KATHMANDU: Showcasing a total of 77 different projects worth $31.93 billion in various sectors, the government is all set to host the Nepal Investment Summit on March 29 and 30 in Kathmandu.

Themed ‘A Promising Investment Destination’, the two-day summit, aimed at demonstrating the country’s improved business atmosphere to potential foreign investors, will showcase 50 government-owned projects and 27 other projects from the private sector, according to the Investment Board Nepal (IBN).

The IBN said around 600 investors from 40 countries will participate in the summit. The summit is also aimed at attracting and convincing the foreign investors to invest in Nepal at a time when it has a stable government.

The summit will also include deliberations on investment opportunities in the above-mentioned sectors besides focusing on opinions from experts and investors to bring in investment here in areas of physical infrastructure, energy, information technology, agriculture, industry, health and education, and tourism.

The country’s Federal Parliament has already endorsed the Public-Private Partnership and Investment Bill with an aim to creating an easy and smooth environment to foreign investors.

A total of 25 energy and infrastructure-related projects, 17 projects related to tourism and 11 related to the transportation sector will also be presented during the summit to realize the government’s goal of “Prosperous Nepal, Happy Nepali”.

Similarly, the summit will be showcasing a total of eight agricultural projects, seven projects related to urban development, and six industrial sector-related projects. Likewise, the government will also put forth three projects relating to education and the health sector.

The IBN said the main objective in the summit will be to demonstrate the improved business climate of the country in recent years to potential investors. “The summit will focus on transforming the political and policy stability into trust among the domestic and international business society.”

The summit will also include deliberations on investment opportunities in the above-mentioned sectors besides focusing on opinions from experts and investors to bring in investment here in areas of physical infrastructure, energy, information technology, agriculture, industry, health and education, and tourism.

The summit to be inaugurated by Prime Minister KP Oli on Friday will see ministers of different ministries briefing about the country’s current favorable investment climate.

Maha Prasad Adhikari, CEO at the IBN informed that rather than sharing information on theoretical aspects, they would provide a complete package about projects to the potential investors.

The IBN, which coordinates the summit, has listed and finalized several projects worth Rs 3.1 trillion such as West Seti, AR-6; Sunkoshi II and III, Lower Arun, Nalgadh Hydropower Project, Tamor Water Reservoir Project, and SR-6 for joint-venture.

Likewise, projects such as Kathmandu-Pokhara Railway, East-West Electric Rail, Kathmandu Metro Rail, and Gautam Buddha International Maternity Hospital, would also be showcased in the summit.

To be inaugurated by Prime Minister KP Oli on Friday, the summit will see ministers of different ministries apprising participants of the country’s current favorable investment climate.

It should be noted that the first summit held in 2017 bringing around 250 international investors, succeeded in securing Letters of Intent (LoIs) worth Rs. 13.74 billion from foreign investors.

KATHMANDU: Three vice presidents from the World Bank (WB) group said they will be participating in Nepal Investment Summit to be held on March 29-30.

Hartwig Schafer, Vice President for World Bank for the South Asia Region; Keiko Honda, the CEO of Multilateral Investment Guarantee Agency (MIGA); and Hans Peter Lankes, the Vice President of the International Finance Corporation (IFC), are visiting Nepal.

Schafer said that he will be discussing about investment options during the Summit. He is hopeful that the Summit will attract private investment and attract more investment in Nepal, which help to create jobs, to be the engine of growth, help Nepal prosper.

Likewise, Honda said that the Summit will be a significant milestone to achieve government’s vision. She labeled Nepal as a ‘rising star’ of South Asia, with Foreign Direct Investment flows reaching a record high. “This confirms Nepal’s efforts to improve its investment climate,” Honda said on a social platform.

Similarly, Lankes said they were working closely with the Government of Nepal to identify key sectors with strong potential for economic growth. “Some of our recent recommendations focus on important cross-cutting policy reforms, including land, regulatory, and access to finance areas as well as investment in public goods that could stimulate development,” said Lankes.

Investment Summit is a popular way to reach out tremendous Foreign Direct Investment (FDI) resources of the world. In the summit, international and national potential investors are gathered. The government presents its promising priority projects based on themes to interact and to generate curiosity, interest, and promise of the investors for the proposed projects.

It depends on how much the government is smart to win the investor’s confidence through investment-friendly fiscal and monetary schemes and security. In 2017, the government of Nepal initiated the investment summit after a gap of 20 years. The Investment Summit 2019 has an objective to make Nepal a promising investment destination with the expectation of 30 billion USD funneled in five key sectors: agriculture, energy, infrastructure, tourism, construction, and aviation.

There are queries on the preparation of Nepal Investment Summit 2019 and on the success of the summit itself. However, the government insists FDI is a cure to problems like the declining share of agriculture and industry to the GDP, poor infrastructure, sluggish export trade, and unexploited natural resources.

Approximately 50 projects are to be showcased including that of private sectors. Like as the Investment Summit 2017, the government expects the participation of more than 50 companies. For this, the government has amended laws on a fast track without much deliberation in the parliament, tried to repair physical infrastructures, and has initiated security assurance by imposing a ban on the activities of the ‘Biplav’-led Maoist outfit. There are queries on the preparation of Nepal Investment Summit 2019 and on the success of the summit itself.

Macro-Economic Indicators

The government of Nepal has a catchy slogan of ‘Happy Nepali, Prosperity Nepal’ in its budget in the current fiscal year. However, macro indicators including non-spending capital budget and rocketing imports led to a wide negative balance of payment, high unemployment rate and decreasing foreign currency reserve.

The growing general acceptance of corruption at the government level pushed the country into the 3rd rank on the corruption perspective index. Therefore, the perspective of FDI inflow is not positive. It is further complicated by the falling HDI and tax barriers reflected in the doing business index.

However, the government insists FDI is a cure to problems like the declining share of agriculture and industry to the GDP, poor infrastructure, sluggish export trade, and unexploited natural resources. The government says FDI, by solving these problems, shall ensure higher employment and economic growth. As such, this summit appears ambitious.

Laws Amendment Preparation

The government recently amended four acts out of which the Foreign Direct Investment and Technological Transfer Act 2019, is the most important one. The act is very important to create an investment-friendly environment and in boosting investor’s confidence. It was not enacted through parliamentary discussion. Thus, there is a higher possibility of flaws, errors, and mistakes in it. Its effectiveness, relevancy, and efficiency can surface as a big issue and could prove costly to the investors.

National Consensus

Whatever be its motive, the government ignored the need for national consensus in holding the summit by not the opposition on board. Nobody knows about the next government and its policy. Therefore, there is a big possibility of risk and cost of inconsistency and repatriation provisions to the investors in the long run. Therefore, the investor’s confidence in risk and marginal cost per unit production and service is challenged. Similarly, the conversion rate from the commitment to FDI to the reality may be lower than our expectation.

Investment Climate

At the given state of things, the government needs to amend more than 20 laws and regulations as part of creating an investment-friendly environment to woo investors. In fact, two laws and regulations related to FDI and technological transfer are in place. Creating investment climate is difficult in lack of other laws.

Maybe our preparation was insufficient or maybe the investors had no sufficient reasons to invest in Nepal or maybe the post follow up seriously lacked.

Insecurity Issue

The government ban on the ‘Biplav’-led Maoist faction has once again created a sense of insecurity among the industrial communities. There is a fear that the Biplav faction may once more invite insurgency similar to the decade-long Maoist war between the government and the security forces. This is driven by the bombing activities of the Biplav group targeting Ncell.

A lesson from the 2017 Summit

In this context, the last summit in 2017 may be an open book to learn lessons for this summit.

In 2017, the Investment Summit’s priority sectors were agriculture, energy, ICT, tourism, education, health, mine and minerals, and transportation. About 26 companies, out of 48 companies committed to investing 13.74 billion USD in 10 sectors. China (8450 mil USD) was first followed by Bangladesh (2400 mil USD), United Kingdom (1000 mil USD), Japan (1000 mil USD), Sri Lanka (500 mil USD) and India (360 mil USD).  There were six sectors: (1) Infrastructure (13), Energy (13), Manufacturing (6), Agriculture (5), Health (5) and Banking and Financial (2). Around 250 foreign investors had participated in the summit.

The summit appeared as a successful national event since the investors had committed 13.74 billion USD, which, however, did not materialize. The achievement remained as a mere media hype.

Maybe our preparation was insufficient or maybe the investors had no sufficient reasons to invest in Nepal or maybe the post follow up seriously lacked.

Options on the eve of the summit

Let us hope this summit, despite whatever the government’s preparation and initiation, will be successful with a higher rate of FDI commitment transpiring into reality. For this to happen, the government should immediately to work in fixing the regulatory measures and in creating an investment-friendly environment so that the investors can execute their plan into reality in the Nepalese soil.

The government should seriously work on one window policy, zero corruption, enforcement of law and order, and in guaranteeing the repatriation, among others.

But before that what matters most is how the government presents itself and performs in the summit. Managing logistics, hospitality and information dissemination during the summit are also of crucial concern.

KATHMANDU: The Department of Tourism has collected revenue amounting to Rs 30.9 million in four days from the mountain climbing permits. The Department has been issuing the permit for spring since March 23.

Rameshwor Niraula, a section officer at Department’s Mountaineering, said over Rs 30.53 million has been collected from the permit for the Mount Everest alone while the rest is from the peaks.

The Department till Monday had received applications from over 15 expeditions for the climbing permits and requests from nine teams have been already approved. The permits include the Everest (8,848 meters), Lhotse ( 8,516 meters), Annapurna ( 8,091 meters), Kumbhakarna ( 7,710 meters), Mount Pumari (7,161 meters), Thapa Peak ( Dhampus- 6,012 meters) and Chhopbamari. The deadline for seeking the permit will remain in effect until mid-April and the number of climbers will go high in numbers.

In 2018, the total of 107 expedition teams was granted the permits for spring and among them, 34 were for the Everest. Climbing royalty for the Everest, the world’s highest peak, differs according to seasons. According to the Department, a foreigner has to pay US dollar 11,000 in spring while this fees is US dollar 5,500 for autumn.

Nepal has opened 414 mountain peaks for climbing and still over 1,300 are suitable for climbing.

PARIS: At a time when the US-based aircraft manufacturer Boeing is strolling following crisis involving it jetliner 737 MAX, its European rival Airbus has said it has strike a deal with China to sell 300 passenger jets, international media reported.

The agreement to that end was reached during Chinese President Xi Jinping’s visit to France, CNN reported. China is major market for airline manufacturers and Boeing and Airbus face tough competition.

The order covers 290 planes from the A320 family and 10 from the A350 line, the statement said, adding the deal was a sign of strong demand from all areas of China’s rapidly expanding aviation market, including “domestic, low cost, regional and international long haul”.

The government is bracing up for the third Nepal Investment Summit starting from March 29. It will showcase about sixty projects requiring an investment of around USD 30 billion. However, nothing can be said whether foreign investors will be interested to invest in these projects. Lessons from past events tell us that heavy foreign investment cannot be realized until there is a sound investment climate in the country.

The first investment summit in 1992 did bring some foreign investment so that the country achieved a growth rate of seven percent. The second investment summit held in 2017 was able to bring only USD 180 million out of USD 14 billion committed. The low level of investment corresponds to the low level of credibility of the government and poor investment climate.

As of 2011, Nepal had the highest minimum wage in South Asia (US$83.76 per month), followed by Pakistan (US$82.17 per month), India (US$ 64.07 per month), Sri Lanka (US$51.22 per month), and Bangladesh (US$40.46 per month).

Access to market, transparent and predictable legal environment, security, and quality infrastructure are some of the preconditions to attract foreign investment in any country. Unfortunately, none of these elements in Nepal are in good shape. Despite its location in the middle of giant markets, Nepal is unable to reap benefits either from the huge Indian or the Chinese market.

Exports of Nepalese products to the Indian market is not easy. It is an open secret of how India discourages exports of Nepalese products. Often Nepalese goods are held at the Indian checkpoints along the border disrupting the smooth flow of goods. Neither the prospective foreign investors nor the diplomatic missions stationed in Kathmandu are uninformed of this fact.

Nepal lags far behind compared to its South Asian neighbors in terms of its infrastructure development. For example, while India’s road density is 142 km per 100 square km, Nepal’s road density is only 34 km per 100 square km. Similarly, Nepal’s rank is 117th in world infrastructure quality index compared to the 27th position of Sri Lanka, and the 61st position of India. It is not just the case of roads, other infrastructures such as electricity, water supply, and communication are also not strong enough to attract FDI.

Another obstacle in inviting FDI in the country is the low labor productivity but high minimum wage of Nepalese labors. In the past, we said that investors will come to Nepal thanks to its low labor cost. But currently, the labor cost of Nepal is one of the highest in the region. As of 2011, Nepal had the highest minimum wage in South Asia (US$83.76 per month), followed by Pakistan (US$82.17 per month), India (US$ 64.07 per month), Sri Lanka (US$51.22 per month), and Bangladesh (US$40.46 per month).

According to the Global Wage Report 2018/2019, the average real wage growth for the period of 2008-2017 in Nepal is 4.7 per month that is slightly less than in India (505%) and more than in Sri Lanka (4%), Bangladesh (3.4%), and Pakistan (1.8%).

Forthcoming investment summit is being organized without improving the investment climate. As evidenced by the recent doing business report, the environment for business and investment is deteriorating in the country.

On the other hand, according to the Asian Productivity Organization (APO) databook 2017, the productivity of Nepalese labor is only 21% compared to that of Sri Lankan labor and 46% in contrast to the Indian labor. High minimum wage and low productivity make production in Nepal very costly.

The third major obstacle to invite FDI in Nepal is its fragile security situation. Extortion, frequent strikes, rowdy and militant trade unions are common in Nepalese industrial sector. The recent bombing in the Ncell premises and the government’s decision to ban the ‘Biplab’ led Maoist party has again raised suspicion on the security situation of the country.

Governance-related issues such as rampant corruption, lengthy entry and exit process for companies, lengthy visa process for foreign workers etc. are other hurdles for foreign investment. It is found that a foreign worker needs to put more than 30 signatures in terms of paper works for obtaining work permit and visa. Besides, it takes as much as 3 months to complete the process.

Forthcoming investment summit is being organized without improving the investment climate. As evidenced by the recent doing business report, the environment for business and investment is deteriorating in the country.

It appears that the government selected the projects to be showcased in the summit without thorough homework. For an investor, a genuine reason for investing in Nepal at this time could be to benefit from India’s removal from Generalized System of Preferences (GSP) program by the USA, and from the India-China trade conflict. Yet, the dream of FDI influx in the country is least likely to materialize given the existing investment climate.

Given the stark reality of investment climate, the upcoming investment summit bespeaks of a mere ritual that the government is happy to perform with full fanfare. However, as a responsible citizen, we welcome the investors in Nepal hoping that they may perhaps persuade the government to create an enabling environment for making another such summit a success.

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

KATHMANDU: The government of Nepal is set to present a total of 66 projects ranging from Rs 640 million to Rs 350 billion for investment during the Nepal Investment Summit 2019 to be held in Kathmandu from March 29-30.

The government has recognized eight energy-based big projects for achieving prosperity. Energy, physical infrastructure, agriculture, information technology, industry, health and education and tourism are the areas of the special focus for investment.

Nalgadh Hydropower Project; AR-6; Sunkoshi II and III; Tamor Water Reservoir Project; West Seti; Lower Arun; and SR-6 have been listed as projects for joint-venture.

According to the Nepal Investment Board, the list of projects worth Rs 3.1 trillion was finalized this Sunday. The Board owns up the responsibility of coordinating the summit. The Board will inform the summit about latest progress about the 456-megawatt Upper Tamakoshi Hydroelectricity Project.

This time, investors will be provided a complete package about projects, instead of sharing information only on theoretical aspects as the government is determined to make it a promising one. This summit will be different from the past one, Board CEO Maha Prasad Adhikari said.

Prime Minister KP Oli has been invited for the inauguration of the summit. Similarly, ministers of different ministries and industrialists would brief about Nepal’s recent situation and investment environment.

The Federal Parliament has passed the Public-Private Partnership and Investment Bill with an objective of creating easy and smooth environment to foreign investors. Similarly, the Federal Parliament has already passed Bill to amend and integrate laws related to foreign investment and technology transfer, Bill designed to amend Special Economic Zone Act-2073.

Projects like East-West Electric Rail, Kathmandu-Pokhara Railway, Kathmandu Metro Rail and Gautam Buddha International Maternity Hospital would be presented as ‘showcase’ in the summit.

Similarly, projects–Trishuli Galchhi, Upper Chameliya, Myagdi Khola are also the attractive projects. Service would be provided to investors through single point at the Investment Board with an objective of providing easy service to them.

A total of 173 billion in foreign investment has been brought in within seven months of the current fiscal year.

KATHMANDU: Nepal and Japan signed a memorandum of cooperation (MOC) on a basic framework for hiring “specified skilled workers” on Monday.

Joint Secretary at the Minister for Labor, Employment and Social Security Ram Prasad Ghimire and Japanese Ambassador to Nepal Masamichi Saigo signed the MOC at a program in the capital.

With the agreement, the process of hiring Nepali workers will begin from April 1.

The Japan government will open Japanese Information Center in the capital like the EPS Korean Section established by by Korean government in Nepal.

The ministry has expected that this job will comparatively be more impartial and lucrative as the Nepali workers will enjoy pay perks and other benefits on a par with the Japanese citizens.

Manpower agencies will not be involved in the process.  Nepali workers will be supplied to Japan through the government mechanism.

Japan has prioritized four sectors in the first phase – health, industry, caregiver and agriculture sector.

KATHMANDU: Prime Minister KP Sharma Oli has said the government will bring the fiscal budget of the year 2019/20 in line with the federal set-up.

Speaking at a parliament meeting in New Baneshwar on Monday, Prime Minister Oli said the government is preparing to bring the upcoming fiscal budget  to address the needs of the three tiers of governments – federal, provincial and local.

He further said that the government is also working on a long-term vision, aimed at transforming the country into a developed nation by 2043.

“The government is preparing to introduce a 25th -Year-Plan starting 2076 BS to 2100 BS for the development and prosperity of country,” said Prime Minister Oli.

At a time when Pushpa Kamal Dahal alias ‘Prachanda’ last week was flying to the US for the treatment of his spouse, Sita, speculations were rife in Nepal that Prachanda, who led the decade-long Maoist insurgency in Nepal, could face legal hurdles over alleged human rights violation in the US.

The party — once labeled as a ‘terrorist’ outfit by the US government – was delisted from the list of the global terrorist group in 2012.

The US government “makes its terrorist listings based on facts and unless the group is actively engaged in terrorism that is a threat to US interests, it won’t be re-added to the terrorism list”.

Khabarhub talked exclusively to Jason M. Blazakis, former Director of Counterterrorism Finance and Designations Office, Bureau of Counterterrorism, at the U.S. Department of State, to know whether there would be any change on the US position if Dahal assumed the Prime Ministerial post here. Jason ruled out any change on the US policy now. “This is very unlikely to occur in my view,” he said.

According to him, the US government “makes its terrorist listings based on facts and unless the group is actively engaged in terrorism that is a threat to US interests, it won’t be re-added to the terrorism list”.

Jason was the Director of Counterterrorism Finance and Designations Office, Bureau of Counterterrorism, at the U.S. Department of State when the US government removed the Maoist party from the list of the global terrorist group.

In his former role, he was responsible for directing efforts to designate countries, organizations, and individuals as terrorists, also known as State Sponsors of Terrorism, Foreign Terrorist Organizations, and Specially Designated Global Terrorists.

Jason, who is also a terrorism expert, and devises strategies to prevent terrorists from gaining access to money and publicity, said the State Department “removed CPN-Maoists from its listing as a terrorist group pursuant to Executive Order 13224 because the party had begun the process of political reform”.

Currently, Professor of Practice at the Middlebury Institute of International Studies at Monterey, USA, Jason stated that at the time of delisting, there were “no recent acts of violence that could be directly attributed to the group”.

Regarding Dahal’s visit to the US, Professor Jason, who is also the President of Riptide Threat Mitigation Group, Inc., a geopolitical risk consultancy, said he “did not have any concerns if the trip was made in accordance with U.S. law”.

“The decision to delist the group should be not be viewed as US acceptance for the group’s terrorist past and violence misdeeds,” he told Khabarhub adding that the delisting was about encouraging the group to become part of a legitimate political process.

Regarding Dahal’s visit to the US, Professor Jason, who is also the President of Riptide Threat Mitigation Group, Inc., a geopolitical risk consultancy, said he “did not have any concerns if the trip was made in accordance with U.S. law”.

“The Maoists are no longer labeled as a terrorist group,” said Jason, who previously held positions in the Department of State’s Political-Military Affairs, International Narcotics and Law Enforcement Affairs, Intelligence and Research Bureaus, and at U.S. Embassy Kabul.