Foreign investors interested in hydropower, urge to improve doing business indicators
The visiting experts and investors in the Nepal Economic Summit have shown their interest in investing in hydropower sector. However, they have urged the government to improve the business climate of the country.
Nepal needs to introduce number of reforms to improve country's doing business indicators, they said, suggesting to reduce lengthy documentation process and improve bureaucracy to attract more foreign investment.
Lengthy documentation has made the investors shy away, said vice-chairman of Standard Chartered Bank for Asia Thomas Harris, speaking at a session in the second day of the Nepal Economic Summit 2014 here today. "Documentation process of 14 days for export/import in Nepal is the longest in South Asia, he said, citing reforms undertaken by the Philippines in recent years. "Reform in administrative process will help bring in foreign direct investment."
Nepal is ranked 105th in Doing Business 2014 report, down from last year´s position of 103. Easing the doing business will help attract more investment in Nepal, Harris added.
Likewise, global investment promotion specialist at World Bank, USA, Robert Whyte, on the occasion, suggested Nepal government to be serious toward investors. "The government officials should reduce consignment import and export costs paid for processes and public offices apart from removing the provision of going around seven to eight ministries for license to start business in the country," he added.
As Nepal ranks second last in the list of South Asian countries, after Bhutan, in terms of Foreign Direct Investment (FDI), clear policy and strong regulatory body will drive foreign investment, said president of Non-Resident Nepali Association Sesh Ghale. Urging to create investment friendly environment in the country, he said that lack of clear policy and regulatory body for foreign direct investment coupled with business-unfriendly bureaucracy have driving foreign investors away.
Foreign Investment and Technology Transfer Policy of 1992 is outdated and it needs immediate revision,” Ghale added.
Former finance secretary Rameswor Khanal, on the occasion, prescribed a gamut of reforms like simplifying process to register businesses to process of liquidation of businesses.
Likewise, experts also discussed on government's failure in commercialisation of agriculture sector due to small landholdings, system of inheritance that have fuelled land fragmentation in recent years.
Average landholding of a Nepalis is 0.68 hectare, which is small for the commercialisation of agriculture, the experts said, adding that the sector needs more attention as some 77 per cent of the total population is dependent on agriculture.
Executive chairman of South Asia Watch on Trade Economics and Environment (SAWTEE) Dr Posh Raj Pandey asked the government to emphasise on strong implementation of policies while commercialising agriculture.
The stakeholders including government, farmers, trading and cooperative organisations and other private sector players must go hand in hand to strengthen the agricultural sector in a unified manner, he suggested.
Agriculture growth rate of Nepal during 2008-12 stood at 4.06 per cent, whereas in Pakistan it was 2.20 per cent, 2.80 per cent in India and 4.14 per cent in Bangladesh.
The expert panel also stressed on infrastructure, market, technology and information – that play a pivotal role in boosting agriculture – to commercialise the sector.