Improve doing business indicators to bring FDI: Experts

KATHMANDU, Feb 26 :

Experts have underlined the need to introduce number of reforms to improve country´s doing business indicators.

They have also suggested downsizing layers for securing investment permission and appointing investor-friendly bureaucrats to bring more foreign direct investment (FDI).
Speaking at the Nepal Economic Summit 2014 here on Tuesday, Thomas Harris, vice-chairman of Standard Chartered Bank for Asia, pointed out lengthy documentation process in export and import as the major problems facing investors in Nepal.

According to the World Bank´s Doing Business 2014 report, consignment transportation cost across the boarder stands at US$ 2,295 per container in Nepal compared to South Asian average of $1,787. The amount includes 895 paid for documentation and customs clearance, ports and terminal handling.
He said documentation process of 14 days for export/import in Nepal is the longest in South Asia.

Citing reforms undertaken by the Philippines in recent years, Harris stressed the need to reform administrative process to bring foreign direct investment.
Nepal is ranked 105th in Doing Business 2014 report, down from last year´s position of 103. The Philippines was ranked 108th in 2014, up from last year´s 133.
Robert Whyte, global investment promotion specialist at World Bank, USA, said the Nepal government should be serious toward investors. He suggested Nepali government officials to reduce consignment import and export costs paid for processes and public offices as well as remove the provision of going around seven to eight ministries for license to start business in the country.

According to an official at the Ministry of Industry, foreign investors have to wait for a minimum of one month to receive license to establish an industry and register a company with investment of up to Rs 2 billion. “It takes months to get license for industries with investment of more than Rs 2 billion as investors will have to approach the Industrial Promotion Board,” the official added.

Nepal ranks second last in the list of South Asian countries, after Bhutan, in terms of FDI.
Sesh Ghale, president of Non-Resident Nepali Association, expressed disappointment over lack of investment friendly environment in the country. “Lack of clear policy and regulatory body for foreign direct investment as well as unfriendly staffers are driving foreign investors away,” added Ghale.
Ghale has started building a five-star hotel in Kathmandu in partnership with the Sheraton Hotel.

“Planned development strategies have been shortened to three years from five years. Similarly, Foreign Investment and Technology Transfer Policy of 1992 is outdated and needs immediate revision,” said Ghale.
Former finance secretary Rameswor Khanal said the process to register businesses should be made simple. “Not only that, the government should also simplify the process to liquidate businesses,” he added.

Source: Republica