KATHMANDU:  A conducive environment for investment in Nepal has been created, according to Minister for Foreign Affairs, Pradeep Kumar Gyawali.

He made the remark while chairing the first session on ‘Investment Opportunities in Nepal’ under the Nepal Investment Summit 2019. He added that different laws have been formulated in a bid to attract investment.

Minister Gyawali was quick to add that Nepal is a virgin land for investment.

‘Investment-friendly act, hardworking youths and favorable political environment would make it easy for domestic and foreign investors to invest in Nepal,’ he said.

KATHMANDU: Prime Minister KP Sharma Oli has said that Nepal is a virgin land for investment.

Inaugurating the summit at Soaltee Crowne Plaza in the capital on Friday, Prime Minister Oli said, Nepal is a virgin land where immense opportunities are awaiting your investment to uplift the living standard of 30 million honest and hardworking people.

Addressing the summit, Oli said the environment is stable and remains fully committed to protecting your investment with assured profit.

“There is a conducive environment now following the promulgation of the constitution and the successful conduction of the three tiers of the elections – federal, provincial and local,” Oli said, urging the guests to explore and share the abundant opportunities Nepal can offer.

Stating that Nepal is a second home and a place of your constant interest, and a hub of your business, Oli urged the guests to jointly explore and share the investment opportunities that Nepal can offer.

Tourism, hydropower, infrastructures including roads  and agriculture are the sectors potential for investment, said Oli.

Nepal government is hopeful that the summit will bring an investment of over Rs 30 trillion in the country through 77 different projects.

Over 600 international guests from over 40 countries are taking part in the two-day summit.

Read the full text of Prime Minister Oli’s address to the summit below:

KATHMANDU: The much-hyped International Investment Summit 2019 is taking place in the capital from today.

Nepal will be showcasing 77 projects – 50 from the government side and 27 from private sector – in the summit to be participated by over 600 guests from 40 countries.

Nepal is hopeful that the two-day summit will bring investment worth over Rs 30 trillion through 77 projects in the country.

However, the government’s expectation seems a bit ambitious given the statistics of  foreign investment it received over the last three years. Nepal received foreign investment worth Rs 37 billion during the period which is far less than what was expected.

Investment Board Nepal has informed that the invited guests from internal companies and financial institutes  arrived in Kathmandu on Thursday itself.

The past couple of days have witnessed heated media discussions on the two-day ‘Investment Summit Nepal-2019’ starting from today.

This is the second such summit preceded by the one held in 2017. The first summit had brought about 250 foreign investors securing letters of intent worth Rs. 13.74 billion.

The imminent summit is larger in scale in the sense that it is being participated by 600 investors from 40 countries. The summit titled ‘A Promising Investment Destination’, shall showcase a total of 77 projects in various sectors, worth $31.93 billion.

Criticisms facing the summit

Media is replete with a negative appreciation of the summit. Even before its commencement, the summit has invited a heap of negative comments. Many argue that it shall be a mere perfunctory summit for a number of reasons.

Others argue that the country is ill-prepared to invite Foreign Direct Investment (FDI) due to lack of friendly laws and regulations addressing prospective foreign investors. As such, it is too early to hold an ambitious investment summit.

The crux of all such arguments is that the country utterly lacks enabling investment environment. Security tops the list. Some point out that the violent activities by the ‘Biplav’-led Maoist outfit is ominous to an ideal investment climate in the country as it may gradually escalate to the level of violent Maoist insurgency (1990-2006).

Others argue that the country is ill-prepared to invite Foreign Direct Investment (FDI) due to lack of friendly laws and regulations addressing prospective foreign investors. As such, it is too early to hold an ambitious investment summit.

The inception

However, it should not be forgotten that efforts have been made to attract FDI in the country even before the 1980s, according to a Nepal Rastra Bank (NRB) report.

There were a few instances of foreign investment and technology transfer in the country before 1980. An investment promotion was meeting was organized in 1984.

Likewise, Nepal Investment Forum was held in 1992, according to NRB.

Investment Summit in the first week of March in 2017 had witnessed the commitment of USD 13.74 billion in ten sectors by 26 companies from eight countries.

Silver lining

As aforementioned, this summit is bigger in volume. Besides negative appraisals, the summit has some positive aspects as well. We are yet to see how the government shall resolve the issue of ‘Biplav’ outfit. Barring this, the investment climate seems to be improving in terms of policy and regulatory measures.

The government has made a number of improvement on laws and regulation in a bid to attract foreign investment. Some of them include that technology transfer is not a barrier for all types of industries in Nepal, laws have guaranteed repatriation in foreign currency, private sectors are allowed to develop and operate Special Economic Zones.

Similarly, companies can adopt “no work, no pay” system, and strikes and protests at companies are not allowed.

Regulations require a mandatory accident and health insurances for all employees and that companies are allowed to hire foreign nationals in managerial positions.

Nepal offers a golden opportunity for investors to exploit rich water resources by exporting electricity to India and Bangladesh under the existing regulation. One can dig gold in Nepal by investing in tourism, herb processing or the other number of projects being showcased at the summit.

Likewise, among other number of policy changes, investors are entitled to business and residential visas.

Nepal’s robust economic health can be another attraction for FDI. The country’s GDP growth rate has remained almost 5 percent in the past decade. It has witnessed a per capita growth rate of 8 percent in over a decade.

Similarly, the country has a foreign reserve to finance imports for up to 10 months. Besides, the country has 57 percent of the working age population.

Conclusion

Nepal is still a virgin land in terms of infrastructure development. The country requires a massive infrastructure development works to graduate to the level of a developed country.

Thus, it can be a fertile ground for countries statured with infrastructure development to not only try their technology and tools on the various infrastructure development of Nepal ranging from transportation to energy but also to reap benefits through investment.

Nepal offers a golden opportunity for investors to exploit rich water resources by exporting electricity to India and Bangladesh under the existing regulation. One can dig gold in Nepal by investing in tourism, herb processing or the other number of projects being showcased at the summit.

Yet, to truly realize the goal of this summit, the government needs to work in doing away with the hassles of red-tapism and corruption besides enacting more investment-friendly acts and rules.

KATHMANDU: Prime Minister KP Oli secured 20 unit shares of the Trishuli III B hydropower project.

The project has been launched under the government’s ‘People’s Hydropower Program’.

His spouse Radhika Shakya secured 20 units. PM Oli and Shakya had applied for 10,000 units of share each.

The Ministry of Energy, Water Resources and Irrigation announced the decision to allocate the project’s shares to the applicants.

Similarly, Energy Minister Barsha Man Pun secured 20 units, while his spouse and former Speaker Onsari Gharti received 20 shares. Secretary of the Ministry, Dinesh Kumar Ghimire got 20 units.

Of the total applicants, 50,267 received 30 units of shares each, and 145,559 received 20 units of shares, according to Paras Mani Dhakal, chief executive officer of Global IME Capital.

KATHMANDU: Prime Minister KP Oli has reiterated the government’s priority on good governance and development.

PM Oli said there is no option to speedy and multi-dimensional development to realize the goal of ‘Prosperous Nepal and Happy Nepalis’.

Inaugurating the 8th International Trade Fair 2019 organized by the Federation of Chambers of Commerce and Industry (FNCCI) in Kathmandu today, the Prime Minister dubbed Nepal as a country with abundant possibilities for development.

He expressed the commitment to give more priority to domestic investment. He, however, emphasized on giving equal priority to foreign investment and technology since domestic resources were not enough for the country’s development.

Prime Minister Oli also assured the private sector that the government was willing to work in tandem with them.

Around 85 domestic stalls, and 90 stalls from China, 40 from Bangladesh, 10 from India, and two from Pakistan are kept in the exhibition that will run until April 1.

KATHMANDU: Prime Minister KP Sharma Oli has got 20 units of shares of the total 10,000 units of shares he had applied for under the Upper Trishuli-3 ‘B’ hydro project.

Oli had applied for 10,000 units of shares under the much-hyped people’s hydro-power project that had been announced publically.

The shares were allocated at the Ministry of Energy amid a special program today. A large number of applicants had applied for shares.

As many as 104,292 applicants have received 20 units of shares each while 50, 267 applicants have got 30 units of shares each, a source at the ministry said.

A total of 154, 624 people had applied for 64,552,900 units of shares.

NEW DELHI: Google.org has funded 2 million USD to empower students and teachers by advancing the use of high quality, open source, video resources.

Google.org funded the amount in 2018 through a Central Square Foundation, a grant making organization and policy think tank, focused on improving the quality of school education, and learning outcomes of children from low-income communities in India.

Education gap persist in India, where 50 percent of students in 5th grade cannot read a 2nd-grade text or do a two-digit subtraction problem. Supplementary instruction or self-study through video has shown to be an effective tool to help students improve, and Indian students are eager to improve–roughly 85 percent of upper primary and secondary students receive some form of private coaching.

But a variety of barriers such as infrastructure, lack of curriculum alignment, and an insufficient amount of available content, has limited the role of video in helping Indian students learn key concepts.

Google is granting support from Google.org and technical volunteer assistance from YouTube employees. The Central Square Foundation will launch a video content accelerator to empower the next generation of educational video creators in India.

The accelerator will directly support more than 20 educators with the funding and training they need to produce more than 200 hours of quality science, technology, engineering, and mathematics (STEM) content in Hindi and vernacular languages.

The accelerator will also work to scale its reach by developing a hub to share best practices such as tips on how to create engaging videos and guidance for aligning lessons with curriculum and standards with the sector at large.

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.

KATHMANDU: Nepal Investment Summit 2019 is taking place in Kathmandu on Friday. Nepal government is trying to seek foreign investment in various sectors including agriculture, energy, education, tourism, and infrastructure.

Nepal is showcasing over 77 projects – 50 governments and 27 – in the summit whose estimated cost would come around Rs 30 trillion, Kantipur daily reported.

The summit will witness over 600 participants from over 40 countries, according to Investment Board Nepal (IBN). Finance Minister Yuba Raj Khatiwada said that preparations have been completed.

Maha Prasad Adhikari, Chief Executive Officer of IBN, said that the summit will showcase a total of 77 projects to attract investment in Nepal.