Nepal, a post-conflict nation, has entered into a new era of development and social transformation. At this specific juncture of her history, economic wellbeing is crucial for society’s political and social transformation. Any attempt, in this direction, by any institution or friend of Nepal should be welcomed. Nepal’s prosperity and stability will not only help her but also is bound to have affirmative impact on her next door neighbors and possibly on to regional economic escalation. Although, there are a few but harsh limitations posed by her landlocked-ness, Nepal has been blessed with huge natural as well as archaeological resources gifted by human civilization and nature herself. But unable to tap these resources, Nepal, as one of the least developed nations, has been struggling for her economic fortunes. Against this setting and at the onset of a trade and investment delegation from UK to Nepal, scheduled for October13-18, it would be in context to make an attempt to shed light on investment conditions and potential areas of investment in Nepal.
Policy Measures
Nepal, a party to World Trade Organisation (WTO), is a member of regional and global arrangements. Nepal has been actively participating in regional organizations such as South Asia Free Trade Agreement (SAFTA) and Bay of Bengal Initiative for Multi-Sect-oral Technical and Economic Cooperation-Free trade Area (BIMSTEC-FTA). Nepal has enacted a number of legislations including the Competition Act, Insolvency Act, New Company Act, Cyber Act, Foreign Investment and Technology Transfer Act (FITTA) and is member to World Bank promoted Multilateral Investment Guarantee Agency (MIGA) - that guarantees the investors from non-commercial risks, in order to promote and protect foreign investment and facilitate repatriation of their profit. Moreover, the Special Economic Zone (SEZ) Act and Board of Investment (BOI) Act are in the offing. As a country that enjoys a vibrant private sector, Nepal has one of the most liberal foreign investment regimes in the whole region that is committed to attract and facilitate foreign investment.
Followed by an increased level of confidence among investors, Nepal Government gave permission to 1431 foreign investment projects in 2008 with the total project cost of Nepali Rs. 114.24 billion. Likewise, in fiscal year 2009/10, the government gave approval for the incorporation of 171 joint venture projects with foreign investment equivalent to Nepali Rs. 9.1 billion. The bottom line: Nepal enjoys a vibrant private sector and has one of the most liberal foreign investment regimes in the whole region, committed to attract and facilitate foreign investment.
Location & Infrastructure
Nepal is an attractive investment destination not just due to its policy measures and her abundant natural resources but also because of her strategic location between the two soaring economies of the world: China and India. Nepal’s location proffers an ideal setting for foreign investors interested to do business in these countries. Nepali products enjoy easy access to these big markets. Availability of English speaking young population, expanding facilities of the Information Technology (IT) coupled with an abundant yet comparatively cheap labor force with potential to develop their skills, make the Himalayan nation much more investment-friendly land. In addition, Nepal itself offers a good market for foreign goods and services as some six million people, constituted by middle and higher classes, have got 7 billion pound sterling spending capacity per annum.
Partnership & NRN
The Nepali émigrés in the UK, which is represented by the Non-Resident Nepalis (NRN), is an industrious and skilful community. This community is increasingly becoming global in its aspiration and is also a tactical resource in this connection. The same applies to the business community in Nepal as both of them are eager to establish partnership and develop formal links with UK businesses community for investment and bi-lateral trade purposes. Given United Kingdom and Nepal’s nearly two centuries old warm and cordial relationship and the service being offered by ‘the bravest of the brave’ Gurkhas to the British Crown and her subjects, an enlargement of trade and investment ties by assembling available resources in both countries will indeed help further deepening bilateral relationship.
Possible Areas of Investment
Tourism is one of the major investment sectors in Nepal. Apart from scenic beauty, flora and fauna; hundreds of thousands of tourists visit Nepal every year for climbing the mighty Himalayas. They are also attracted by other tourist destinations of cultural and archaeological importance. Birth place of Lord Buddha, the Kingdom of Janak, birth place of Goddess Sita and the temple of Pashupatinath are worth mentioning here. The Hindus living abroad, who are as good as Europeans and North Americans in terms of spending capacity, consider the temple as a most sacred place to be visited in their life time. Besides tourism, another area of investment could be the hydro sector. Nepal’s fresh water sector is huge and rich. It is estimated that Nepal has potential of harnessing eighty three thousand Megawatt power. Of the eighty thousand, forty three thousand megawatt is feasible. Two other components, associated with water sector, are irrigation and drinking and they need to be integral part of power projects to be permitted. Since the fresh water is a scarce resource globally, investors can tremendously benefit out of it. Other potential areas that might interest investors include production of herbal medicine, health and sanitation, exploration of energy, infrastructure development projects such as road construction, communication and adaptation to climate change and disaster management.
Nepal, in spite of her landlocked-ness and some other limitations, offers a mammoth opportunity for trade and investment. Nepal is an investment friendly nation due to its liberal policy measures, commitments to regional and global economic regimes, natural resources and also because of her strategic location between two soaring economies of India and China. The proposed trade and investment delegation from UK to Nepal, which is of its first kind in view of its stature and composition, could prove to be a milestone in economic ties with the UK.
The writer is Nepal’s Ambassador to the UK
Related story
Biden’s ‘Welcome Corps’ Announcement an Opportunity for Bhutane...
