newbusinessage/Main%20News/1633 FDI: More Promise, Less Work --By Sagar Ghimire The Nepal government’s policy to allow foreign direct investment to improve Nepal’s economic prospects has Lured foreign investors to come to Nepal to register joint ventures in various sectors, mainly the tourism and service sectors. However, they are yet to release funds to kick-start their projects. Economists and industrialists attribute the government’s apathy and labour unrest behind foreign investors’ reluctance to start their ventures. The number of companies with joint ventures has increased. However, unlike what was anticipated, their investment has not contributed much to boost Nepal’s economy. According to data from the Department of Industries (DoI), 300 joint ventures were registered with DoI by the end of FY 2012-13. The total cost of these 300 projects amounts to Rs 32214.18 million, of which foreign investment has summed up to Rs 19398.14 million. Data shows that investors are most attracted towards the tourism sector followed by the service sector. Among those registered, 87 have been registered for the tourism sector, and 85 for the service sector. Foreign investors have a share of Rs 4525.03 million only in a total investment worth Rs 12417.2 million on 77 manufacturing industries registered at the DoI. Agriculture, Energy, Mineral and Construction are four other sectors among seven that have drawn foreign investment to Nepal in joint ventures. These sectors have promised Rs 852.01 million, Rs 2134 million, Rs 584 million and Rs 100 million, respectively, from foreign investors. The 300 ventures registered at the DoI estimate to create 14, 895 job opportunities. Among these registered projects, Chinese investors own the highest number of ventures among investors from 42 other countries to invest in Nepal. Their total investment amounts Rs 2627.40 million. However, in terms of volume, investors from the British Virgin Islands have the biggest figure of Rs 4497.40 million. This is followed by investment from Hongkong worth Rs 3070 million. However, all of these investors have not started their respective ventures. Dinesh Shrestha, Chairperson of the Industrial Department at Federation of Nepal Chambers of Commerce and Industry (FNCCI), blames the government for not forming a favourable policy towards prompting foreign investors to kick-start their ventures immediately. “They are in a wait-and-watch-mood,” he says, adding that the government should take a lead in inviting them to begin work. “A favourable policy would mean drafting laws and formulating policies like the Foreign Direct Investment Act and the Special Economic Zone Act, among others,” he explains. Asked why foreign investors are not much attracted to the manufacturing sectors, Shrestha argues that the pitiable conditions of manufacturing industries in Nepal might have signaled to them that investment in this sector will not have promising returns. “Our own national factories are on the verge of collapse; how can we expect foreigners come immediately and invest in sectors that have high risk?” he questions. Shrestha, however, claims that foreign investors will start working as soon as the business environment will be in their favour. Prithvi Raj Ligal, former Vice-chairperson of the National Planning Commission, agrees with Shrestha. “Labour unions, lack of foresight in the government, lack of consistent policies and the power crisis are also equally responsible for discouraging foreign investors to come and start their ventures immediately.”
Posted on: Mon, 19 Aug 2013 09:10:42 +0000
Trending Topics
Recently Viewed Topics
© 2015