Scope Of Investment
The government, Investment Board of Nepal (IBN) in particular, is working in full swing to make Nepal Investment Summit 2019 scheduled for 29-30 March a success. The Summit expected to be attended by more than 700 delegates, including 500 foreigners, is going to be an important event in view of Nepal’s attempt to expedite the pace of development through the mobilisation of enough investment from home and abroad in infrastructure, agriculture, tourism, hydropower, healthcare, education and other sectors. The summit that will bring in financial and business leaders from across the world shall serve as a platform for the government to present its investment policies and showcase the projects ready for investment while the delegates will get an opportunity to understand the investment climate and search for local partners. The Board has so far identified nearly four dozen projects – 35 from government and 11 from the private sector – and expects to strike deals on about a dozen projects during the summit in the last week of this month. However, the Board needs to take caution about the outcome of the summit in view of a similar event held in March 2017. The summit then was attended by about 250 foreign investors from as many as 20 countries across the world, including Indian Finance Minister Arun Jaitley and Jin Liqun, president of Asian Infrastructure Investment Bank from China; it was considered to be an overwhelming success in terms of investment commitment of US$ 14 billion, mainly from Chinese investors in the areas of clean energy, agriculture, tourism, healthcare, education and transportation. However, only about 30 per cent of this commitment of foreign direct investment has been realised so far due to various reasons, mainly in the domestic front.
Obviously, the main reason behind low commitment of investment from the earlier summit is political instability and policy uncertainty. After a protracted political transition, Nepal promulgated a new constitution in September 2015, however that alone was not enough to reassure foreign investors to bring money into the country. We can be optimistic this time round as we have a stable government in place that has taken up development and prosperity as the primary agenda and is preparing to amend laws that discourage the investors ahead of the summit. Another reason the flow of investment was was lower than commitment is the government and the IBN were unable to present attractive projects to investors ready to bring in investments. Take an example of hydropower sector; the country holds unlimited potential in power generation, but a number of viable projects have been held by individuals or companies from home and abroad so they cannot be offered to prospective investors. As per a news report in this daily, the IBN seems to be prepared to address this issue as well as it has identified nearly four dozen projects that the prospective investors can invest in. It even expects to strike deals on a number of these projects. However, to address the problem regarding the availability of attractive projects for good, the government should either press those holding the licenses of viable projects to execute them or scrap their permits. Let’s hope the government will act firmly in this regard; the other stakeholders in the country need to cooperate with the IBN to make the summit successful.