Red-tape, corruption, dilly-dallying and rent-seeking mentality are the major problems the potential investors often face
The Nepal Investment Summit concluded on Saturday with 17 investors applying for 16 projects. The government and the private sector had showcased 77 projects, which encompassed energy, tourism, agriculture and finance, to name a few. More investors are expected to apply for other projects by April 20, the deadline set by the Nepal Investment Board (NIB). Chaudhary Group has seen the largest number of joint ventures, which has applied for a solar power plant, 5G mobile network service and a multi-model logistics park. Non-Resident Nepali Association also agreed to set up a fund of Rs 10 billion to be utilised in the project proposed by IBN. Another hallmark of the summit was the signing of a commitment letter for financing the 900MW Arun III Hydropower Project, being developed by India-owned Sutlej Jal Vidyut Nigam. Most of the projects are related to the energy sector. Investors showed interest in Nepal’s untapped energy sector after the Indian government relaxed its regulations, related to export of energy from Nepal to India, Bangladesh and Myanmar, that allows the use of its transmission lines.
The government is upbeat about converting the pledge of foreign direct investment (FDI) into reality. Maha Prasad Adhikari, CEO of IBN, has said his office would set up an efficient follow-up mechanism on the agreements reached with the investors and others who will also propose investments in other projects in the weeks to come. The summit, the third of its kind since 1992, was held after successfully holding the elections for the three tiers of government, which have given stable governments at the centre, provinces and local levels, enacting law related to Social Security Scheme that has ensured labour-employer relations, and various laws related to FDI.
The government had showcased projects worth more than Rs 3 trillion targeting the summit. However, it has received a pledge of around Rs 1.7 trillion in investments. It could go up by the time IBN reaches deals with other viable investors within the deadline. However, the main question is whether the FDI will come to the country as pledged by the foreign investors. When the second investment summit was held in 2017, foreign investors had also pledged to pour in money worth Rs 1.4 trillion in the productive sector. But only a fraction of the pledged amount came to Nepal. Foreign Investment and Technology Transfer Act, Private Partnership and Investment Act and Special Economic Zone (amended) have now been amended to attract FDI. These laws should pave the way for attracting more investments in the areas identified by the government and the private sector. However, the most important question that lies ahead is whether Nepal’s bureaucracy will cooperate with the political leadership. Red-tape, corruption, dilly-dallying and rent-seeking mentality are the major problems the potential investors often face while getting the legal documents cleared for FDI from the concerned agencies. One of the drawbacks of the summit was that no major investors showed up from the USA and Europe. The investment summit was also top heavy with infrastructure projects, and it would have been better to give due priority to setting up manufacturing units to substitute the import bills.
It was natural for the students, sitting for the ongoing Secondary Education Examination (SEE) in province 2, to take to the streets on Saturday, following the government’s decision to put off the exams after the question papers were leaked on the social media. The government has decided to delay the SEE in the province till April 4 after question papers in Science and Social Studies were leaked on Thursday and Friday. The demonstrations turned quite nasty, with students and police officers injured in clashes after the former resorted to violence.
This is not the first time question papers have been leaked. Exams have had to be cancelled in the past after questions became known prior to the exams. Questions are leaked either for monetary gain or because someone is into mischief. Whatever the reason, the students suffer and so do their guardians. Printing a new set of questions also means a drain on the government resources. An investigation team is in Janakpur, and in no way should the culprit be allowed to walk away with a light sentence so as to deter such incidents from recurring.
A version of this article appears in print on April 01, 2019 of The Himalayan Times.