Atul Keshap is a distinguished retired American diplomat and career United States Foreign Service Officer. Since January 2022, he has held the prestigious position of President of the US-India Business Council at the US Chamber of Commerce. Additionally, Keshap serves as the Senior Vice President for South Asia at the US Chamber of Commerce and as President of the US-Bangladesh Business Council. Keshap is currently in Kathmandu, leading the US Chamber's delegation to the Nepal Investment Summit 2024. Republica Editor Kosh Raj Koirala spoke to him to get more insights into various issues including the views of US investors on Nepal's investment climate, areas of potential investments in Nepal and the challenges and opportunities seen by US investors in Nepal. Excerpts:
How does the US Chamber of Commerce view Nepal's investment climate and potential for business growth?
Nepal had a very tough political situation in the past, especially during the Civil War era. Then, you had that very terrible earthquake, and then the pandemic. So you've had some very tough times. But if you look at what is happening now in Nepal - there is relative political stability, you have got a growing GDP and a growing per capita income; the stock market, too, is growing. And the government is introducing policies to streamline inbound investment. I think there's some interest. And one of the reasons why the US Chamber delegation has come here is that there is interest in seeing what is going on in Nepal. And, people are noticing the government's rhetoric.
I had a very good meeting with Prime Minister Pushpa Kamal Dahal on Saturday morning. And I met with the finance minister on Friday. And the message is clear that they want to create conditions that will attract investment; they recognize there is a global competition for investment dollars. Foreign direct investment is good for jobs; it is good for taxes, it is good for wealth creation, and it is good for competition. And so they're trying to attract that. And there are a few areas that they've identified and American companies are interested. One is, of course, hydroelectric power. The other is tourism. And, the third is information technology. The government also mentioned agriculture, education, health care; these are all promising areas. My message to the government is that if they create a smooth path for investment, people will notice.
What role do you think the Nepal Investment Summit 2024 will play in promoting Nepal as an attractive destination for foreign investment, particularly the investment from the US?
Every country is playing the FDI game, including the United States where President Joe Biden and the US government are very keen to have American investment come home, and reindustrialize. It is true in India, it is true in China, Vietnam, and Mexico. Everybody wants foreign direct investment. The member companies of the US Chamber of Commerce have trillions of dollars of investable dollars that are available. So, what Nepal is doing is essentially signaling to the world that it is open for business; that it is having an investment conference, that it wants to hear from potential investors, that it also wants to show potential investors what it can do and what is possible. And, as long as the government takes steps to streamline the regulatory process, the legal process, the tax process, such that investments come and investors feel safe to come in and all that, I think you can transform your economy, and you can have a greatly increased standard of living.
Nepal’s performance on ease of doing business worsens
What are the key areas or sectors in Nepal that you believe could attract US investment?
First of all, the key dimensions are ease of doing business and the speed of doing business. So, how much the regulations can be streamlined to really interest American companies is important. You know, we have American digital economy companies that are worth trillions of dollars that are looking at Nepal, and they're looking at the regulatory framework in Nepal. Now, those companies are digital, they can be anywhere in everywhere. So, you don't want to create regulations that scare them off, or chase them away. You want to create regulations that bring them in, that encourage them to invest to hire. You know, they have hired hundreds of thousands in Nepal’s neighborhood. I think Nepal has a very young and capable population that could do very well. So, getting the regulatory mix is critical, you know, getting it right - taxation, regulation, issues related to data etc. If you look at what's happening in the neighborhood, and in the United States, countries that are careful about how they regulate data are very good at attracting these big American companies.
But if the restrictions are too strong, then it gets tough, right? The other thing is, like in electricity, if Nepal can streamline and enhance its policies on the sale of hydroelectric power to third countries, then I think you have a tremendous opportunity for investment. In fact, it is clear that Nepal is the Saudi Arabia of hydroelectric power. And, if you can sell it in your neighborhood where countries are growing at 8% 10%, then you can make a lot of wealth for your country. And, if you do that and create a sovereign wealth fund, and build up a sovereign wealth fund like Norway has done, like Abu Dhabi has done, you can pay for everything your people need for the next 50 years.
Which sectors do you think US companies are interested in Nepal?
Hydroelectric energy and tourism are the big ones. But there also could be FinTech and this again, depends on regulations. Look at Singapore. Singapore comes up with the best regulations in the world. Singapore has more FDI than the whole of ASEAN combined; more than Indonesia, Malaysia, Thailand, the Philippines, etc, combined, because they have the best regulations. You can overcome even your geographic issue of being in a landlocked location with attractive regulations.
What challenges do you foresee for US companies looking to invest in Nepal? How can those challenges be addressed?
Now that we live in a digital age, the geographic issues become less important in certain types of industries. What the companies are looking for is predictability. Predictability is very important. If you make an investment today based on a certain policy framework, then that framework should remain the same for the next 10 or 15 years. Tax predictability, regulatory predictability, ease of doing business, getting clearances from the government etc are important- you know how many clearances you need in order to hire people, establish a business and get your company going. The Nepal government news to address these issues. When I had the meetings with the officials, it was clear that they are focused on the ease of doing business and the speed of doing business.
You had meetings with Prime Minister Pushpa Kamal Dahal and Finance Minister Barsha Man Pun. Can you share with us what transpired during these meetings?
Well, I was bringing the greetings of the US Chamber of Commerce, which is the world's largest business advocacy organization. And, I was telling them that we are interested to see what is happening in Nepal, and that we are glad that they are having this investment conference that I could participate in along with my colleagues, and that we have American corporate interest in what's happening here. So, I was very positive. And, I told them the same thing I have told you - that ease of doing business, speed of doing business are critically important for attracting FDI.
I also told them that we have a new AmCham in Nepal. It has been three years running. It's been accredited. And AmCham, an American Chamber of Commerce, is critically important for representing the interests of American companies to the government and to give constructive and positive and respectful suggestions for ways to ease things and make it smoother and easier. So, they were very receptive. They were very positive. They were very friendly. They are glad that we are here. We hosted Minister Pun in Washington last week for a very nice meeting. And, we will keep that conversation going. The AmCham here is wonderful. They have 48 members. They are a part of the US Chamber of Commerce. And, we are very happy that they are here. And hopefully, that will create dynamism and energy because AmCham and the companies they represent help build the prosperity of the countries they are in. And the FDI they bring is at the highest level of ethics, and managerial, technological, environmental standards. They help build a strong country.
Well, look at MetLife. They have been here for 22 years and they have coverage in this country for millions of people. And, they have helped improve the financial lives of people all across Nepal. They have branches all around Nepal. The chairman of the AmCham Nirmal Shrestha is the chairman of MetLife here and they are a positive member of the community; they pay their taxes. So, they are a very responsible stakeholder. They have been helping improve the competitiveness of the insurance ecosystem. And then, they work closely with the government in a very collaborative manner.
That is just an example. But you know, like MetLife, we have companies that are doing very advanced IT work as well, companies working with Hollywood in the US. Of course, the big tourism names, I mean, we're sitting here in American brand new hotels or other American branded hotels. So, there's plenty of American activity. Coca Cola has been in Nepal for more than 50 years, and they have hired thousands of people and they have distribution networks all around this country. And they have helped work on the movement of food products around the country beverages, So, you can see American companies help build and strengthen and make Nepal more prosperous. I want to tell that story and say that if you create an easier investment climate, if you speed up government processes, you will have even more American companies come and your GDP will go up.
As Senior Vice President for South Asia at the US Chamber of Commerce and head of the delegation, what are your expectations from the investment summit in terms of strengthening the ties between Nepal and the US?
There are half a million people from the Nepalese diaspora who live in the US. They are very great representatives of the people of Nepal and the people of the US in both directions. So, what I am hoping from this investment summit is that the government continues to signal that it will take reforms, that it will take steps to reform the investment processes and create a model investment framework so that investors have a very clear sense of how they go through the system, expedite the process for inbound investment so that they inspire people around the world. And, the other thing is the power of a good example. If I am an investor in the US, and I hear about what happened at the Nepal Investment Summit and I take a chance on whatever investment I decide to make. If I am successful, I will tell other people. So, you need models, you need a poster child of successful investment in Nepal. I have mentioned companies that have done very well. You need more of those examples. And I think it is a good opportunity for the government to focus on following through.
So you have the big announcements; the messaging is very clear from the government. It's pragmatic; it's very pro-FDI and pro-investment. Now, the follow up is critical. And, we're happy to work as partners along with the American Chamber of Commerce to offer ideas for how you make it easier for business. And, this is not about us making money. It is about all of us prospering. Nepal gets revenue, Nepal gets employment, Nepal gets increased GDP, it gets increased connectivity to the world of global commerce. And our sincere desire is to see the people in Nepal take full advantage of the demographic dividend - a very strong populace, young people, smart people, hard working people - these are the golden years for your country to grow.
Do you have anything else to say to our readers and our policymakers?
I last visited here 10 years ago when I was in government service. And, of course, there was the terrible earthquake, but the country seems to be revitalized. And, you have so much advantage in the strength of your people. My prayer for Nepal is that it will become a middle-income country as soon as possible. And, they can do that through foreign direct investment and partnership with companies from all around the world who want to work here and do business here.
