Nepal Investment Year: Govt speeds up preparations

KATHMANDU, NOV 06 -

With some concrete developments taking place on the political front, the government has intensified preparations for the Nepal Investment Year (NIY).

The government and the private sector on Friday decided to set up a high-level mechanism to be lead by the prime minister to carry out the preparation work.

Prime Minister Baburam Bhattarai has announced that the government will mark the years 2012 and 2013 as investment years. An executive committee including top government officials and private sector representatives will be formed for the execution of the NIY preparation work.

There will also be two separate secretariats at the Ministry of Industry (MoI) and the Federation of Nepalese Chambers of Commerce and Industry (FNCCI). The secretariats to be set up soon will facilitate the NIY preparation and other administrative and secretarial work. “The secretariats will help address the bottlenecks to FDI,” said FNCCI President Suraj Vaidya. The secretariat at the FNCCI will be headed by its president.

Vaidya said the country seeks to double foreign direct investment (FDI) during the investment years. Nepal attracted FDI worth Rs 10.04 billion in last fiscal year—10.43 percent higher than that of 2009-10.

According to Industry Secretary Shankar Koirala, the Friday’s meeting also discussed various measures to resolve legal and practical problems being faced by investors—local or foreign. “We have decided to bring flexibility in policy related matters, bureaucracy and incentives,” said Koirala.

As part of the NIY preparation, the MoI in partnership with FNCCI is currently working on identifying 50 potential projects, mainly in the areas including hydropower, infrastructure, mining, service sector and tourism.

The peace agreement between political parties has been a boost to optimism among investors. But even before that, potential foreign investors had been making trips to Nepal to take stock of investment opportunities here. In the last six months, there foreign trade delegations—from the US, UK and Czech Republic—visited the country.

Members of the American Chambers of Commerce in India (ACCI) had shown their eagerness to establish businesses and industries in Nepal, particularly in infrastructure, IT, food, beverage, agro products and agro industries sectors, while the British delegation was interested in hydropower, agriculture, distribution, IT and education sectors.

Of late, the government has made efforts to reach out to the potential investors and address their concerns. The recent signing of the Bilateral Investment Promotion and Protection Agreement (BIPPA) with India is an example. The government is gearing

up to reach the agreement with other countries too.

With the visiting trade delegations expressing concerns about Nepal’s regulatory framework and difficulties in raising funds from international financial institutions to invest here, the government will also make necessary amendments to the Foreign Investment and Technology Transfer Act, Industrial Enterprises Act and Labour Act.

The British trade delegation during an interaction with government officials was more concerned about the regulatory framework, difficulties in raising funds from international financial institutions to invest here and access to markets.

Source: Kantipur