Experts urge to remove minimum threshold for foreign investment
Experts today called on the government to remove threshold on minimum investment.
They also asked to remove list of restricted industries and encourage more foreign investment.
Addressing a discussion on the draft of Foreign Investment Policy 2014 organised by Samriddhi-the Prosperity Foundation -here today, former finance secretary Rameshwor Khanal said the threshold should not be made a criterion for bringing foreign investment. "The criterion should be employment generation, production capacity and export-base for foreign investors rather than minimum investment threshold,” Khanal said, adding that the threshold will only keep foreign investors away.
Though, there is no minimum thresholds for sectors like construction of technology park, higher education particularly in the areas of health, technology and vocational training, and establishment of polytechnic institutes that produce manpower with intermediate skills.
According to the draft Foreign Investment Policy 2014, foreign investment of less than $200,000 will not be accepted in any sector, though minimum thresholds in the sectors may vary.
The draft – that is expected to replace the Foreign Investment and One-window Policy 1992 – has proposed preventing foreign investors from funding hydropower projects that generate less than 30 megawatts of electricity. But it has not set any floor for investment in construction of the transmission lines.
"Foreign investors will be allowed to fund transmission line projects based on a benchmark created by the government,” it stated, adding that a minimum threshold of $10 million has been fixed for investment in transport and other infrastructure.
Likewise, a minimum threshold of Nepali currency equivalent to $2 million has been proposed for investment in agro, herbs processing, export-based and mining industries, and industries that help in substitution of imports.
The draft policy has also proposed Department of Industry as an agency that can settle any dispute in industries with foreign investment. "The government would refer to United Nations Commission on International Trade Law, if the department fails to settle the dispute."
"Likewise, the restriction on foreign employee will also discourage the foreign investment," he said, "It might be logical to restrict blue-collared employees but there should not be any restriction on higher level or top management staff."
Asking the government to review the list of industries restricted for foreign investments, Khanal said that there is no point restricting foreign investment in security printing at a time when we are printing banknotes in foreign country. "The government should provide incentives to foreign investors interested to open hotels in rural areas."
However, industry secretary Krishna Gyawali, defended threshold on foreign investment.
Likewise, former finance minister Madhukar Shumsher Rana suggested the government to include firms producing fertilizers, assembling automobiles, and substituting import of petroleum products in the priority list.
The draft prioritises hydropower, infrastructure, agro and herbs processing industries, tourism, minerals and manufacturing industries.
Senior economist Prof Dr Bishwambher Pyakuryal asked the government to review why the priority sectors
The draft policy – that aims at attracting huge investment for big industries – has also proposed setting up a one-stop service centre to help foreign investors acquire land, get foreign exchange facility, conduct environment impact assessment, import various goods and equipment, and secure visas for themselves and foreign employees.