Government reform, policy execution stressed to improve investment climate

Kathmandu, Sept. 8

National and international development stakeholders participating at the Nepal Infrastructure Summit (NIS) 2022 have suggested the government to improve governance and implement the policy reforms made to create better business environment and attract domestic and foreign employment.

The two-day NIS 2022, organised by the Confederation of Nepalese Industries (CNI) in collaboration with the Ministry of Physical Infrastructure and Transport (MoPIT), kicked off on Thursday in the Capital.

There should be efficiency in government process and policies, only announcement of good policies won't do but a sincere effort would pay in the long run, said the entrepreneurs.

Former Prime Minister and Chairman of the CPN-Maoist Centre, Pushpa Kamal Dahal Prachanda, said that creating conducive atmosphere for private sector to do business is and should be the prime concern of the government. "The private sector can be a partner in infrastructure development, national prosperity and economic growth. Therefore, we had given priority to the private sector while formulating the present constitution as well," he maintained.

According to him, government policy and programmes should be aligned with the private sector’s needs as well. There is a need for the government to change its attitude towards the private sector and vice versa, he stated.

Prachanda said that Nepal could be ushered into an integrated economic structure only with the rise in the connectivity infrastructure and greater linkage. The former PM appreciated the role of the development partners and pledged even better environment for Foreign Direct Investment (FDI).

He recalled his recent India trip and informed that he pledged Indian support in transforming Nepal as the bridge between the two world economic powers – India and China.

                       

Former Finance Minister, Dr. Yuba Raj Khatiwada, suggested that the infrastructure should be planned in a way that it compliments each other such as customs, and roads and railways.

According to him, tourism, hydroelectricity, transportation sectors can draw foreign direct investment to Nepal.

However, Dr. Khatiwada maintained that honesty in partnership among the development actors is needed to move forward on the path of prosperity.

"PPP is a good model. But PPP doesn't work as we expected in our case because of the poor and unbalanced partnership. Tools like hedging can be crisis management instrument in such partnership. Risks should be equally divided and hedging can help in this regard," he said.  

Equity partnership is the best way to share the risk in case of development partners so that it could be your investment, responsibility, he stated.

President of CNI, Vishnu Kumar Agrawal, pointed at the need to enhance the capacity of Nepal's infrastructure so that the transportation of goods and movement of people could be eased.

"The private sector can play an instrumental role in tapping the immense opportunities in business and infrastructure but government should back it with good policies and initiatives," he said.

The government has announced to establish industrial zones in the Public-Private Partnership (PPP) model which is a welcome step. International investors are curious to know about the safety of their investment in Nepal so the country must assure safety.

He informed that this edition of the NIS is expected to change the concept that infrastructures are only 'physical' and has included a special session on information technology to emphasize the development of this sector.

"IT is the future of development and Nepal has a high potential to earn foreign currency from service exports. So, the country should accord top priority to the development of IT infrastructure and creation of human resources," he said.

According to Agrawal, good contractors that complete the projects in time and deliver a quality product should be assigned extra weightage while evaluating the contract award. It will save the project from cost and time overrun.

 

Former Vice Chairman of the National Planning Commission, Dr. Swarnim Wagle, stated that there was a challenge to fill the gap in infrastructure in health, education and information technology. "Crisis like the COVID-19 pandemic exposed our vulnerabilities in the areas of infrastructure development, national policies and human resources," he said.

According to him, it’s not the market failure but the failure in governance. "We are sick and tired of the inaction on the part of the government," he stated.

Ashok Lavasa, Vice President of Private Sector Operations and Public-Private Partnerships at the Asian Development Bank, said that the bank is supportive to the five-year infrastructure development plan prepared by the Investment Board of Nepal (IBN) that envisions taking the private sector on board. He said that public-private partnership could be a better choice in addressing Nepal's gap in development financing.

He said, "We aim to expand our engagement in supporting infrastructure development, small and medium scale enterprises and women entrepreneurs," he said.

According to Lavasa, this event is a base camp where Nepal can assess your capacity, equipment available and make aim to climb up.

Likewise, Radhesh Pant, former CEO of the IBN, said that financing is not a problem in Nepal. Well prepared programmes and good and effective communication with the investors and developers are the key to attract financing to infrastructure development, he shared.

The summit is holding discussions on nine key sectors of infrastructure development economy which the organisers expect would help in the leapfrogging in terms of prosperity.

The NIS 2022 aims to continue identifying key constraints to infrastructural development in the current context, catalyze reforms promised by the government for infrastructure development, and forge stronger networks and alliances in the region for seamless connectivity and shared growth.

Likewise, it also has the objectives of attracting large scale private investment in Nepal’s core needs and strengths, and prioritise the delivery of green, climate-resilient infrastructure projects that help achieve the Sustainable Development Goals (SDGs).

Published in The Rising Nepal daily on 9 September 2022.