The Ministry of Industry is holding the Nepal Investment Summit 2017 on March 2-3, in Kathmandu. MoI believes that the two-day summit will be able to harness the investment potential of the country and help lure foreign investment. It is also optimistic that the summit will be a landmark event to develop a positive perception among potential investors willing to invest in the country. Sujan Dhungana of The Himalayan Times spoke to Nabindra Raj Joshi, Minister for Industry, about the summit, its goals and government’s preparations. Excerpts:

How are the preparations for Nepal Investment Summit going?

We are ready to host the summit in a successful manner. We aim to make the Nepal Investment Summit a milestone event in the country’s history not only to draw large scale foreign investment, but also to convey the message of improved investment climate in Nepal to potential investors around the globe. We have received huge positive response from around the world for the summit. More than 250 investors and experts from almost 24 nations like India, China, United States, Australia, Japan, Turkey, Sri Lanka, Singapore, Russia, United Kingdom, Finland, South Korea and Vietnam, among others have confirmed their participation in the summit. Moreover, renowned figures like Arun Jaitley, finance minister of India, and Jin Liqun, president of Asian Infrastructure Investment Bank, and heads of different development partners working in Nepal will be gracing the event. Similarly, more than 300 domestic investors have confirmed their participation. Things have changed for the better in Nepal after the promulgation of the constitution and all development stakeholders have been prioritising economic agenda over others. Thus, the time has arrived to harness investment opportunities in the country by exploring potential sectors and projects of investment. MoI is committed to make Nepal Infrastructure Summit a mega event as well as a game-changing programme to harness and encourage investment in Nepal.

Investment environment in Nepal is often questioned by investors citing political instability, unfriendly policies and procedural delays. What do you have to say on this?

Yes, investors often have expressed their concerns on these issues and their concerns are logical to some extent. Nepal was entangled in a web of political instability in the past, which affected the entire development sector. Similarly, different government policies at present are decades-old and do not match with the current investment and development context. However, things are changing today in the country. As I mentioned earlier, Nepal today has developed strong political and government commitment for development, which is a key factor to expedite development activities. Moreover, the new constitution has given high priority to economic prosperity of the country. Similarly, the government has been reforming the old policies and is attempting to make policies and laws that are friendly to investors and industries. For instance, we now have Special Economic Zone Act that promotes export-oriented industries and Industrial Enterprise Act that has provided different subsidies to industries. Similarly, the new Company Act, which is in the offing ensures easy entry, operation and exit of any industry operating in Nepal. The Company Act will be endorsed from the Parliament before the summit. Putting all these things in a package, it certainly shows that Nepal is slowly developing an investment friendly environment. We want to convey this message to participants during the summit. While reforming our policies, we have also tried to address the procedural hurdles in investment and establishment of industry as much as possible. We have already introduced ‘one window’ policy for industries established in SEZ and the new Company Act also has similar policy for other industries.

However, the government has not been able to endorse the new Foreign Investment and Technology Transfer Act, which is crucial to address foreign investment issues. Is this not a major setback when attempting to draw foreign investment in the country?

Undoubtedly, FITTA is crucial to attract foreign investment in the country as it regulates the entire foreign investment in Nepal. MoI worked hard to get this policy endorsed from the Parliament before the summit as we had already developed a draft of the act. However, it could not happen as the draft had to be sent to different line ministries and stakeholders for feedback. Though we could not endorse FITTA from the Parliament before the summit, MoI is working to pass FITTA at least from the Cabinet before the summit begins. Though we are yet to introduce FITTA and other laws like Intellectual Property Rights Act, we will inform participants during the summit on different provisions that the drafts of these laws envision.

What are the projects that MoI will showcase to potential investors in the summit?

Energy, agriculture, manufacturing, transportation, mines and minerals, tourism and information and communication technology, among others are the potential sectors for investment in Nepal. MoI and Investment Board Nepal (IBN) have jointly developed eight different investment viable projects in these sectors, which will be promoted among investors in the summit. These projects include foreign investment in railways, hydropower projects, international airports, tunnel highways, among others. IBN has also developed sectoral profile of different investment potential sectors in the country, which includes investment opportunities in these sectors and legal investment framework of the government. The sectoral profile, which will be distributed to participants, will make it easier for investors to decide on their investment.

MoI has an ambitious target to draw foreign investment commitment of at least $1 billion at the summit. Do you feel it is achievable?

The target is quite achievable and I expect the summit to draw investment commitment as per the target. Foreign investors today are in a ‘wait and see’ mode to invest in Nepal. If we are able to convince them that we have favourable investment policies and support from the government for projects with foreign investment, they will certainly come to Nepal. Holding the summit is an attempt to convince foreign investors by informing them of major changes that Nepal has made in the last few years. I personally believe that the government also should make our embassies located in various countries active to bring foreign investment in Nepal. The government should give our embassies an annual investment target that these embassies should bring in Nepal from those nations.

Though the government and private sector host such summits, the country has not been able to materialise commitments made at such events by foreign investors. Why is it so and what has MoI planned to do to turn those commitments into actual investments?

It is a fact that we receive investment pledges but the actual investment is negligible. This is because we do not have the trend of following up on those commitments. However, MoI this time will continuously follow up on all outcomes of the Nepal Investment Summit including the investment commitment. We will form four separate committees under MoI, Ministry of Finance, IBN and National Planning Commission to constantly follow up on all decisions, commitments and results of the summit. These committees will have to submit the progress report of the outcomes of the summit to MoI time and again. With this, MoI believes that the Nepal Investment Summit will leave a huge positive impact on Nepal’s investment climate.