The government’s plan to set up three Special Economic Zones (SEZs) in Nuwakot, Birgunj, and Panchkhal respectively will no doubt help speed up Nepal’s industrial process provided the plan is actually implemented. To attract investors, both domestic as well as foreign, the government is offering them incentives such as 100 per cent tax rebate and VAT exemption for the entreprises that are set up within the SEZ and whose products are 90 per cent export-oriented. Though the construction cost stands at a whopping four billion rupees, the project cannot be realised without the assistance of India, China and Japan, among others.

Successive governments in the past years have done nothing more than harping on the advantages of a one-window policy to attract more investors but the effectiveness of a policy is known by its implementation. The talk of simplifying the procedures for regional as well as other international investors has hardly moved beyond that level. This should not happen again. Half-hearted measures will do no good. On the contrary, Nepal’s political and economic climate is deteriorating. Most of the industries, including the garment, carpet and tourism industries have either pulled the shutters down or are reported sick. SEZs can surely help Nepal produce high-quality, competitive and cost-effective goods, keeping in mind a market-oriented approach to expand the export base. This project also has the potential of creating skilled manpower and hence the much-needed employment opportunities. Instead of crying over Nepal’s landlocked condition, the policy-makers should at least try to emulate the successes of next-door neighbours, viz. India and China. Both are operating SEZs with gusto through special policies, flexible measures and a special economic management system. But the key to making a difference is the political will. Nepal too will have to change track in the globalised context.