Investment environment


In a bid to attract foreign investment in the country, the government has organized investment summit on 29-30 March. The summit was intended to showcase 77 projects of which 50 are public and the remaining 27 private. Various projects pertaining to agriculture, hydropower, tourism, urban infrastructure, hydropower and health among others are included. While it is a welcoming move to envisage a mega event of this nature to boost the economic development, a serious homework and follow up strategies need to be devised to ensure the effectiveness of such high profile gatherings that involve huge state expenditure. Such summits in the past failed to witness the commitment in terms of real investment in the absence of a strong monitoring and supervision mechanism. Two years back, Nepal hosted the investment summit in which $13. 51 billion FDI commitments were made. However, the same commitment has not been implemented.

Debate around Foreign Investment is all time high. Although a bunch of critics are against the notion of seeking foreign investment to expedite the economic activities in the nation, flow of investment and technology are difficult to control in the globalised world. Channelising such investment in realising the national development aspiration should be the road ahead to gain maximum benefit. Access to advanced technology and knowledge system including innovative practice is also a plus point with the foreign investment entering in the developing country like Nepal. Equally remarkable is the fact that foreign investment generates local employment in the Nepali economy in which the problem of unemployment is high.

Realising the urgency of spurring economic growth, the government has invited more than 600 foreign and 300 domestic delegates for the summit. In the direction of restoring the faith of the international investors, the government has amended few groundbreaking acts in the field of Foreign Investment and Public-Private Partnership namely: Foreign Investment and Technology Transfer Act, Public Private Collaboration and Investment Act, Special Economic Zone Act. A dozen of other important Acts for assuring the investor community of a friendly bureaucracy and administrative system are still pending. This is definitely a welcome move amid the report of the volume of FDI declining in the first six months of the current fiscal year. Perhaps the provision of an integrated service system to provide one-stop solution to the investors will be instrumental in the field of attracting FDI in Nepal. The recent amendment in this direction aims at conducting the activities of capital acquisition and transfer, capital mobilisation, labour reform through a single centre, one of the major demands of the foreign investors working in Nepal.

The government has given a positive message of political stability in the nation. With the recent amendments in some laws as stated above, it is trying to woo the investors in new Nepal where bureaucratic hassles will be checked. Meanwhile, the natural resource potentials of the country will also be strongly articulated along with the availability of a cheap labor force, warm and hospitable citizens in Nepal. Nevertheless, it is significant to link the investors’ priorities with our national aspirations. In this regard, a clear policy vision of tapping the foreign investment is crucial.

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