Domestic investment necessary to attract FDI
Kathmandu, April 2
Minister for Industry Nabindra Raj Joshi, today, urged domestic investors to increase investment in the country citing domestic investment plays a catalytic role in attracting foreign direct investment (FDI). To realise the pledge made by foreign investors to invest in Nepal during the investment summit held last month in Capital, government has urged the private sector to support the government in this initiative.
Foreign investors are in a ‘wait and watch’ mode to invest in Nepal, so expansion of investment by local investors will also boost the confidence of foreign investors. FDI in Nepal is at a dismal 2.7 per cent of the gross domestic product worth $22.49 billion and there is huge potential of FDI flow as the government has been doing its best to resolve the legal and operational barriers for investment in the country, according to Minister Joshi.
Speaking in the first meeting of the high-level committee that was formed to resolve the barriers for investment in the aftermath of the Nepal Investment Summit, Minister Joshi urged the subcommittees — Policy Coordination Sub-committee for Foreign Investment, Foreign Investment Promotion Sub-committee and Foreign Investment Projects Coordination Sub-committee — to submit their terms of reference (ToR) within this week and the next meeting that is slated for next week will endorse the ToR submitted by them.
The high-level committee comprises of commerce minister, tourism minister, energy minister, physical infrastructure and transport minister and state minister for industry. Other members of the panel include a member of National Planning Commission who looks after the industry sector, Nepal Rastra Bank governor, finance secretary, tourism secretary, energy secretary, commerce secretary, CEO of Investment Board Nepal and presidents of Federation of Nepalese Chambers of Commerce and Industry, Confederation of Nepalese Industries and Nepal Chamber of Commerce. The committee was formed to monitor the progress made in realising the foreign investment pledged in various sectors and related to ministries like tourism, energy, commerce, among others and also to resolve various hassles through reforms in laws and policies, administration and services.
In the meeting of the high-level panel held today, senior economist Puskar Bajracharya advised the committee to screen potential investment as per the priority of the country and to follow them up and facilitate such investment to come into the country.
Private sector representatives from the three umbrella bodies highlighted the operational level challenges and have ensured the government to expand investment if the investment climate is improved. “Protection of investment and good returns are the basic requirements for every investment and the government needs to introspect on what has been done so far and what needs to be done in the future to improve the investment climate in the country,” said Pashupati Murarka, president of FNCCI. “It takes at least two years to complete ground work to set up a business and we have to be aware that every foreign investor looks at opportunity cost to set up business in Nepal and elsewhere.”
CNI President Hari Bhakta Sharma wants government to convert its pledge into action and seeks better coordination among various government agencies to facilitate investors to lure domestic and foreign investors.