Foreign investment pledges down 31pc
KATHMANDU, MAY 10 -
Foreign direct investment (FDI) pledges have plunged even as the government has been trying to attract massive foreign capital by marking Nepal Investment Year 2012-13.
According to the Department of Industry (DoI), FDI commitments to Nepal declined more than 31.03 percent as of the first nine months of the current fiscal year to Rs 5 billion from Rs 7.25 billion during the same period in the last fiscal year.
Foreign investors registered 124 enterprises during the review period compared to 109 last year. FDI commitments have come in sectors like manufacturing, energy, service, tourism, mining and agro-based enterprises. The highest commitment has come for manufacturing followed by the energy sector. “We are extremely surprised by the figure,” said Bipin Raj Bhandari, director and head of the FDI department at the DoI. He added that the number of inquiries received at the DoI from potential foreign investors had also gone down this year.
However, this has not surprised the private sector. “This is really a strong hint to the government which plans to attract large amounts of FDI just a year later,” said Hemanta Dawadi, director general at the Federation of Nepalese Chambers of Commerce and Industry (FNCCI). “It is urgent for the government to review its foreign investment policy.”
He also criticized the government for not letting the FNCCI determine 50 projects with huge FDI potential. The Investment Board has been assigned to finalize the 50 projects that can be promoted in the international market. However, the board is yet to complete the project.
According to DoI officials, Nepal received investments from China, India, the US, Norway, Austria, Japan, Canada, South Korea, Thailand, the Netherlands and the UK during the review period. The country has so far received the FDI from 71 countries across the globe.
Ram Saran Chamoriya, spokesperson for the DoI, said out of the total 124 enterprises registered, Indian and Chinese investors have registered the largest number of firms—40 and 32 respectively. “Investment commitments from these two countries account for more than 50 percent of the total,” he said. Indian investors have proposed to invest Rs 2 billion while planned Chinese investments are worth Rs 1.6 billion.
Out of the total number of enterprises registered, 25 are related to manufacturing and they are expected to create 5,000 jobs. Meanwhile, the DoI has registered 50 service-oriented enterprises with a potential for 1,000 jobs. Similarly, 20 tourism, 10 mining, 10 agro-based and nine energy-based enterprises have been registered.
According to UNCTAD’s World Investment Report unveiled in July 2011, Nepal ranks 134th in the FDI Inflow Index. The report also revealed that even among the least developed countries, Nepal is at the bottom of the heap in attracting foreign capital.
Source: The Kathmandu Post
