Remittance helps to raise consumption of the people of the bottom 40 percent. As the income of the people of this group rises, consumption also rises. The country is lacking to produce goods to meet the growing demand. Import is the basic weapon to meet this demand.

Remittance and import

A positive relationship exists between remittance and import. It means both remittance and import rise over time or they move in the same direction. The share of import to GDP exceeds the share of remittance to GDP, which means the share of import is larger than the share of remittance.

Both import and remittance are increasing over time and implies that they move in the same direction indicating with every increase in remittance leads to increase import. As the share of remittance to GDP increases from 1.2 percent in 1993-1997 to 29.79 percent in 2013-17, the share of import to GDP also jumps at a greater speed from 33.61 percent to 40.37 in the same period.

The inflow of large volume of remittance increases import over time. It implies that scarce resource coming from the sweat of Nepalese youths has largely been spent in the import of goods mainly for consumption. This trend, if continued, will bring disaster in the economy in the days to come, enlarging the size of the trade deficit.

Nepal is lacking by appropriate policies along with security to divert scarce resource into the productive sector. Without this, people will prefer to consume more rather than to save and invest what they are supposed to earn. In this perspective, investment if any will flow in the lucrative business sector as it happens today which yield high return with less or no risk.

Remittance and agriculture

As described above, youths particularly involved in farming are migrated. People prefer to migrate from Nepal to the rest of the countries of the world and even rural area to urban area where the market for their labor is abundant. This tendency among other things makes the agriculture sector less responsive.

During the review period, agriculture and remittance as a share of GDP have an inverse relationship. It means the share of agriculture to GDP has been decreased while the share of remittance inflow has been increased. The share of agriculture to GDP in the period 1993-97 was nearly 40 percent. The trend of agricultural share to GDP onwards is being declined. It decreases by – (25.65 percent) to reach 29.31 percent in 2013-17. In contrast, the share of remittance to GDP during the period 1993-97 was 1.2 percent increases at the annual growth rate of 2382 percent to reach 29.79 percent in 2013-17.

It indicates that the share of agriculture and remittance is coming to par in the period 2013-17. From this scenario, the economic base of Nepal has been shifting from the subsistence farm economy to the remittance economy. If this tendency continued in the days to come, Nepal will be dependent on the import of agricultural product from India and elsewhere.

Remittance and manufacturing

The share of manufacturing to GDP over the review period shows that the Nepalese economy has a poor performance in the manufacturing sector. Development of the manufacturing sector among other things is a part of balanced economic development.

As described above, Nepal is importing goods from foreign countries particularly from India and China to meet the growing demand supported by remittance mainly for consumption. This makes our economy over-dependent on import. It is the outcome of the poor performance of the manufacturing sector.

The share of manufacturing value added to GDP in the period 1993-97 was 8.82 percent. It reached 5.54 percent in the period 2013-17 declining at the annual growth rate of – (37.2 percent) while the trend of the share of remittance to GDP is increasing. It jumps to 29.79 percent in 2013-17 from 1.2 percent in 1993-97.

Increasing remittance inflow has not been able to contribute to the manufacturing sector. Instead, it seems that it discourages to invest in this sector as the share of manufacturing to GDP has been declining over the review period. It indicates that remittance does not help to grow the manufacturing sector instead it makes this sector to deteriorating.

Conclusion

The co-movement of export and remittance is opposite over the review period indicates that the Nepalese economy is in Dutch disease. The large inflow of remittance is not able to increase export. However, it reduces export over the years. Consumption rises as the rise in remittance over time. Lack of domestic production to meet the growing demand, in turn, import rises as the rise in remittance over time. Thus, remittance helps to raise import.

Misguided policy discourages people’s willingness to save and invest. It also discourages to invest in industrial entities. This makes the country over-dependent on import. Nepal is an agricultural country. Agriculture supports the livelihood of people accounted for over 70 percent. However, the share of agriculture to GDP in the past two and half decades decreases.

In contrast, the share of remittance to GDP in the same period increases. The share of remittance and agriculture to GDP becomes equal in the period 2013-17. Remittance contribution in the manufacturing sector is not promising which is a leading sector to decrease import and increase export.

In terms of as a share of GDP with every increase in remittance manufacturing value added decreases over time. Goods which cannot be traded in the international market are called non-tradable goods. It means they are traded in the national, regional and local market.

One of the examples of non-tradable goods is real estate. The portion of remittance excess over the consumption (saving) is being invested in real estate. The price of real estate in urban and semi-urban places is skyrocketing throughout the nation. It is because of the lack of investment opportunities in other sectors of the economy. Export is declining of tradable goods as seen in the preceding paragraphs. This proves that Nepal is catching up the Dutch disease.

As predicted in October 2009, the plot over Nepal’s international relations is thickening. Nepal is caught in the whirlwind of international cross-currents of outgoing China and the resistant US in letting its super-power position erode. Nepal till that time managed one-nation intervention at a high cost to its basic interests. But to deal with multidimensional interests Nepal was not mentally and, let alone, physically prepared. However, Nepal finds itself elevated in importance but not in diplomatic skill to accept the challenge therein.

It was then said, “It has been a uni-dimensional affair. Our political leaders approached India for resolution of our domestic disputes especially after the fall the Rana regime. The tradition is continuing even today. But a new dimension is opening up making a foreign intervention in our internal affairs complicated. As China is showing increasing interest in Nepal’s political stability with its obvious fallout effect on stability in the Tibetan region of China, things won’t remain as simple as before.”

It was to avert the inevitable controversy that Nepal government has kept hitherto mum over this new role that Nepalese never thought of. However, keeping quiet over the rising contention of the big powers at home and abroad is neither an excuse nor a way out of this impasse. Nepal is being dragged in a tug-of-war that was seen coming years earlier.

In 2019, just after a decade, the complication has appeared before us. Many nations have joined the competition. It is the time when China has boldly launched the Belt and Road Initiative (BRI) program of which Nepal has agreed, and accordingly signed the document, to be a partner. Nepal stands to gain from its participation by way expanding its connectivity with neighbors and countries beyond them, serving as a transit point for the big traders on both sides of its border, importing and exporting commodities at a cheaper and competitive price and augmenting people-to-people contacts with many countries thereby. They have stood valid only in theory so far. They are yet to show the results in practice.

On the other hand, Nepal has been lured to join actively the Indo-Pacific grouping that has emerged to halt the outgrowth of Chinese influence outside its borders. Nepalese are yet to understand what does the ‘central role’ means, which it was assigned in Washington DC, in the group.

It was to avert the inevitable controversy that Nepal government has kept hitherto mum over this new role that Nepalese never thought of. However, keeping quiet over the rising contention of the big powers at home and abroad is neither an excuse nor a way out of this impasse. Nepal is being dragged in a tug-of-war that was seen coming years earlier.

The actual showdown took place in Nepalese soil during the recent visit of US Deputy Assistant Secretary of Defense for South and Southeast Asia Joseph H Felter. He made a remark: “Some of the activities of China as a part of the BRI had been a matter of concern for all. It is our interest to have constructive relations with China. But to be clear there are some activities that China is engaged in have been the cause of concern.”

While citing examples of the Maldives, Sri Lanka and Malaysia, Felter said that some activities associated with the BRI have been seen very much in the interest of China, but not necessarily in the interest of the host countries. He welcomed investment from China. “But the bottom line is that it has to serve the interest of Nepal. We welcome constructive relations with China,” he said.

“We have shared common mountains and rivers. We are the neighbors. But some of the countries far away from this region, they only speak something but never do something. But what we are doing is better for our neighbor or our friends,” she said.

Felter expressed hope that China would improve transparency and quality of its investment and ensure that its activities support the interest of countries like Nepal just as its own. “Let us encourage China to change its policy. We welcome China to participate in this rule-based international order. The Indo-Pacific Strategy is all about safeguarding this rule-based order,” he added.

There was a sharp and prompt retort from the Chinese ambassador, Hou Yanqi. She first clarified that it was not China but Nepal that selects projects to be implemented under BRI. Both countries are discussing new projects. All these new projects are determined by Nepal, not determined from China. She said some of the reports said the projects will only be in the interest of China. That is quite ridiculous.

The envoy also clarified that projects requested by the Nepalese side are selected on the basis of the needs and priority set out by the Nepal government. She said it was not good for a country thousands of miles away to comment about relations between two immediate neighbors. “We have shared common mountains and rivers. We are the neighbors. But some of the countries far away from this region, they only speak something but never do something. But what we are doing is better for our neighbor or our friends,” she said.

It was very unusual for the Nepalese in Nepal to find big powers making a row in Nepalese territory. Nevertheless, the Chinese embassy minced no word to hide its annoyance at the American visitor’s comments. It spoke its mind and said, “Some irresponsible comments on China-Nepal Belt Initiative cooperation by the US official make them surprised and confused, and that these remarks are unpopular and have no market. If a country cannot provide help for developing countries, should, at least, refrain from obstructing others from assisting these developing countries, even less hurting the benefits of these people to serve its own political needs and sowing discords.”

The embassy also alleged that the US had played up the so-called issue of non-transparency of China’s investment and increasing the debt burdens through BRI to serve its political needs. It attempts to interfere [in] the friendly cooperation between China and Nepal which is very ridiculous.

It was interesting to note that Nepal was dumb-founded in the whole process of verbal recriminations between the American and Chinese representatives. It was evident that Nepal either did not foresee what lay ahead of its future that I had warned of 10 years ago or has not developed acumen to grapple with a situation like this. This is however just a beginning of the complex relationship that Nepal will have to confront in the coming days. The choice is either you develop a capacity to tackle it or be swamped in the international quagmire.

Dutch disease, coined by The Economist in 1977 is a term to describe the phenomenon of The Netherlands’s economy after the discovery of natural gas in 1959.  Natural gas was being exported massively. The export of natural gas particularly, increases the inflow of foreign currency. Currency appreciation is the most likely impact of massive foreign currency inflow. It makes the country’s other products less competitive on the export market.

Cheap import jumps that gives rise to deindustrialization.  Natural gas export has boomed. However, the growth of other sectors of Dutch economy, particularly manufacturing and agriculture sector, was drastically deteriorated. Boosting the income through the export of natural resources tends to deteriorate the growth of other sector is the most likely impact of Dutch disease.

The government would deviate from its aim for growth-oriented economic management such as free trade, bureaucratic efficiency and institutional quality. This would put the economic security of people at risk.

Obviously, this could restrict growth of the rest of the sectors in four ways: The first is the overvaluation of currency. Natural resource boom that helps to export raw materials in an incremental ratio that leads to sharp rise in the inflow of foreign currency. The most likely impact of this is appreciation of real exchange rate. This helps to increase real wages and hence, deteriorates export of manufacturing products.

Secondly, natural resource boom would lead the values of the society to deteriorate. Its repercussion is the change of working manners, from good to worse of government institutions. This would normally lead to stimulate malpractices.

Corruption and rent seeking behavior would take place rampantly. The major income from resource boom has been invested in government consumption rather than investing in other productive sectors of an economy.

Thirdly, the government would deviate from its aim for growth-oriented economic management such as free trade, bureaucratic efficiency and institutional quality. This would put the economic security of people at risk.

Lastly, overconfident in natural resource would lead to deteriorate the quality of human capital as well because of the inappropriate attention in education expenses.

Human Resource Export

Nepal exports human resource in a large volume, constitute over four million youths irrespective of its quality since last three decades. Youths of Nepal migrated formally. It implies that Nepal is sending people officially in different countries of the world to work and live.

The export of human resource in its raw form boosts the economy through remittance, at least in the front of lessening chronic poverty, smoothing consumption, and in turn increasing import.

Remittance contribution in smoothing consumption (both government and private sector) cannot undermine as the government data shows over 80 percent of remittance has been spent on consumption. This is the self-spoken fact that the impacts of remittance in economic development and growth is minimal.

In addition, remittance makes the price of non-tradable goods skyrocketing. Now a days, worker’s remittance has becoming a major source of income. Since then it makes Nepalese economy too dependent on remittance. Migrated youths from their work in foreign land earn a certain amount of money through wages or foreign employment. They send back a portion of their total earning to their home to cover the family expenses.

This has been becoming a booming sector. This constitutes a significant amount of foreign exchange amounted to US$6.9 billion accounted 28.3 percent share in GDP in 2017 up from US$6.6 billion in 2016. This indicates that the inflow of remittance has undoubtedly been raising over the years.

Remittance contribution in smoothing consumption (both government and private sector) cannot undermine as the government data shows over 80 percent of remittance has been spent on consumption. This is the self-spoken fact that the impacts of remittance in economic development and growth is minimal.

Nepal is earning foreign exchange through remittance. Foreign exchange inflow through remittance might have been appreciating Nepalese currency is a subject to investigation because the nation adopted a peg system to determine the rate of foreign exchange so that Nepal loses competitive edge to boost the export in the foreign market indicating a deindustrialization in the economy.

In this context, this paper aims to show the relationship between remittance export, import, manufacturing and agriculture in the Nepalese economy.

Remittance and export                                                                                                              

Now it becomes a reality that human resource export to some extent booms the economy. And assume that it gives rise to deindustrialization. It can reduce export.

This trend clearly establishes the inverse relationship between remittance and export. In 1990s, export was greater than the remittance. The trend of export was decreasing while the trend of remittance was increasing.

The declining trend of export and the rising trend of remittance is being continued resulting an export share to GDP in the period 2013-17 comes to down 10.48 percent, while the share of remittance to GDP goes up to 29.47 percent.

For instance, the share of export to GDP was 22.31 percent in the period 1993-97 which declines to 21.85 percent in the period 1998-2002, decrease at the annual growth rate of – (2-1 percent). As against to this, the share of remittance to GDP jumps from 1.20 percent to 3.75 percent in the same period, increase at the annual growth rate of 212 percent.

The declining trend of export and the rising trend of remittance is being continued resulting an export share to GDP in the period 2013-17 comes to down 10.48 percent, while the share of remittance to GDP goes up to 29.47 percent.

To be continued…

Views expressed in this article are the author’s own and do not necessarily reflect the stance of Khabarhub.

Nepal is a small landlocked Himalayan country situated between two major Asiatic civilizations: India to the south and Tibet, an autonomous part of China, to the north.

For political and administrative reasons, Nepal is structured along hierarchical lines. It has three different levels of administration as, rural municipalities (460) and urban municipalities (293), metropolitan municipalities (6), sub-metropolitan municipalities (11) and municipalities (276)), districts (77), and provinces (7).

There are three elements which best distinguish an area’s urban or rural character. They are ecological element (population by ecological region), economic element (economic activities especially revenue collection) and social characteristics (which are difficult to measure).

Nepal is a least developed country in the world with per capita of US$ 877 in 2017. Nepal ranks 197th in terms of Gross Domestic Product (GDP) per capita and 145th out of 186 countries in terms of Human Development Index.

Karnali Province has the lowest access of irrigation facility of land (22.9 percent) and Province No. 3 has the lowest cultivated land (73 percent) whereas Province No. 2 has the highest (66.3 percent) with the highest cultivated land area (89.9 percent).

Around 66 percent of the Nepalese population is engaged in agriculture and the nutritional status of Nepalese people is poor. It ranks 118th out of total 162 countries in the world with an average daily dietary energy consumption of 2340 kilocalories per day and 2.3 million people (8.1 percent) are undernourished. Based on Population Census 2011, the highest proportion of total population is found in Province No. 3 (20.9 percent), followed by Province no. 2 (20.4 percent) and the lowest in Karnali Province (5.9 percent)

About 27 percent of Nepal’s population is multi-dimensionally poor. By place of residence, the rural-urban divide is evident, with 7 percent of the urban population and 33 percent of the rural population being multi-dimensionally poor. Similarly, Provinces 6 and 2 have the highest rate of multidimensional poverty – with every second person being multi-dimensionally poor (50 percent) – followed by Provinces 5 and 7 (approximately 30 percent). The major contributing indicators to overall poverty in Nepal and in rural Nepal are malnutrition and insufficient years of schooling.

Of total 35,601 schools, the highest number of schools is found in Province No. 3 (7388) and lowest in Karnali Province (3199). Likewise, comparing school student ratio, the highest ratio is recorded in Province 4 (64 per 10 schools) and the lowest in Province No. 2 (31 per 10 schools). The net enrollment rate from Grade 1 to 8 in Province No. 2 (79.2 percent) and Province No. 5 (91.2 percent) is below the national average of 92.3 percent.

Karnali Province has the lowest access of irrigation facility of land (22.9 percent) and Province No. 3 has the lowest cultivated land (73 percent) whereas Province No. 2 has the highest (66.3 percent) with the highest cultivated land area (89.9 percent).

Of total food production 5.36 million metric tons in the FY 2015/16, the demand for food was 5.43 million metric tons – a food deficiency of 71 thousand metric tons. Despite the plain cultivable land in Province No. 2, food deficiency is still pervasive (i.e. 112,000 metric tons), followed by province No. 3 and Karnali Province.

Literacy rate is noticed highest in Province No. 3 and the lowest in Province No. 2. The literacy rate in Province No. 1 and Province No. 3 is above the national average. Similarly, life expectancy at birth in Province No. 2, Province No. 3 and Province No. 4 is above the national average 68.8 years, whereas, it is below the national average in other provinces.

In terms of hydroelectricity generation, Province No. 4 represents the largest share in production (477.9 Megawatt) to date whereas Province No. 2 and Karnali Province have not generated hydroelectricity as of yet.

Of total 35,601 schools, the highest number of schools is found in Province No. 3 (7388) and lowest in Karnali Province (3199). Likewise, comparing school student ratio, the highest ratio is recorded in Province 4 (64 per 10 schools) and the lowest in Province No. 2 (31 per 10 schools). The net enrollment rate from Grade 1 to 8 in Province No. 2 (79.2 percent) and Province No. 5 (91.2 percent) is below the national average of 92.3 percent.

The access of local road facility is found highest in Province No.3 (14900 Km) whereas Karnali Province No. 7 (3724 Km) and Province (2607 Km) have comparatively less access. As per the records of the number of industries registered in the Department of Industry, Province No. 3 comprises the highest numbers of industries (4961) and the lowest number in Karnali Province (38).

Out of the total deposit collected from mid-July 2016 to mid-July, 2017 more than two-third (72 percent of total deposits) has been collected in Province No. 3.

In terms of hydroelectricity generation, Province No. 4 represents the largest share in production (477.9 Megawatt) to date whereas Province No. 2 and Karnali Province have not generated hydroelectricity as of yet.

Based on the total cultivated land, there is access of irrigation facility in 22.9 percent of land, the lowest, in Karnali Province and 66.3 percent in province No. 2, the highest. Likewise, of total arable land, Province No. 2 has the highest cultivated land area i.e. 89.9 percent and Province No. 3 has the lowest, 73 percent, cultivated land.

Of total food production 5.36 million metric tons in the FY 2015/16, the demand for food was 5.43 million metric tons – food deficiency of 71 thousand metric tons. Despite the plain cultivable land in Province No. 2, food deficiency is still 112,000 metric tons. Likewise, Province No. 3 and Karnali Province are also the food deficient provinces.

Province No. 3 represents the highest proportion of financial institutions (i.e., commercial banks, development banks and other finance companies) (29.2 percent of 5164) whereas Karnali Province has the least (2.9 percent). In terms of the services rendered by the branches of class A, B, C banks and financial institutions, population per branch is found the highest in Province No. 2 (17,973 persons) and the lowest in Province No. 4 (4,640 persons).

Out of the total deposit collected from mid-July 2016 to mid-July, 2017 more than two-third (72 percent of total deposits) has been collected in Province No. 3. The proportion of the share of credit expansion has also been recorded in Province No. 3 (57 percent) while compared to other Provinces. Thus, it is apparent that the presence of banks and financial institutions and their resources have been highly concentrated in Province No. 3.

Programs of fulfilling basic social needs such as decent job, minimum food security clean drinking water and safe housing should also be implemented in such deprived areas.

Government of Nepal has adopted a unique socio-economic development model in accordance with its long-term objective of building a “Prosperous Nepal, Happy Nepalis,” which is only possible through high economic growth and its equitable distribution. However, Nepal presents unique challenge for rural development. There are two major challenges. The first is that around 61 percent of total local units is rural whereas about 63 percent of total population is residing in urban territories.

This contrast plays an important role in the processes of rural and urban development. Another reason is that Nepal is still under transition from the post-conflict status involving a complex and challenging political scenario. There are still increasing signs of unrest within the country. If economic and social conditions do not improve at a rapid pace, such unrest will become more pervasive highly detrimental to the prosperity of the country.

To reduce the gap between rural and urban regions, including regional inequality across provinces tremendous efforts should be made through intervention in health and educational programs in the poorest rural areas and provinces. Alongside, programs of fulfilling basic social needs such as decent job, minimum food security clean drinking water and safe housing should also be implemented in such deprived areas.

Views expressed in this article are the author’s own and do not necessarily reflect the stance of Khabarhub.

The KP Oli government organized the fifth version of the Nepal Investment Summit with great fanfare, and announced that of the 77 development projects submitted to the Summit, quite a few of them (15) have been already signed, ten have been formally applied for by the potential investors, and the rest of them too are now followed up by different participating firms with keen interest. For this reason, the Summit has been declared a grand success.

Although done in last minute, the government also demonstrated its commitment by rushing through the parliament a few important legislation that would positively impress the summiteers about Nepal’s seriousness of purpose for making Nepal foreign investment friendly.

While similar summits earlier too did not lack in drama, the result so far has been rather disappointing, even in the case of the one organized for resources mobilization for earthquake reconstruction. The default has been double-edged.

The PM in his address assured the delegates that Nepal now is a profitable destination for investment and that they would undergo no hassles in repatriating their profits. Clearly, the Oli government has taken this summit as its flagship initiative for national development, and Oli himself would like to establish it as his legacy.

While similar summits earlier too did not lack in drama, the result so far has been rather disappointing, even in the case of the one organized for resources mobilization for earthquake reconstruction. The default has been double-edged.

While the government, in keeping with its long-standing history, has been unable to spend what resources it actually received, creating an unwelcome impression among Nepal’s donors that Nepal’s so-called “absorptive capacity” continues to be constrained and limited.

Secondly, many donors would not put their money where their mouth was. They would make a commitment in the colloquium but then would balk when asked to cough up the cash.

Despite this, it still involves lots of political tussle and bureaucratic delays almost at all levels, each of them seeking their own cuts. Under Oli government too–that has otherwise promised “zero tolerance” against corruption–such delay and tussle have remained customary.

While the donors’ behavior in this regard has been their continuing usual affair across the globe mainly due to their own lack of sense of urgency and ownership and customary bureaucratic delays, Nepal’s side of the story remains even more sordid. For one thing, Nepal’s actions have never been free from political and bureaucratic corruption in particular. This one factor alone nearly guarantees the lack of timely and fruitful spending of resources.

As things stand, every single politician at any level remains corrupt, bent on taking his/her cut in any deal, by literally auctioning off of all appointments to lucrative positions to the highest bidder, that is, positions where one can make illicit money by making compromises on the quality and timeliness of the work done by formally appointed contractors or by disguised contractors in the form of pseudo user groups whose members are handpicked by the corrupt politicians of the party in power.

Despite this, it still involves lots of political tussle and bureaucratic delays almost at all levels, each of them seeking their own cuts. Under Oli government too–that has otherwise promised “zero tolerance” against corruption–such delay and tussle have remained customary.

For instance, the decades-long Melamchi project has recently been abandoned by the latest Italian contractor who has since gone public with disclosure as to how they were all along harassed by demands for “cuts” by just about every single official in the organization in which even the minister, otherwise the daughter-in-law of the fellow President of Oli’s party, Prachanda, is implicated. Given such a situation in Nepal, it would be too early to celebrate the Summit as a real success.

National development priority

Then, there is the other, a democratically and morally more compelling issue that the flow and glitter of the Summit seem to have overshadowed, however inadvertently. While most of the proposed investment in the summit is for infrastructure and energy-related projects, centered mostly on urban industrial context, those projects are not likely to make any significant dent on the country’s overall poverty which is mainly rural in Nepal.

By any definition, rural people and agriculture economy must constitute the top concern of the government to which the Investment Summit, among many its other decisions, clearly did not do any justice.

While some 82 percent of the population remains rural, agriculture provides 71 percent of employment in the country. But the sector’s contribution to the GDP currently stands only at 29 percent, suggesting massive productivity problems in agriculture and disguised unemployment of the rural workforce.

This means that if Nepal were to become “Happy and Prosperous” as per PM Oli’s flagship slogan, the effort has to begin from the rural areas and rural economy, something that did not even figure in the grand event of the Summit recently staged by the Oli government.

This seemingly misplaced priority notwithstanding, we must try to hold the government to account by recalling the fact that President Bidya Devi Bhandari, dwelling on policies and programs of the government, had told the parliament last May that the government would double the per capita income of the country in five years and also create sufficient employment opportunities domestically to make foreign employment redundant for Nepal’s underemployed workforce.

By any definition, rural people and agriculture economy must constitute the top concern of the government to which the Investment Summit, among many its other decisions, clearly did not do any justice.

China, Nepal, and India have not adequately been able to grasp the spectrum of geopolitical strategy applied in Nepal by the western powers. The leadership and the think tanks, including the strategic stakeholders in all the three countries have failed to understand the strategic maneuvers hence applied. Thus, offering foreign agencies an unrestricted and unhinged ground of play. China’s think tank made a mistake by simply believing that Nepal’s political instability was an outcome of its internal political crisis.

The reality is that western foreign agencies are the major players in Nepal’s unending political chaos and instability. India being mystified by western strategic maneuvers has failed to see the truth. Engaged in macro management of Nepal’s political affairs it has failed to understand the latent truth behind the intention of the western power blocks. Under the illusion of western power blocks, India is seeing western power blocks active in Nepal as being beneficial to them and only targeted against China’s encirclement and containment.

In fact, unending series of political instability in Nepal has gone unchecked since it is not understood as being the double containment strategy opted by the western power blocks primarily because of the reasons that shall be elaborated below.

This has remained a grave mistake on part of India since the west is equally active in fragmenting the Indian cultural life as its important strategy. In addition, India is not beyond the sphere of Western power bloc’s containment strategy since it has a lively relation with Iran and Russia.

In fact, unending series of political instability in Nepal has gone unchecked since it is not understood as being the double containment strategy opted by the western power blocks primarily because of the reasons that shall be elaborated below.

From the 1960s, Nepal was employed in the Western strategy of disturbing Tibet by providing financial and other strategic support to Tibetan fugitives. Nepal worked boldly to suppress Khumpa attacks in Tibet using Nepal’s territory. This action of Nepal was costly.

Through its ability to keep India silent on Western intrusion and containment game against China, Nepal has been a safe haven for the Western blocks. In reality, its strategic activities against China subtle adverse impacts in India. It implies that Nepal alone is not the victim of the fallout.

China was sympathetic to Nepal but missed to foresee the fallout Nepal was to face in the days to come. China’s think-tanks had limited communication with Nepalese counterparts. Further, the Nepalese counterpart was unyielding as a significant part of it was infested by those people who deceptively served the Western interest. The situation has not fully improved even today.

India mystified with the strategy opted by the western power block has remained busy with the policy of micro-management of internal affairs of Nepal. With this policy orientation, it has failed to see the consequences of the containment strategy opted by the west upon itself. Any kind of intrusion of the West in Nepal negatively affecting the interest of China is welcomed by India. However, the very act is even detrimental to India in the long run.

Through its ability to keep India silent on Western intrusion and containment game against China, Nepal has been a safe haven for the Western blocks. In reality, its strategic activities against China subtle adverse impacts in India. It implies that Nepal alone is not the victim of the fallout.

Nepalese leaders seem unaware of this game. A huge mass of Nepalese intellectuals and relatives of Nepalese leaders and bureaucrats have migrated to the Western countries, thus forming a strong Diaspora. Nepalese policies are influenced by this Diaspora.

Think tanks and strategic stakeholders in China, India, and Nepal have failed to understand the connected dynamics between Nepal’s political instability and containment strategy opted by the west.

There are solution measures to the double containment strategy opted by the west upon China and India through Nepal, and the resulting political instability and languishing state of underdevelopment. The first is that Nepal should be able to convince both China and India to help it uplift from the languished situation of underdevelopment.

Nepal and China can jointly take the confidence of India in assuring that there is no negative impact through Nepal’s economic ties with China. This can be done by enhancing connectivity and dialogue among intellectuals, students, journalists and think-tanks of three countries.

These problems can be sorted out successfully through increased communication between think-tanks and through a connection at people to people level. China must be able to select credible people and institutions to promote the strategy for application of BRI in Nepal.

China, India, and Nepal must break the mystified perspective of insecurity through an effective trilateral relation. BRI could be the right platform for that purpose. However, little has been done to clarify the misconception of Indian intellectuals in regards to BRI. Nepalese intellectuals can facilitate in doing away with the confusion between China and India.

China, India, and Nepal need to come together in an effective manner if the double containment strategy is to be countered meaningfully. India must give up the fear psyche it has in making economic ties with China through Nepal. The Himalayan corridor can be an effective way out, and this idea can be promoted by initiating projects between China and Nepal. Nepal’s bureaucratic unpreparedness and political indecisiveness are major hurdles in this regard.

These problems can be sorted out successfully through increased communication between think-tanks and through a connection at people to people level. China must be able to select credible people and institutions to promote the strategy for application of BRI in Nepal.

The two civilizations-India and China-can stand side by side yijein harmony. These two countries historically have had mutually learned to respect each other and avoid wars. They are heavily influenced by each other’s knowledge and traditions.

Their scholars visited each other’s country in the past which is exemplified by the account of Chinese Monk, Fi Xian. He was the first one to visit Nepal and India during the 4th century. The harmonious co-existence and mutual respect they have towards their civilizations in history are unique and idiosyncratic in nature. Hence, there is no reason for them to perceive each other as threats. In the 7th century, Nepal had rescued Wang Xuance’s mission visiting Maghad from the ill-treatment of a dissident general there.

For this, the Trans-Himalayan economic corridor between China, India, and Nepal will be a quintessential foundation. Belt and road initiative (BRI) is, therefore, a massive opportunity in this context. BRI is an opportunity for Nepal’s economic development.

Nepal learned to produce paper and made it an exportable commodity. Nepal and China have been dependable friends for the past 1600 years. Any existing problems in the coeval situation between India and China is a game designed by outsiders. The relation between India and China are not merely diplomatic in nature but rather of cultural and civilizational connectivity. Hence the fear psyche of each other being termed as threats is hollow. If this misperception persists it may jeopardize the flourishing economic development of Asia and darken the prospect of Asia becoming an economic hub.

Increased economic cooperation is a prelude to fostering political trust between India and China. This will, in turn, lead to a conducive environment in ending their political problems such as border disputes. Gradually, China, India, Nepal and South Asia as a whole can be strong enough to successfully tackle with the containment strategy opted by western power blocks by promoting partnership in economic development through increased connectivity.

For this, the Trans-Himalayan economic corridor between China, India, and Nepal will be a quintessential foundation. Belt and road initiative (BRI) is, therefore, a massive opportunity in this context. BRI is an opportunity for Nepal’s economic development.

The Trans-Himalayan economic corridor would be a reliable rescuer of Nepal from the current unbecoming situation of political and economic instability. It would thus frustrate the double containment strategy opted by the west through Nepal upon China and India and would support Nepal in transforming from the so-called ‘yam’ between China and India, to a bridge between the two prospective superpowers.

Prime Minister KP Oli’s intention to unilaterally run the National Security Council (NSC) on his solo decision has warmed the politics of Nepal once again. Basically, it was the product of the 1990 constitution composed of prime minister as the chair, defense minister and the army chief as the members.

As there was the tradition of to hold the portfolio of the defense by the prime minister himself, in fact, the council had just two heads sharing 50/50 votes to mobilize the army.

The controversy arose when then PM Girija Prasad Koirala wanted to mobilize the army against the Maoist in 2001 in order to release 52 police personnel including, Deputy Inspector of Police (DSP), Thule Rai from the Maoist captivity in Holeri.

A brief explanation is pertinent to further explain the controversy. We must first understand the way the army was groomed under the monarchical system and the political vision of the leaders who had a limited exposure of statecraft and shortsightedness in the use of the military in terms of resolving internal conflict.

The most complex issue on national security of Nepal is to manage its geopolitical constraints. The coordination and control of national and international power centers are the most challenging for the governments of any nation. In fact, no power center wants to be controlled and intervened by the governments.

The palace wrangling into it was not clearly understood by the government and the actors of the geopolitics that dictate the national powers as well. The controversy between the government and the army was fabricated by media that compounded the entire episode forcing PM Koirala to resign from the post. The history is again repeating with PM Oli, due to his own wish to control the entire national apparatus, including the army.

In fact, the new Constitution of Nepal is inclusive in nature with decentralized power designated to provinces and the local governments. Although it ensures democracy, with respect to national security management it has failed to incorporate some of the norms that could have strengthened our security.

First of all, the Nepal Security Council (NSC) does not include the opposition party into it. It is important to understand that national security is not only the responsibility of either the government or the military alone. Basically, the council is composed of all the ministers who are not experts on security.

So, there should have been an advisory committee and the working groups of experts to advise the council. Constitutionally, there is no provision of National Security Adviser (NSA) to advise the council legitimately on military mobilization and to conduct research and analysis on national security lapses and finally to coordinate among the security agencies.

The most complex issue on national security of Nepal is to manage its geopolitical constraints. The coordination and control of national and international power centers are the most challenging for the governments of any nation. In fact, no power center wants to be controlled and intervened by the governments.

Unless the national government monitors and controls such agencies, the indigenous interests cannot be promoted, pursued and preserved against the overriding interests of foreigner powers.

In such a scenario, the autonomous body like NSC could have been provided with constitutional liberty to convince national security bodies as against the governments’ forced intervention on their jurisdiction. Nepal, situated between the two giants of Asia needs tactful diplomacy as a tool to promote own interest that can be wisely advised, coordinated, pursued and preserved under the able guidance of an adviser equipped with a robust team of a think tank like NSC. To make it vibrant, the political will power is must which is seriously lacking in Nepal.

Coming to the geopolitical dynamics again, the rising China and India are the centers of attention for the superpower, USA. China is the biggest rival for it as it is emerging faster. India, too, has a similar pace of development.

Let’s now examine the philosophy and the working style of the political elites, and the Nepal Army whose positive response is a must to make NSC vibrant. Elites have connections with powerful national and international personalities. By nature, every individual is selfish in terms of fulfilling his desires.

Binding to rules and regulations are mostly challenged by those who can break it. In a country like Nepal, this is very common. And mostly, the power centers are captured by such personalities who often exploit the commoners. So, they want the whole nation to move on an ad-hoc basis and oppose even the military to dominate the system. Basically, the Nepal Army was also influenced by like-minded people under the royal regime and then after. In fact, Nepal is a republic now but the mindset of such elites has remained the same.

Coming to the geopolitical dynamics again, the rising China and India are the centers of attention for the superpower, USA. China is the biggest rival for it as it is emerging faster. India, too, has a similar pace of development. So, the USA has an eye to use proxies against China which it had done in the decade of sixties from Nepal. If Nepal is not careful, it can be mired up into another conspiracy.

Notwithstanding all these, PM Oli wants to change the existing constitutional provision of NSC at one side to become more powerful individually rather than strengthening it as a robust institution. His imprudent move can be counterproductive and costly to the nation in the long run.

Entering the world of spirituality is a problem for many, who aspire to go into it. Spirituality is, in fact, latent in every human being. It remains in most cases subdued. In general, people are not aware of its existence. It needs to be opened up. However, some people are naturally oriented toward it. That is why we find some people habitually inclined to it right from childhood. They are considered precocious.

We find precocious children even in other fields of knowledge. All of them are, in fact, exceptional people, who distinguish themselves in their society. However, we need something good for ordinary people. They should be simple and comprehensible.

The consciousness of life brings in the sense of mortality in them. They should realize or should be made to realize, that despite inevitable death, they are alive.

One of the simplest ways to acquaint people with spirituality is to ask them to be aware of their existence. Those who find themselves alive eventually feel that they will be someday dead. Life is related to death. Not that people don’t know about it. But they are often not conscious of it. The consciousness of life brings in the sense of mortality in them. They should realize or should be made to realize, that despite inevitable death, they are alive.

That is a great source of joy. Every moment of this realization is worth a celebration. But we are used to celebrating only one day in a year when we are born. For the rest of the year, we take it for granted that we remain so. In fact, most of the people do not care to be aware of their existence until their life comes under a threat of death due to illness, violence, or a natural calamity. This is one way of orienting people toward their inner self leading thereby to spirituality.

That something is a spirit, a soul, or energy, spelled out in different ways by different people. The fact that Ram is not just a bundle of material stuff leads us to the realm of spirit and spirituality.

Another simple road to spirituality is to pose a question pertaining to one’s identity. Everybody has a name and that is the signature of one’s identity. But does the name give the real identity of man? For example, we present a boy by the name of Ram. We see and show his body as Ram. But what we are observing is different parts of his body, say, his head, limbs, legs and so forth. Can we pinpoint Ram by pointing at any part of his body? Obviously not. Even dissection of his body will only show his internal parts of the body like intestines, heart, liver, and kidney and so on.

The question arises where lies Ram? In answering this question, we have to take into account something beyond the physical existence of his body. That something is a spirit, a soul, or energy, spelled out in different ways by different people. The fact that Ram is not just a bundle of material stuff leads us to the realm of spirit and spirituality.

There is yet another way of entering into the dominion of spirituality by distinguishing the lower spirit from the higher one. It amounts to understand the inner constitution of man. We find two beings identified with ‘I’. One is the doer and the other is an observer. The doer is the lower spirit, who identifies oneself in every act, every reaction and every thought. There is another spirit within oneself, who acts just as an observer. It is higher than the other one as it sits in observing all thoughts and actions going on inside. Ordinarily one is conscious of only the lower self. One who becomes conscious of the higher self is considered to be spiritual.

There is a classic way of explaining it for easy comprehension. One way out of the hundreds, according to Ramakrishna Order, is to understand this inner phenomenon by comparing human life with a gigantic tree, which sends its roots deep down into the bottom of the earth. It is nurtured and nourished by the sap of an unknown Infinite, which is Brahma. Its strong trunk is the trunk of karma, which has been attained, accumulated, through a succession of incarnations. The whole tree is held firm by that trunk.

When it tastes a sweet one, it experiences a temporary feeling of joy and happiness. But immediately that sense of satisfaction is gone, it is hungry again.

Seated at the top of this tree, but not supported by or depending upon it is a bird, self-poised, self-illumined and self-contained. It is always blissful, always cheerful. It never depends upon anything for its existence, happiness, or knowledge. It is radiating brilliance, effulgence; and that heavenly light illumines the tree beneath. This bird never leaves its throne of glory at the top of the tree, for it has no desire, no wants. It has everything.

There is another bird, very similar in appearance, which occupies the body of the tree. It has no fixed place of its own. It is moving constantly and hopping from branch to branch. It is always hungry and restless. The more it eats the hungrier it seems to be. Every moment is spent on finding and tasting new fruit.

When it tastes a sweet one, it experiences a temporary feeling of joy and happiness. But immediately that sense of satisfaction is gone, it is hungry again. It seizes another fruit, which perhaps is bitter. Then it receives a shock and, looking around, it catches a glimpse of the beauty and radiance of the self-effulgent bird above. It feels an attraction and aspires after it. But, in the next moment, it forgets and darts after another fruit.

While moving in search of fruit the restless bird, being attracted unknowingly by the other bird, is slowly moving towards it. When a sense of satiety and satisfaction finally comes, the bird begins to feel disinclined to go round and round in search of fruit. Sometimes it takes a direct flight towards the higher bird and reaches it quickly. But more often the process of approach towards the higher one takes place rather slowly and gradually, until, eventually, the lower bird comes very near the higher one, whose radiance and poise are reflected very distinctly on its personality.

Finally, it is absorbed into the upper bird and loses its separate existence. It realizes that the lower bird was only a shadow of itself. The only reality is the higher bird, which took no active part in the process of growth and development of the tree of life. Our real Self is the higher bird. The lower bird, or our physical and mental systems, is just the shadow of the higher one. Contentment comes from the position of the top bird. That is the attainment of spirituality.

Karnali is one of the major rivers of Nepal. Out of 6 thousand rivers, only 16 rivers are feasible for water recreation business/rafting. Karnali till date is a pristine, perennial and turbulent river of Himalayas.

The river could be a cornerstone for aqua-tourism development of Nepal, and a boon for the far west Nepal. In its 1,080 km (Puramg county of Tibet in China to Gharghar Ganges in India) stretch, its major tributaries are Limi khola, Talung khola (Salli), Kairan khola, Hepka khola, Dojam, Loti Mugu, Mugu Karnali, Kawadi Kholaeti, Tila and Bheri river. Its source also comprises of snow-capped Himalayas. The Karnali River watershed provides a lot of scope and opportunities to the people of Karnali Province.

The Karnali main stem corridor within Nepal (507 km) Hilsa Humla to Sati/Geruwa (Kailali-Bardiya) – can be best used for white water recreation activities. The most adventurous and incredible kayaking and rafting can be found throughout the Karnali River system.

Enriched snaky journey

Whole Karnali river corridor can be divided into two sectors: Hilsa to Jitegadh (Tila-Humla Karnali confluence), except near Chyathara Jharna where Karnali flows under the cover of rock. All the way down Jitegadh to Seti/Geruwa the river is suitable for kayaks and rafting. This river corridor is full of scenic nature and vivid ethnographic culture.

For the comprehensive use of the river, it can be divided into 3 sections. The upper part (Hilsa to Jitegadh) high hills has a high potential for white water adventurous tourism and hydropower generation. The middle hills section (Jitegadh to Chisapani) is good for fishery and rafting, and the low land or lower part (Chisapani to Sati/Geruwa) is good for irrigation, e.g. Rami-Jamara-Kularia irrigation project. For adventurous tourism, the Karnali River is full of mysteriously hidden treasure bursts.

The river originates from Mapcha Khambab glacier on the north side of the Himalaya/Sera Kailas Mansarovar and flows down to the Gangetic plain of India linking three countries (China, Nepal, and India). It also runs along three provinces and nine districts of Nepal. It is estimated that around nine thousands megawatt hydropower (MWHP) can be generated from its tributaries.

Splashes of clear water fly from the surface as the paddlers push through the waves. On the banks of the river, several beaches (river sediments) are available for beach volleyball, frisbee, horse riding, and for camping.

The water quality is good for 53 aquatic species found in the river. Four species of Asala fish – buduna, chuche, and buchhe asala, rare scherzo Thorax, snow trout, rajbam which migrate all the way from the Bay of Bengal, freshwater dolphin, gharial and, crocodile plus water ducks, kingfisher, hutityang, chakhewa birds are all common species that depend on Karnali River system.

The river passes through three types of landscapes with a variety of environments supporting incredible biodiversity, three ethnocultural settlements, several lingua-franca, and religious zones. Therefore, for trekkers and aqua tourists, Karnali River is a unique and hidden treasure.

The original indigenous Tibetan (Lama) culture of the Namkha rural municipality in Limi Valley, Inner and Trans Himalaya and High Himalaya Zones, the Khas-Brahman: Shahi, Sing, Thakuri, Magar of the Fore Himalaya, Middle Hills, and Mahabharat Zone and the Tharu, Rajhi, Majhi, Sonara cultures of the Siwalik Hills and the Gangetic Plain in the Terai – Bardiya  and Kailali and their typical cultural lifestyles are all unique and rare heritages that Nepal offers in order to develop tourism along the Karnali river corridor.

Water sports

As for water sports (kayaking and rafting) in the Karnali river, Jitegadh to Seti/Geruwa section runs along Kalikot Achham, Dailekh, Surkhet, Kailali and Bardiya. From Jitegadh to the Seti Karnali confluence, it is quite adventurous and scenic because the paddlers encounter many rapids ranging up to Class IV+ (four plus) with names such as Sweetness and Light, Jail House, God’s House, Flip and Strip, and Juicer. The river flows in narrow gorges. The crystal clear blue water flows through the sub-tropical (green) jungle and along a panorama of purple, orange, and black colorful rocks.

Splashes of clear water fly from the surface as the paddlers push through the waves. On the banks of the river, several beaches (river sediments) are available for beach volleyball, frisbee, horse riding, and for camping.

Khas, Brahman, Magar, Raji, and Majhi settlements border the journey providing an ethnographic milieu and a colorful mosaic landscape. Along the waterway, paddlers can swim in the river because the river flow at some places is quite calm and without whirlpools. One can also fish on the campsite. Tourists along the Karnali corridor have good accesses to local organic foods, such as green vegetables, local chicken, goat, fish, fruits, and cereals, etc. at a reasonable price.

The rafters are advised to carry a good small dry bag where they can carry and protect cameras for photography and other electronic items, frisbees, and fishing rods. In the evening, they can have a good campfire by collecting firewood deposited by the river at the beach campsites. When camps are near communities, paddlers can enjoy, fresh and dry local fishes, local liquors (chhyang, kodo/makai raksis) at night halts and they can also engage in cultural programs nearby their tent or campsites if they request/inform the locals ahead of their arrival date.

To date, no local company has started a commercial rafting business and whatever the profit is currently enjoyed go to Kathmandu-based tourism entrepreneurs. Currently, even all rafting and trekking accommodations are self-contained and managed by Kathmandu-based companies without using local resources.

This river provides full entertainment and enchantment to the boating expedition teams. However, it has to be kept in pristine condition in its natural setting, i.e.; free flow without disturbance in its corridor. This can be accomplished through the establishment of a protected river corridor (i.e. The Karnali Sacred River Corridor) with an agreed upon code of conduct for river protection.

Unrealized potential

People in most of the settlements along the Karnali river are poor. The reasons behind this are – remoteness, a rocky, unproductive landscape, poor transportation facilities, subsistence mode of agriculture, a decline in the amount of pastureland because of the establishment of a community forest system, no quarantine facilities for trans-border trade with Tibet/China and poor knowledge on ecological and attitude of the rulers/governments. In spite of that, governments of the Karnali area, both at the provincial and local levels, can develop the region by promoting tourism. It is imperative to chart out plans and policies based on the knowledge of ecological ideas and which are compatible or suitable and appropriate to the locally available resources – both natural and human capital.

Among different dimensions of development resources, ecotourism can be one potential product of the Karnali region.  Concerned governments and development stakeholders need to share knowledge and ideas on potential opportunities within the Karnali River Corridor and network.

To date, no local company has started a commercial rafting business and whatever the profit is currently enjoyed go to Kathmandu-based tourism entrepreneurs. Currently, even all rafting and trekking accommodations are self-contained and managed by Kathmandu-based companies without using local resources.

By and large, the Karnali River is full of opportunities and potentials. That development, which focuses on multiple resource values and uses of the Karnali River Corridor has a high potential to enhance the well-being of the local people and bring prosperity to the Karnali region.

These days in Nepal, discussion on the topic of FDI (Foreign Direct Investment) has got momentum from federal capital city Kathmandu to small village and towns, from east to west and north to south, intellectuals to entrepreneurs and industrialists to farmers.

The key issues are lesson learnt, under realization of FDI in comparison of commitment in the previous days, role and importance of investment to achieve the goal of prosperity and happiness, bureaucratic hurdles and lapses in policies to maintain the balance of payment and to reduce the dependence on remittances as well as to downsize the huge size of trade deficit.

The opinions are focussed on the preparation of the Investment Summit as well as the materialization of commitments in projects along with the actual transfer of dollars in the bank accounts in Nepal. In previous years, very less amount was realized out of commitments in summits and talks.

In Nepal, out of the global inflow of the FDI, the share of Nepal is only 0.01 percent. The ratio of annual FDI flow with GDP of Nepal is near to 0.5 percent and the ratio of outstanding FDI-GDP is around 8 percent. Out of the committed amount in the summit two years back, few amounts less than 15 percent only has been realized in dollars.

Globally, people have realized that in the 21st century, the role of FDI is so vital and inevitable to keep the economy vibrant. FDI is an ultimate way to fulfil the funding gap, basically required in industry and infrastructure sector. So, different countries are undertaking their best efforts to attract FDI and are continuing the process of policy as well as procedure reforms.

In this background, the global amount of inflow of FDI has amounted to US$ 1.43 trillion in 2017 with fell by 23 percent in comparison to 2016. However, basic global macro-economic indicators such as GDP and trade have been improved and expanded. This is one the issue of study to find the reason and rationales. Anyway, regarding the declining of FDI in 2017, it is notable that the fell of flows is concerned with developed and transition economies. The flow in developing economies has remained stable. As a result, the share of developing economies accounted for 47 percent of the total FDI. This figure was 36 percent in 2016. Out of the total FDI flow, the share of Asia is around 25 percent and South Asia is at 3 percent.

But, the story of Nepal is different. In Nepal, out of the global inflow of the FDI, the share of Nepal is only 0.01 percent. The ratio of annual FDI flow with GDP of Nepal is near to 0.5 percent and the ratio of outstanding FDI-GDP is around 8 percent. Out of the committed amount in the summit two years back, few amounts less than 15 percent only has been realized in dollars.

In given context to assess the scenario on FDI, it is very important to review major determinants of the realization of FDI. The determinants can be categorized in economic and non-economic factors; political, social, security and financial. Some independent variables like growth rate of per capita GDP, inflation rate, level and quality of information technology, use of digital technology regarding getting approval as well as other transaction with the governments, labour cost per worker in manufacturing industry, degree of openness, risk and corporate top tax rate also influence the flow of FDI.

But much of their functionality could be achieved by better designed, cost-based incentive mechanisms. The SEZs also are continued to proliferate and diversify the industry as well as to broaden the scope of FDI. In addition, investment screening procedures are becoming more common.

Keeping these things in mind over the past 10 years, at least 101 economies across the developed and developing world have adopted formal industrial development strategies to enhance the level of FDI. In the last five years, the actions of the formulation of new strategies related to FDI have been accelerated.

Countries are trying to address the complex issues regarding the industries, their nature and specifics relating to FDI beyond conventional industrial development and structural transformation such as Global Value chain (GVC) integration and upgrading, development of the knowledge economy, build-up of sectors linked to sustainable development goals and competitive positioning for the New or Fourth Industrial Revolution (NIR).

Some countries are on the way of building new industrial revolution based strategies. Many countries are focusing on vertical policies and some are focusing horizontal competitiveness-enhancing policies designed to catch up to the productivity frontier. Besides these, investment policy tools like providing incentives, performance requirements, Special economic zones (SEZs), investment promotion and facilitation as well as screening mechanisms also play a vital role to enhance the quality FDI. Therefore, many countries have given attention to the use of such tools too. Among these, incentive tools are comparatively more familiar. Performance requirement, mostly conditions attached to incentives, are also widely used.

But much of their functionality could be achieved by better designed, cost-based incentive mechanisms. The SEZs also are continued to proliferate and diversify the industry as well as to broaden the scope of FDI. In addition, investment screening procedures are becoming more common.

Thus in many countries, most measures adopted over the past decade are removed or relaxed foreign ownership restrictions, but entry rules or rather procedures have been tightened in some cases through new screening mechanism. In this way, the favorable global investment environment, characterized by open, transparent and non-discriminatory investment policies is being so much effective to attract foreign direct investment.

In the context of Nepal, these reforms keep same importance as per the character of the economy less or more. If Nepal wants to attract a significant volume of FDI as well as domestic direct investment (DDI); since by the nature of the economy and availability of natural resources and need of upgradation as well as the expansion of physical infrastructure and industrial development, the scope and prospectus of FDI and DDI look fine.

Orally, the government is also committed to providing the spaces by policy and implementation points of view. But, the desires of the potential and existing investors are different. They want to have the commitments translated into practice and behavior. Lacking timely decision making and poor coordination as well as the rent-seeking intention of the administrative as well as political bureaucrats is still creating the bottlenecks.

Another vital thing is conflicts and misunderstanding on the way of implementation of federalism that has also created some barriers in the inflow of FDI and action of DDI. Some local governments have imposed the undue tax and non-tax revenues; intentionally or unintentionally. In a few cases, the federal government is also hesitating to fulfill the commitment, basically on the issue of VAT return and providing additional rates on PPA in case of hydro-power projects.

These behavior and hurdles have sprayed confusions in the psychological era of investors. Under this cloudy environment, the government must be serious to erase these confusions and dotted hazards, in a parallel way with further policy and procedure reform as well as the application of new tools and motivating schemes.

Otherwise, investors do not wait for a long time in the hope of having a positive environment. I remember, my grandmother, in my childhood, always would have reminding me and was used to encourage to continue study and go outside, not to stay in the native village and to search opportunities and a good career. Many times she said to me, a tiger never stays in one place without genuine reason.

The same theory is applicable in case of investors too. Without genuine reasons they do not wait for a long time in one country and projects; they always keep themselves with back up new opportunities. So to attract the FDI in due time of committed by the potential investors, the government should work strategically and wisely.