Series of summits and onerous task of nation building

By Sharachchandra Bhandary

In a bid to attract Foreign Direct Investment and take forward Nepal to the path of economic prosperity, the government and Confederation of Nepali Industries separately organized two international conferences. The one hosted by the government was named ‘Nepal Investment Summit’ while the other organized at the initiation was labeled ‘Nepal Infrastructure Summit’. Growth and development of infrastructure and investment in the potential areas like hydropower and tourism is the key for economic progress. The main message of both summits was to convey to the international investors that Nepal offers plethora of opportunities for business and investment, the availability of high number of low cost human resources and liberal policies and laws ensuring conducive environment. Creating an enabling environment for business and attracting investment is top priority. To materialize it and rationalize the policies by simplifying the procedures boosts business to establish and grow. The most interesting aspects of investment is that the foreign investors are allowed 100% ownership of a company in almost all sectors. Repatriation of capital and profit is allowed, tax regime is very transparent, predictable and investor friendly. Vat imposed on production is reimbursed based on quality of exports if such goods are exported. Adoption of Industrial Enterprises Act, setting up of the Investment Board as well as Industry and Investment Promotion Board to attract, facilitate and manage FDI in areas like hydroelectric power, tourism and manufacturing are very much promising. Industries relating to tourism sector, hydroelectricity, solar, wind and bio mass energy enjoy several incentives. These fundamentals for doing business needs to be shared with international investors time and again. At the same time it is imperative to ensure industrial peace and law and order. The organizers of the both summits have claimed that they were successful in communicating the message that emerging out from a prolonged transition Nepal is ready to take-off as a major investment destination. Both summits laid emphasis on hydropower, agriculture, tourism, service sector, financial institutions, construction and infrastructure connectivity, cross-border connectivity corridors, railways and transmission lines, establishing new international airports in Bhairahwa, Pokhara and Nijgadh, upgrading of the Tribhuwan International Airport. Nepal Infrastructure Summit discussed on issues that shape incentives for investment and enable the private sector to become an indispensable ally in infrastructure-led economic growth. The Summit focused on the strategic vision of the country, policy and regulatory enablers, value proposition, competitiveness, among others. More than 450 individuals from 15 different countries participated in the Summit that suggest Government of Nepal to make a clear vision  for the infrastructure needs of the country beyond 2022 and ensure that plans, strategies and policies prepared by line ministries and departments are aligned with due inclusion of the role of private sector. It also urged the government to fine tune the regulatory framework to create a more efficient and attractive investment climate.  Provide clarity and certainty to investors on key processes in the investment and development of infrastructure projects. Nepal should endeavor to attract large FDI, improve competitiveness, pursue second generation reforms and build world class PPP environment. Nepal’s medium-term ambition to become a middle-income nation by 2030 needs huge commitments for investment in infrastructure Nepal need to devise policies to utilize the large amount of remittance that is entering the country into the productive sector like infrastructure development. Adequate investigation and feasibilities should be undertaken to ensure timely completion of the projects. Infrastructure Development Bank has to come into existence. Insolvency laws need to be revised for banks to offer non-recourse finance, the government should involve private sector while formulating new laws, bills and seek their advice. Funds allocated to Green infrastructure have been growing globally. The lack of credit rating has been pushing back Nepal in terms of prospective investors and Nepal needs to have a sovereign risk rating immediately, among others, were some of the recommendations from the private sector. The citizens of Nepal are eagerly looking forward to outcome of the summits and concrete action in implementing them in onerous task of nation building.