It is a fact that compared to a big multinational company, a Nepali diaspora investor is going to be smaller in monetary value. But if approached well, the collective investment from the diaspora community can be substantial
The agenda of FDI is not a new topic for Nepal. The government's past initiatives, broadly speaking, have delivered some degree of success in terms of number of investors and amount of investment. The government and relevant stakeholders' focus until now seems mainly to be about promoting Nepal as an attractive destination for foreign investors.
In its efforts to attract FDI, the Nepal government continues to overlook one key stakeholder that is potentially a major investor group. The missing piece of the puzzle is the members of the global Nepali diaspora – those individuals living across the world who are of Nepali origin and have adopted foreign nationality.
How can those who have left Nepal permanently and have adopted foreign nationality be a major investor in Nepal? The answer to that question is that members of Nepali diaspora have vested interests to act in the interest of Nepal and Nepali citizens. It is human nature that people are motivated when they have vested interests. This is even more so when it comes to making financial decisions. Personal reasons aside, the most important vested interest of the Nepali diaspora is the strong connection to their homeland.
Let's do some simple maths. According to the latest census figures, there are over 2.2 million Nepalis residing overseas. In addition, there is a growing number of second generation of global Nepali, i.e., born overseas to Nepali parents. If one out of one hundred from those 2.2 million Nepalis residing overseas invested in Nepal, that would be 22,000 individual investors. If one person invested Rs 1 million, that would be Rs 22 billion, or approximately $200 million.
Through this article we propose a framework of FDI in Nepal from its global diaspora –One Nepali, One Investment, One Employment. The idea is that one member of the global Nepali diaspora makes a commitment to invest in one enterprise and generates one full time employment opportunity in Nepal. The individual investor is responsible and accountable towards their investment commitment.
To get to a stage of achieving a healthy scale of FDI from the current state of only a few, we have a long way to go. To reach the destination via our framework, both the demand side (Nepal) and the supply side (diaspora) have to row their boat in the same direction. Both sides must be willing to explore and work towards finding practical solutions about how to ease the existing barriers.
The next right step for the government is to clearly acknowledge its diaspora community as a key strategic partner in its pool of potential foreign investors. Once such clear intention has been established at the higher level, the diplomatic missions present in each country must be the driver of ground work required at each country level to achieve tangible results.
There are a few key aspects of Nepali diaspora investors that are worthwhile to outline. It is a fact that compared to a big multinational company, a Nepali diaspora investor is going to be smaller in monetary value. In our view, we have to consider a bigger picture rather than judging on the basis of monetary value of a single diaspora investor. If approached well, the collective investment from the diaspora community can be substantial.
The question we should be asking is how many multinationals have invested in Nepal so far since it opened its FDI doors to them? How many more are likely to be added? How does that compare with the potential investment from the diaspora Nepali?
The diaspora community, in their countries of residence, have held many discussions about investing in Nepal. A few investments, such as those in hydropower, materialised in the past. However, the investment growth is far from satisfactory. The challenge before the diaspora Nepali now is to walk the talk rather than keep repeating the same talk. Globally there is a substantial number of diaspora members who are successful entrepreneurs albeit involved mostly in small and medium enterprises. However, the diaspora community is hardly visible when it comes to business and economic activities in their adopted country as well as that in Nepal. If they are willing, what is stopping every member of the diaspora community to assume the role of an ambassador to direct investment in Nepal?
As the saying the devil is in the details goes, the seriously interested investors from the Nepali diaspora must start delving down to the finer level of implementing their intention to invest in Nepal. The first and the foremost role they can play is to start having conversations about investing in Nepal with other like-minded fellow members. They must seek ways to materialise their individual and collective intention to invest in Nepal. The diaspora community must actively lobby through their diplomatic missions to raise their voice and profile about their interest to invest in Nepal. Equally importantly, how to enable FDI from the Nepali diaspora must be one of the key performance indicators of our diplomatic missions.
An attractive proposition for a multinational company might not necessarily be so for a diaspora investor. Both sides (Nepal and diaspora) must identify what is it that makes it a mutually attractive deal. One size fits all approach is not going to work. We would need to identify the nuanced reasons that would enable an investment environment and encourage both sides to find a win-win situation.
Our framework of 'One Nepali, One Investment, One Employment' discussed in this article could be a powerful vehicle to minimise the existing gaps in materialising FDI in Nepal from its diaspora community.
Let the conversation begin.
Kharel is President, Australia Nepal Chamber of Commerce, info@innovativeassociates.com.au, and Maharjan is President, New Zealand Nepal Chamber of Commerce, rajm@isolutionsnz.com
