Nepal Investment Summit 2019: Learning from Past Experience

Nepal Investment Summit 2019: Learning from Past Experience

The summit will also be an opportunity to share information and exchange national and international experiences on investment.

By Dr. Prabin Manandhar March 27, 2019, 11:15 a.m.

The government is organizing a second investment summit on March 29-30, 2019 in a bid to promote Nepal as an attractive destination for foreign investment by welcoming over 600 investors from 40 countries. Under the motto, “Prosperous Nepal, Happy Nepali', the summit will attract foreign investment (FDI) for physical infrastructure and industries based on energy, information and communications technology, tourism, agriculture and forestry. The summit will also be an opportunity to share information and exchange national and international experiences on investment.

The government has been implementing a number of policy reforms to facilitate business, and promote a competitive investment climate and create a range of investment opportunities in all seven provinces of Nepal.

The government had hosted the first investment summit in March 2017. The summit had secured investment pledges worth US$ 13.74 billion. However, most of the pledges were not materialized. Foreign investors are still skeptical.

What lessons have we learned from past experience? What we need to insure beyond policy reforms in the changed context? How do we address governance issues beyond technical fixing of FDI?

Some of my views are:

• We need to solidify coherent national policy, strategy and programs to address underlying causes of poverty and inequality, and employment and economy for all. FDI should be part of such national economic drive.
• Centralized federalism is constraining development, and will do so for FDI. We need to break centralization and ensure political will for devolution of authority and resources. The political leadership must be clear about the distinction between the national issues and needs, and provincial and local issues and needs.
• We need to bring improvement in inter-departmental coordination at the federal level and facilitate business by easing procedural details (business registration and licensing, user-friendly business manual, working visa, fund transfer etc).
• We need to ensure consistent enforce-ability of the law at federal, provincial and local governments. Trade unions must be managed by political parties in a way that supports rights of the labor as well as it facilitates enabling business environment for FDI.
• We should have functional complaints handling and dispute resolution mechanism to help settle disputes between investor and the host government, between the investor and employees, as well as between the two governments.
• We should strictly ban frequent strikes that threaten business, markets and normal life of people. We should ensure safety and security of investment with a provision for compensation to investors if their investments suffer losses owing to war, armed conflict and state of emergency.
• We should ensure that FDI promotes self-reliance on long-term basis with the optimum mobilization of youths, transfer of technology, and combining of foreign and local investments.

People have suffered a lot in the name of politics in Nepal. Now, people want less politics and more economic development. The current political disputes amongst political parties is not a good sign of quality politics to contribute to political stability and economic development in Nepal. Let us not politicize extremism in the name of religion, caste or ethnicity.

The political parties should rise above win-lose attitudes and work together on national agendas for development, international relations and foreign investment. They should exercise a culture of tolerance and cooperation on major issues, and more important, political parties must exercise financial transparency within them.