ideally, they already play an active role
in crisis prevention, conflict transformation or peace building.
 The entire LED and PACA process should be made transparent and public
right from the beginning. It is important that the monitoring feedback is also
made transparent and public.
 In the pre-exercise hypothesis workshop as well as during planning workshops
and during later monitoring a “do-no-harm” check should be done for each
activity.
 A “team of local champions” should ensure that no politicisation takes place
before, during or after the LED Exercise.
 Participation at workshops must be carefully considered and prepared;
otherwise there might be a risk that a workshop is hijacked. In particular kickoff and final presentation workshops should not offer a stage for agitators. The
workshops and the workshop participants should be acceptable to all
conflicting
parties.
Participants
of
the
workshops
should
include
representatives of or speakers for disadvantaged groups. Their concerns must
12
be heard (e.g. by using meso cards during exercises) but expectations should
be realistic and managed during the exercise as not every good idea can be
financed or implemented, which might lead to frustration.
 The concept of conflict-sensitive development should be presented at the kickoff workshop and again at the presentation of results and the beginning of
planning workshops.
 Conflict issues could be part of the interviews with local stakeholders (e.g.
asking entrepreneurs about the impact of the conflict on their business) and the
results should be presented during the planning workshop in a positive manner
(e.g. observed coping strategies, which could be used as further ideas for
activities).
LED facilitators have to bear in mind that dialogue between various stakeholders can
also create new conflicts or increase existing conflicts, esp. when it comes to the
investment of scarce public funds. Therefore, they should be familiar with moderation
and conflict management techniques.
13
B
Buussiinneessss P
Prroom
moottiioonn aanndd LLooccaattiioonn D
Deevveellooppm
meenntt iinn tthhee
ccoonntteexxtt ooff LLE
ED
D ccaann bbee aaddjjuusstteedd ttoo bbeeccoom
mee ccoonnfflliicctt
sseennssiittiivvee..
The target group of LED activities are firms. Typically activities for supporting firms
are, as illustrated in figure 3, concerned with direct business promotion, focusing on
existing enterprises, start-up enterprises or attracting external companies (see chart
below).
Figure 3: Activities around the target group of LED
Source: The Hexagon of LED, developed by mesopartner
Following measures can make LED business promotion more conflict-sensitive:
 Support only enterprises which apply socially responsible business practices or
are willing to do so.
 Support entrepreneurs from different social groups (or conflicting parties).
 Cooperate with business development service providers which are willing and
able to contribute to crisis prevention, conflict transformation or peace building.
14
 Include the concerns of employees and unemployed people in business
promotion activities.
 Ensure the support programme also benefits people who are in the focus of the
conflict (e.g. unemployed youth, ethnic minorities, etc.).
 Attract external companies that are willing and able to play a lead role in
corporate social responsibility (CSR).
 Link enterprises to markets or franchisers that foster social and ecological
responsibility (e.g. organic foods and fair-trade buyers in Europe).
 Support suitable business networks: e.g. promoters of CSR and conflict
transformation activities.
 Include conflict information in location-marketing to attract investors who are
willing to contribute to crisis prevention, conflict transformation or peace
building.
LED business promotion includes strengthening locational advantages, which makes
a location more attractive for entrepreneurs and employees. In this context business
promotion is combined with regional or urban, ecological and social development:
Figure 4: Strengthening location advantages
Source: The Hexagon of LED, developed by mesopartner
15
Following measures can make LED location development more conflict-sensitive:
 Since location development always affects the entire community it is essential
to identify and plan in a participatory manner and communicate any activities
very clearly on the basis of facts.
 Ensure that local resources are tapped e.g. construction and supply contracts
financed by public investment are benefiting the local economy.
 Ensure that environmental regulations, real estate development (e.g. new
industrial estates) or the upgrading of transport and communication facilities do
not create new conflicts or make existing conflicts worse (“do no harm check”):
e.g. research people’s dependency on natural resources, clarify property rights
and usage, look into potential military use of infrastructure.
 Making local government more efficient and responsive should not only benefit
entrepreneurs but all citizens.
 Improvements to housing, environment, schooling, and cultural, health and
social facilities should benefit all social groups and conflicting groups.
 Infrastructure development should employ as many local companies and
people as possible, especially from disadvantaged groups and from both
conflicting parties.
 Social and ecological problems can be turned into business and income
opportunities. However, support for such measures must consider informal
“rights” of people, esp. disadvantaged groups and conflicting parties (e.g.
establishing modern recycling systems may disadvantage traditional wastecollectors).
 Infrastructure development may be used to integrate disadvantaged groups
into mainstream society or to promote dialogue between conflicting parties: e.g.
community centres, market places, social housing programme, roads / bridges
/ public transport to remote areas.
16
O
Ouuttllooookk:: P
Prriivvaattee sseeccttoorr pprroom
moottiioonn iinn ccoonnfflliicctt eennvviirroonnm
meennttss
hhaass ttoo ddiirreeccttllyy bbeenneeffiitt ddiissaaddvvaannttaaggeedd ppeeooppllee ..
Based on their first experiences the PSP Project will focus on three aspects in future:
identifying conflict decreasing measures within value chains by mapping the chains
with a focus on conflict, ensuring quick and visible impact of all private sector
promotion measures to help disadvantaged groups and thus address the root causes
of the conflict; supporting business membership organisations in their effort to win
their members for CSR, to improve the image of the private sector and to build trust
between the private sector, public sector and the civil society; supporting the National
Business Initiative to become the lead agent for peace.
PSP has realised that private sector development in a conflict environment must
produce quick and visible impact for the poor, for people living in the conflict affected
areas and for disadvantaged groups. The former Project focus on trade promotion
was not sufficient to substantially improve the lives of these people; the Project now
looks at the entire value chain – enhancing market orientation and distribution of
income to the (rural) primary producers. Owners of larger companies are directly
encouraged by the Project to plough back some of their profits into corporate social
responsibility measures. Furthermore, the Project decided to support additional subsectors which are more directly relevant for poor and disadvantaged people (e.g.
handmade paper, bamboo, tea and herb production).
O
Ouuttllooookk:: P
Prriivvaattee sseeccttoorr pprroom
moottiioonn iinn ccoonnfflliicctt eennvviirroonnm
meennttss
hhaass ttoo w
wiinn tthhee ssuuppppoorrtt ooff llaarrggeerr bbuussiinneesssseess aanndd tthheeiirr
oorrggaanniissaattiioonnss..
Business membership organisations play an important role in local, regional and
national economic development. PSP cooperates with these organisations to
promote corporate social responsibility (CSR) amongst their members. CSR activities
must be win-win for the companies, their employees and the surrounding local
communities. PSP hopes that the public image of the private sector will thus change,
from being seen as “dividers” to being seen as a “connectors” in the conflict context.
This new image will help to build trust between the private sector, public sector and
17
the civil society. Based on this trust local, regional and national dialogue for peace
may get started.
In 2003 some courageous business leaders established the National Business
Initiative (NBI), gathering the major business membership organisations to rally for
peace and promote corporate social responsibility practices amongst their members.
At present 16 trade associations are members, including the Federation of Nepalese
Chambers of Commerce and Industries (FNCCI). Thus this organization represents
the largest union of the private sector country-wide and is a legitimized body of the
civil society, which underlines the importance of the topic "peace" for the private
sector. The NBI has its own secretariat, which organizes and coordinates the peacebuilding activities of the initiative. Through its network NBI will reach out to the formal
business community, the public sector and the civil society.
The PSP-Project supported this peace initiative from its very beginning. The overall
goal/vision is to qualify the NBI to play an active role in overcoming the national
conflict and securing peace. In the case of Nepal, the following factors make the
private sector a partner in peace-building:

the private sector in Nepal is not a party to the conflict

private sector actors enjoy access to the conflicting parties

the business community is in a position to mobilise resources to support a
peace-building process

governments, both present and future, will need to work closely with the
private sector to address economic issues

the private sector has an effective network and presence throughout the
country.
The sustainability of the NBI initiatives is ensured by the fact that the NBI members
obligated themselves to cover the costs of the initiative.
The vision of PSP is to make the private sector the leader for conflict transformation
in Nepal. One day the trust and platform created by the private sector may be
instrumental to initiate peace talks between the warring parties. Further more, the
private sector may play a crucial role in the subsequent post-conflict rehabilitation
phase.
18