We need investment, technology and management skills

Hari Bhakta Sharma

President, Confederation of Nepalese Industries (CNI)

With an aim of attracting foreign and domestic investment in infrastructure and other business areas, the country is hosting Nepal Investment Summit 2019 on 29 and 30 March. The Investment Board of Nepal is organising the grand event in collaboration with the concerned government agencies and private sector. It has finalised 71 projects to showcase at the summit while there were efforts to make reforms in policies and processes in order to create better investment environment and ease the doing business. 

The summit that will be inaugurated by Prime Minister KP Sharma Oli will witness about 700 international and national investors and other stakeholders. In this backdrop, the Gorkhapatra Corporation interacted with President of the Confederation of Nepalese Industries (CNI) Hari Bhakta Sharma at 'Gorkhapatra Dialogue' programme. Excerpts: 

What is private sector’s view about the Nepal Investment Summit 2019?

It is good that the government is organising investment summit to speed up the economic progress and business development. Private sector is a partner in the national economy. So far as the summit is concerned, we are working with the government through the Investment Board of Nepal (IBN). We are on the same wavelength. This is an opportunity and we must not miss its benefits.

However, the government must be conscious enough not to let the investment go to waste. There are many irrelevant and complex policies and laws which should be amended or replaced with better ones at the earliest. The private sector is encouraged with the government’s proactive steps to improve the legal regime to create better business environment. I am hopeful that the private sector will play an important role in the development of large infrastructure projects.

Does this mean that the private sector is ready to invest in the long-term development projects?

We still have challenges like inter-agency coordination and complex process which is one of the reasons that obstruct rapid industrial development in the country. While we are talking about developing international level competitiveness in manufacturing sector, there is not a single industrial zone with required modern facilities. 

It will take time to institutionalise a fast and dynamic process. But, we must not miss the new opportunities that are knocking at the door, else there is a risk of failure of the country. This is a historical event as about 600 foreign investors are coming to get idea bout investment potential in the country.

How do you assess the investment summits in the past? The country received an impressive investment commitment but their materialization was poor. What stopped the investment from pouring in?

The capacity of the government agencies was poor in the past. There should be a policy to make them smart, and they should be equipped with appropriate technology and skilled human resources. At the same time, the private sector also lacked the capacity and interest in the infrastructure development and manufacturing industries. It was more inclined to trading, especially importing goods and selling in the domestic market while the consumers increasingly began to use imported luxury goods. Consumerism flourished.

It happened because the government never knew what the country needed. It was happy to collect more revenue while the private sector was complaining about the lack of infrastructure for business development. This scenario must be changed, and industries should be developed in every region as per their competitive and comparative advantages. 

At the same time, our education system should also be overhauled and technical competence enhanced in order to make it able to produce capable manpower to meet the market demands for quality human resources. Private sector is ready to join hands with the government in developing required infrastructure in all the states.

But, there are many instances that the private sector has escaped from its responsibilities in the name of certain problem?

The country is just formulating the law to facilitate the private sector to involve in development projects. The Public Private Partnership (PPP) is getting importance now. Otherwise, there is a situation that the road built by an industrialist inside his industry premises or an electricity pole erected would be property of the government. Who will come here to run industries in such a pathetic situation? Therefore, the businessmen are happy with trading. 

There are many electric appliances which have been already outdated in the developed countries but are being dumped in Nepal.

There are land related challenges as there is a ceiling to own land. It has obstructed the commercialisation of agriculture. Land management should be modernized so that it supports entrepreneurship development. An entrepreneur finds a piece of land and establishes industry there. But, he has to face problems after a few years as the settlement developed around it wants the facility to be shut.

The country has a government with two-thirds majority which has ensured political stability. Therefore, the regulatory capacity of the government should be enhanced and both the government and private sector should be proactive in leading the country on the path of economic development. We need capital, technology transfer and management skills for it.

You enumerated so many challenges for doing business in Nepal. In such a situation, what can Nepal offer to the investors in comparison to the neighbouring Indian states like Assam and Bihar?

Yes, there is policy clarity, less complex process and required infrastructure. But, it does not mean that our situation is worst; Nepal is moving ahead with policy reforms, we are a peaceful country and political stability has created many opportunities. Nepal can be a good brand name as Nepali products are well received abroad. So far as the weaknesses in the system, it can be resolved with the adoption of modern technologies.

In your opinion, what are the priority areas for the investors?

If connected with health care, information technology sector can be an area of high potential. We must be ready to tap the opportunities unleashed by the new industrial revolution which will witness the use of artificial intelligence in every sector of business and development. Similarly, medical tourism, metallurgy and electronics are other potential areas. 

Agriculture has remained an attractive sector traditionally. World’s leading IT companies like Amazon, Microsoft and Google are participating in the summit. We should give special focus to such companies so that they come here to make investment.

Similarly, there are good business initiatives like ostrich meat, dragon food and red banana which need special government support in order to grow.

Published in The Rising Nepal daily on 26 March 2019.