The call from Nepal´s largest umbrella organization of the private sector comes at a time when several political parties have criticized Prime Minister Baburam Bhattarai for signing BIPPA with India during his recent visit to the country.[break]
BIPPA is generally an assurance given by the government to foreign investors to provide compensation if their projects suffer losses due to war, armed conflict, riots, insurrection or the state of emergency. It, however, does not cover losses arising due to non-violent protests launched by workers. So far, India has signed such agreements with 86 countries, of which pacts with 72 countries have already been implemented.
“At a time when the government has declared fiscal 2012/12 as the Investment Year, Nepal should also take initiative to sign the agreement with more countries,” Suraj Vaidya, president of FNCCI, told the media on Tuesday, hailing the recent signing of BIPPA between Nepal and India.
Vaidya said pacts like BIPPA will only bolster confidence of foreign investors and introduce Nepal as another country where investments are safe. A hike in foreign investment contributes to creation of jobs, enhancing living standard of people and growth of economy.
“For instance, if BIPPA is able to attract foreign investment in construction of planned airport in Nijgad and a fast track adjoining the airport, this will generate additional employment opportunities, give a boost to local economies in the area, and benefit banking and insurance sectors,” Vaidya said, urging those protesting the recent signing of BIPPA to take into consideration “the pact´s multiplier effects”.
He, however, clarified BIPPA itself does not guarantee foreign investment into a country and the recent signing of pact with India does not necessarily mean Indian investors will flock to Nepal to start up projects.
“To attract foreign investment, we should also enhance productivity of Nepali workers and focus on strengthening relations between the management and the workers,” Padma Jyoti, former president of the FNCCI, said.
Bhaskar Raj Karnikar, senior vice-president of FNCCI, expressed hope that BIPPA won´t remain a political hot potato by the time it enters parliament as most of the politicians, who were against it, have mellowed after understanding its significance.
Nepal-India trade taskforce
Nepali and Indian businessmen are forming a taskforce to address problems faced by the two countries in sectors such as transit, trade and finance, and hydropower. The decision to form the task force was taken during the 18th meeting of Joint Economic Council (JEC), which comprises members of FNCCI and the Confederation of Indian Industries (CII). The JEC meeting was held after a gap of almost 4 years.
During the meeting, three sub-committees were formed to address pressing issues of transit, trade and finance, and hydropower sectors. The sub-committee will also formulate a long-term plan on enhancing economic relationship between Nepal and India.
"The works of these committees will be overseen by the taskforce which is going to be formed very soon”" Padma Jyoti, former president of the FNCCI, said.
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