Govt should not compete with the private sector: FM

Kathmandu, Sept. 11

The government cannot and should not compete with the private sector, Finance Minister Dr. Yuba Raj Khatiwada said on Wednesday. 

"It is only the private sector that we are bringing into infrastructure development. The government wants greater cooperation with the private businesses in this sector," he said while addressing the Nepal Infrastructure Summit 2019 that started on Wednesday in the capital. 

"I invite the private sector to infrastructure development. Due to social and political liabilities the government is facing finance gap," he added. 

Dr. Khatiwada said that the government had to pay attention to 30 plus fundamental rights for citizens, as mentioned in the Constitution, most of which were related to social sectors, including job, water, education and environment. 

At the same time, there is an immediate fiscal gap in the newly implemented federal structure, he added.  

Likewise, 55 - 60 per cent investment of the whole Sustainable Development Goals (SDGs) is in infrastructure like physical, industrial, energy, urban development and water. 

"We can trust the private sector in developing hydroelectricity and transmission projects which is the job of the government so far. It will create a win-win situation for both the public and private sectors," said Dr. Khatiwada. 

He urged the foreign investors to invest in Nepal as the country had secure investment and environment with high return. "Any international company that invested in Nepal has not earned less than 25 per cent return which is higher than any other market around the globe," he said. 

With policy improvements, process simplification in registering business and repatriation, Nepal has become even better destination for Foreign Direct Investment (FDI), said Dr. Khatiwada. The government has recently launched one-stop service centre for the investors and announced policy for hedge funds to share the risks with the private sector. 

He also announced that the government was liberalising country's foreign exchange market.

The Finance Minister suggested the private sector to develop long-term instrument to collect and mobilise resources in order to manage funds for the large infrastructure projects. 

Krishna Prasad Acharya, President of the Institute of Chartered Accountants Nepal (ICAN), said that the infrastructure project development was not transparent in Nepal. "Decision making and procurement process are not transparent in this sector," he said.  

According to him, financial institutions must increase their debt risk capability and should take a right decision in order to make them competent in infrastructure financing.  

Korean Prof. Tae Yong Jung suggested the government and private sector comparing their financial status with the immediate competitors and improving the condition accordingly. 

"Investors are smart and greedy animals who are seeking profits. But why should they bother to come to Kathmandu instead of New Delhi, Dhaka or any other competitive markets around world?" he said. 

Compare your financial status with the immediate competitors and improve your condition, he said. 

Published in The Rising Nepal daily on 12 September 2019.