By Our Reporter
The two-day Investment Summit that concluded Saturday resulted to be fruitful as different foreign companies pledged an investment worth $13.51 billion in different sectors of Nepal.
Several companies from six countries– China, Bangladesh, Japan, the United Kingdom, Sri Lanka and India expressed their commitment to invest in Nepal. In the Summit attended by over 250 representatives from over 20 countries, the Chinese investors topped the chart in terms of the pledged amount.
Six Chinese companies have shown interest to invest Rs. 830 billion rupees in hydropower, metro rail, airport, highways, mining, tunnel and hospital. However, India looked reluctant in investing in Nepal as India pledged the least amount of investment of Rs. 317 million in bank, solar, steel plant and tourism. The pledged Indian amount was far less than the investment pledged by Chinese and Bangladeshi companies.
Of the six Chinese companies, China Machinery Corporation alone pledged an investment of more than Rs 300 billion in hydropower, hospital and metro rail. The second highest amount of investment was committed by Bangladesh in food and construction industries. Likewise, Japan and the United Kingdom each pledged an investment of Rs 1 billion while Sri Lanka expressed its readyness to invest Rs 500 million. In the Summit, Nepalese investors pledged Rs. 11.5 million.
The whopping amount of investment pledged by the Chinese companies in Nepal is likely to be a headache for India, as India has been informally expressing its ire against the increasing Chinese investment in Nepal over the years.
If the government manages to lure the pledged investment, it will be a great help for Nepal in accelerating development process in Nepal. However, the past experiences show that Nepalese authorities often become helpless before the elements that harass the investors. Also there are several legal and other hurdles which discourage the foreign investment.
Moreover, political instability coupled with the power centric politics will not favour foreign investments. Some political parties act at the direction of their Indian masters while others use their cadres to extort the investors and disturb works by resorting to strike and padlocking. As such, the government needs to be tough enough to control all the activities that spoil the investment environment in order to ensure that the pledged investment will be properly come into effect. If the government manages to create a suitable environment for the investors to bring in all amount they have pledged, it will indeed be a big leap in the development of infrastructure in Nepal.
Political instability, corrupt practices and poor law and order have been the biggest problems facing Nepal in luring foreign direct investment (FDI). The violence unleashed by the Maoists in the past and the protracted political transition coupled with the disturbed social harmony, especially in the southern plain before and immediately after the promulgation of the new constitution, have spoiled the investment environment.
Considering the fact that many of the industries set up in the assistance of the friendly countries were shut down due to disputes between the industries and their labourers, the government should ensure that such unwanted situation will not occur.