Nepal Investment Summit kicks off

Nepal is a virgin land for investment: PM Oli  

Kathmandu, Mar. 29: 

 The government and the main opposition stood together to welcome the foreign investors at the Nepal Investment Summit 2019 that kicked off in capital on Friday.

They echoed the same voice for the protection of investment and creation of business-friendly environment in the country.

 Prime Minister KP Sharma Oli said that the government would continue to put endeavour to create better investment climate while the Central Committee member of the Nepali Congress, the main opposition party in the parliament, and former Finance Minister Dr. Ram Sharan Mahat, on behalf of his party, extended full support in attracting the Foreign Direct Investment (FDI).

The 2-day summit is being organised by the Office of the Investment Board with the support of concerned ministries and private sector organisations.

The government aims to introduce Nepal as a promising land of opportunities for private investors, to apprise of major policy, procedural and structural reforms made recently to make the country as an attractive investment destination, showcase potential investment projects and to make negotiations between the interested investors for the viable projects.

It is showcasing 77 projects, including 27 from private sector, of about 60 billion US$ at the summit, attended by more than 600 foreign investors and delegates from 40 countries.

Prime Minister Oli said that Nepal was almost a virgin land for investment, and investment in every sector in every field is profitable.

"This summit has brought us together for a genuine cause: consolidating friendship and fostering partnership for our mutual benefit. Through this partnership, Nepal will get the desired development outcomes with your substantial investment with good return," he said.

Stating that political stability, which is a key prerequisite to country's economic growth, was absolutely fulfilled now, PM Oli assured the foreign investors attending the summit that the country has now policy consistency along with political stability.

 "Legal, institutional and procedural reforms, which were long overdue, have gained speed under my leadership. We have drafted many new laws translating the provisions of the new Constitution into legal and institutional framework. The new frameworks have also created conducive environment for foreign direct investment, among others," he said.

According to the PM, the central task before the government was to undertake rapid economic transformation.

"If we could successfully steer country's historic political transformation, we can do the same in economic realm as well," he said.

He stated that the current government was mindful that investment required transparent and responsive governance and rule of law. 

He also said that in the past few months the government had made substantial progress in improving investment climate in the country and established a sound regulatory framework with the enactment of two key legislations – Foreign Investment and Technology Transfer Act (FITTA) and Public-Private Partnership and Investment Act (PPPIA).

"The PPPI Act provides one stop service for any foreign investment of over Rs. 6 billion or a hydropower project over 200 MW capacity. The new FITTA ensures national treatment for any foreign investment," said the PM.

Stating that the government has started online registration and payment system, he informed that the country would actively pursue bilateral investment protection agreement with friendly countries that would further ensure protection of foreign investment.

"We will also pursue negotiations on avoidance of double taxation with interested countries to provide further incentives. The next reform cycle would involve policies and comprehensive legislation in the field of intellectual property rights," said PM Oli.

The PM also tried to allure the investors by inviting them to get huge demographic dividend as the country has about 57 per cent population of working age, and there was a competitive and low labour cost.

He counted on round the clock electricity supply, increasing road connections, cross-border connectivity, strategic locations between the world's two largest markets, compelling incentive for investment and preferential treatment in many development countries, to present the competitive advantage of the country.

Dr. Mahat extended full support to the investors and urged the investors to invest with full confidence.

"Nepal has several areas of comparative and competitive advantage. It has hardworking people, natural resource endowment, energy potential, increased purchasing power and better market opportunities in the region and beyond," he said. "We can be a small market but our two neighbours are the fastest growing economic powers. We want to attract investment with these huge markets in mind, taking advantage of our resources and human resources," he added.

According to him, Nepal has high FDI prospects as it has been receiving FDI about 0.4 per of the Gross Domestic Product (GDP) which is much lower than its neighbours which are receiving FDI of about 2 per cent of the GDP.

"We need a huge investment to lead the country in the path of the economic growth. But as the domestic investment is not sufficient for accelerating the growth, Nepal needs more FDI," said Dr. Mahat.

Minister for Finance Dr. Yuba Raj Khatiwada said that while encouraging investment in several areas of private sector attraction, the government was coming forward to work hand in hand with the private sector in different models of PPP.

"The tax system is transparent and predictable; corporate tax rates are competitive; foreign exchange regime is liberal; and pegged exchange rate regime provides a cushion to foreign exchange market volatility," he said.

The Finance Minister also said that the government was focusing on forward looking macroeconomic and sectoral reforms, also with the support of the development partners.

Several regulatory and operational reforms in the areas such as industry, energy, forest and land management, environment, airlines industry, financial services, public procurement, and labour market have already been undertaken in the last one year, he said.

Vice-President of the World Bank Hartwig Schafer extended full support to Nepal in pursuing its development agenda and said that the prospects of the present government in executing its visions were good.

He recommended to make the civil servants capable and smart as the facilitator.

"Give projects to the private sector if it can do it. If any financial technical support is needed, the WB is ready to offer. We stand ready to provide support to Nepal," he said.

Vice-President of the Asian Development Bank Shixin Chen said that there was high prospect in infrastructure development in water supply and sanitation, energy, transport and telecommunication.

Union Minister for Investment and Foreign Economic Relations of Myanmar U Thaung Tun said that the countries like Nepal and Myanmar needed responsible investors, those eying for long-term profitability.

Minister for Foreign Affairs Pradeep Kumar Gyawali said that investment related laws were created or amended to provide better investment services.

Published in The Rising Nepal daily on 30 March 2019.