EDITORIAL: Vexed expats

The government must take up the issue of visas for expats’ spouses seriously and try to resolve it in double quick time

An investment-friendly environment, apart from guarantee of returns on investments, is a must to lure foreign investment. And on the eve of the Nepal Investment Summit held earlier this year on March 29-30, the government went all out to introduce the Foreign Investment and Technology Transfer Act (FITTA) in a bid to woo the maximum number of investors to Nepal. However, the act, introduced in haste without holding broad consultations with the stakeholders, has certain ambiguities that tend to vex expatriates living in Nepal. One such vexation has to do with the difficulty of bringing their spouses to Nepal. Officials at the Department of Industry acknowledge that quite few expats have already lodged complaints demanding simplification of the procedures that would allow their spouses to get visas easily. The existing provision could discourage skilled workers from coming to Nepal while also hindering the flow of foreign capital into the country. Despite the complaints, it seems there is little the Foreign Investment and Technology Transfer Section at the Department of Industry can do as it requires an amendment to the act itself, which will have to wait until the House of Representatives sits for the winter session.

FITTA repealed the Foreign Investment and Transfer of Technology Act 1992 to bring reform in the foreign investment regime in Nepal. FITTA was passed together with the Public Private Partnership Investment Act 2019, with the former designed for the safe repatriation of profits, and the latter for facilitation of investments in the country. The government had also introduced or amended a number of other laws aimed at attracting foreign investment in the country. They included the Industrial Enterprises Act and Special Economic Zone Act, among others. One of the features of FITTA is that it has provisioned a One-Stop Service Mechanism, which came into operation just weeks after the Nepal Investment Summit 2019, where the government had guaranteed “world class treatment, facilitation and service to investors”. What the one-stop service means to the investors, both Nepali and foreign, is that they will no longer have to visit different government agencies located at different places for registration, approval and other administration clearances to set up a business in the country. The centre has brought altogether 14 different government agencies involved in approving investments at one place. Their offices represent immigration, customs, labour, the central bank, environment ministry and industry ministry.

The government cannot, however, sit back in a complacent manner thinking it has done enough by introducing or amending laws to attract FDI. True, Nepal Investment Summit 2019 was a grand success, with both Nepali and foreign investors committing almost US$ 17.5 billion in various projects. However, how much of that pledge will be realised will depend on the working environment in Nepal. Even a small irritant could impede the flow of capital to this country. The government must take up the issue related to visas for expats’ spouses seriously and try to resolve it in double quick time.

Act swiftly

Banke district is facing a severe shortage of construction materials, such as stones, boulders and sand, leading to delay in construction of infrastructure projects. One of the major projects affected by lack of riverbed materials is Sikta Irrigation, a national pride project. This is not the first time construction of projects, considered crucial to stimulate economic growth, has been hit by a shortage of river-based resources. Earlier, the developer of Gautam Buddha International Airport faced the same problem, leading to months of delay in project construction. If this problem continues to recur, Nepal can never bridge the huge infrastructure gap required to put the economy on a higher growth trajectory.

It is, therefore, high time the federal government coordinated with the provincial and local governments to address this issue. Local governments must take the lead to resolve this problem, as they are the authorised body to provide permits to extract riverbed materials. Banke is facing a shortage of river-based resources because of delay made by Raptisonari Rural Municipality to award the contract. As a result, river-borne materials are being illegally excavated. This can cause serious harm to the environment. Local governments should take note of these repercussions and act swiftly.