The news that Indian investments to Nepal decreased to US$25 million in the last five years from US$70 million in the same period earlier is extremely worrisome. This does not bode well for an economy that is teetering on the brink of disaster and is in dire need for economic activities such as fresh investments that would generate jobs and income for the teeming millions.
But we cannot run away from the fact that the situation we are in is of our own creation. No sane entrepreneur would want to invest in a country that is reeling under massive power deficit, mired in labor unrest and has a very weak infrastructural base. Indian companies have an even bigger disincentive to invest in Nepal as they have regularly been on the firing line of UCPN (Maoist). Not very long ago, the party went on an anti-India campaign and attacked companies with Indian investment such as the Upper Karnali Hydropower Project. Furthermore, soon after UCPN (Maoist) concluded its sixth plenum late last year, it declared India as its principal enemy. Such a move on the part of the largest party in the country would obviously scare away potential Indian investors.
While many of the grievances of the political parties, such as the Maoists, against India on the political front might be valid, they should also learn to refrain from unnecessarily mixing politics and economy every time. India is one of the fastest growing economies of the world and both countries stand to accrue unprecedented benefits through robust economic engagement. At the same time, we should also have the humility and the grace to accept the fact that we need them more than they need us.
One area in which many Indian companies have shown interest in investing is hydropower. This, we think, is something that should be welcomed with open arms. If we are in no position to invest in mega projects, we should at least be sane enough to allow someone else to invest. The investments can extend further to other sectors such as agriculture to tourism. At a time when our Balance of Payments deficit is increasing by the day, we must take every possible measure to invite Foreign Direct Investment – not least from India – so that we can maintain a healthy balance between our exports and our imports. We must operate keeping logic at the forefront, not emotions—it will take us nowhere.
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