Chair of the Programme
Mr. Ji Liqun, President of the Asian Infrastructure Investment Bank
Former Prime Ministers of Nepal
Deputy Prime-Ministers and Ministers in My Cabinets
Distinguished Delegates, Investors, Businesspersons
Friends from Media
Ladies and Gentlemen,
I feel honored to address this gathering of distinguished personalities coming from various countries and organizations at the very first edition of Nepal Investment Summit. This is an important forum that brings government, private sector and foreign investors together to deliberate on the vital issue of investment.
I would like to thank the Ministry of Industry and Nepal Investment Board for making excellent arrangements for this event.
I would like to welcome dignitaries from our friendly countries, AIIB and other organizations. Your presence here is a testimony of your government and organization’s commitment to support Nepal’s development goal.
I see here business leaders, including those who have been driver of success stories in the field of investment in Nepal and those who have successfully steered investment ventures in different parts of the world.
I am more than happy to have with usfellow political leaders from various parties. We stand together to encourage and protect investment in Nepal.
Ladies and Gentlemen
We have witnessed prolonged political transitions. Our struggle for democracy has gone through several phases –through setbacks as well as achievements. And finally, with the promulgation of constitution, we have created a milestone in realizing democratic and inclusive polity.
At this point, we must admit –protracted transition has had serious impact on our economy. Our priorities had been occupied by political issues. Our agendas on economic development couldn’t get the undivided attention.
In the last one decade, our economy grew at a slow pace of 4 percent.
However, I don’t think that the last decade was a lost decade.
We concluded the peace process. We consolidated the achievementsof struggles of Nepali people including People’s Movement and People’s War. We realized the long-cherishedaspiration of our people to write their constitution.
We have strengthened the very base for development –that is democracy.
We have fortified the very base for prosperity –that is peace.
And in our pursuit for development and prosperity, investment is the key driver.
Our peace process is success story of our times. The political transformation is remarkable.
Then why should not we multiply our efforts in creating an economic success story of our time.
What better time it could be than this to fortify our political transformation by an economic transformation.
Ladies and Gentlemen
Our strength lies in these five things:
- the abundance of natural resources.
- high number of low cost human resources.
- growing domestic demand.
- our location between two of the largest markets in the world.
- and liberal policies, laws, institutions and our commitment to rule of law.
We are committed to ensuring an environment conducive to investment by establishing industrial peace and ensuring law and order.
The abundance of resources, both natural and human, and large and growing marketsin our neighbourhood ensure one thing –investment in Nepal is profitable.
Investment opportunities lie in various sectors. Be it in hydropower, agriculture, tourism, service sector, financial institutions, construction and infrastructure connectivity.
We intend to build several (cross-border) connectivity corridors, railways and transmission lines. Establishing new international airports in Bhairahwa, Pokhara and Nijgadh is in our priority.
Similarly we are planning to upgrade the Tribhuwan International Airport in Kathmandu. Investment opportunities are plenty in these infrastructure sectors.
Nepal is making significant strides in information and communication technology. The growing number of English speaking and digitally connected young population is animportant asset. The ICT sector is another area for profitable investment.
To meet our investment needs, we have financial gaps. Our resource base is narrow. To plug such gaps, the importance of foreign investment isparamount.
Ladies and Gentlemen
To spur the economic growth, government is committed to play the role of a facilitator.
However, it is the private sector that is a key partner to enhance investment and lead the economic development.
The Constitution of Nepal has recognized the importance of private sector.
Goal of development can best be realized if the government and private sectors work hand in hand. Aware of this, we have adopted Public-Private-Partnership (PPP) policy.
We have adopted liberal investment and industrial policies. And, we are committed to further streamline them.
Creating an enabling environment for business and attracting investment is our top priority.
We are further rationalizing our policies and procedures to make it simple for business to establish and grow.
Foreign investors are allowed 100% ownership of a company in almost all sectors.
Repatriation of capital and profit is allowed.
Our tax regime is very transparent, predictable and investor friendly.
Vat imposed on production is reimbursed based on quality of exports if such goods are exported.
To make the use of our abundant human resources, we have made reforms in labour sector.
We have set up the Investment Board as well as Industry and Investment Promotion Board to attract, facilitate and manage FDI in Nepal.
As the Chairman of the IBN, I feel pleased to see that FDI commitments in hydroelectric power, tourism and manufacturing are very much promising.
In November last year we adopted Industrial Enterprises Act, 2016.
This Act provides various fiscal incentives to the manufacturing and export oriented industries.
Industries relating to tourism sector, hydroelectricity, solar, wind and bio mass energy enjoy several incentives.
We have provided attractive incentives to investors investing in underdeveloped and less developed region of Nepal as well.
Ladies and Gentlemen
Along with our commitment to create an environment conducive for investment, we have adopted several measures on different fronts and levels.
On domestic legislative and policy front we have a liberal policy regime and specific laws to address investment like Foreign Investment Policy 2015 andTrade Policy 2015.
We have introduced the Special Economic Zone Act required for business-friendly atmosphere.
We are revising the Foreign Investment Technology Transfer Act (FITTA) this year.
The robust and liberal policy and legal regime ensure one thing –the investment in Nepal is safe and secure.
Our commitment to further consolidate reforms ensures one thing –the business climate in Nepal will be more investment friendly.
On multilateral front, we are member of IMF, World Bank, World Trade Organisation and ADB. Similarly, we are also member in the Multilateral Investment Guarantee Agreement (MIGA) of the World Bank.We are one of the founder members in the Asian Infrastructure Investment Bank.
Our participation in various international financial institutions and our international obligations and commitments ensure more stable policy regime.
On bilateral front, we have signed BIPPA and Double Taxation Agreement with various countries.
Similarly, on regional front, we have been actively engagedin regional frameworks like SAARC and BIMSTEC. This is full of prospect in creating larger regional market.
Ladies and Gentlemen
Our commitments and efforts have given us some remarkable results.
In the World Bank Ease of Doing Business Index, we rank second in South Asia.
In the Global Competitiveness Index 2016-17, we jumped up 2 points.
According to the World Economic Forum, Nepal has the best macroeconomic environment in South Asia.
Our global rank in this pillar is 27th.
The private sector is growing. The presence of foreign investors is increasing.
We have seen diversification in the number of sources countries of FDI and sectors of foreign Investment.
Yet, we have much to do; much to achieve. As we aim for achievinga Middle- income country status by 2030, we need more and more investment.
As we are rebounding after the disastrous earthquakes of April 2015, we need more and more investment to build back better.
From this podium, I would like to request to the private sector to avail of the investment opportunities and further build on them.
Let me reiterate that the investment climate is conducive to foreign investors. I would like to invite all the foreign investors to invest here, as well as to those who are operating in Nepal to further increase and diversify their investment.
Similarly, I would like to convey my words to NRNs that –the time has come now to invest your resources and skills for the development of Nepal.
And I would like to appeal to the budding entrepreneurs and vibrant youth of the country –The future of Nepal is in your able hands.
Invest your energy here.
Invest your skills here.
The country needs you most.
Our youths have been contributing to development of various countries. Their hard-earned remittances have significantly contributed to our economy.
However, we cannot afford to ignore the associated cost. We must retain and utilize the energy of our youths at home.
Ladies and Gentlemen
We are aware of the fact that economic distress remains at the core of political instability.
Economic transformation should underpin political transformation. Political gains cannot be sustained if we fail to steer economic development.
How long could Nepal afford to be a poor nation –despite the availability of huge natural and human resources?
How could Nepal lag behind when our neighbours make incredible economic progress?
These are the questions that deserve our immediate answers. Answers from the leadership of all the political parties. Answers from all the stakeholders.
To achieve economic growth and prosperity, political stability is the key. Similarly,economic growth and development help achievepolitical stability. Like thetwo sides of the same coin, these two are inseparable.
Before I conclude I would like to say –we are a democracy; and plurality of political opinions lies at the heart of democratic process.
Like any other democracies in the world, our parties have differences in political orientations and outlook.
But when it comes to development of the country, our voice is one, and we remain united.
When it comes to advancing the growth of Nepali economy, our aspiration is one.
We have consensus in our voice –development agenda should remain a national priority, beyond and above party interests.
Now, our priority is in rapid and inclusive growth. Investment is the key to realize this goal.
Finally, I would like to reaffirm my belief that this Summit will come up with innovative and practical ideas to boost investment in Nepal. Moreover, this summit will convey the message that -emerging out from a prolonged transition Nepal is ready to take-off as a major investment destination.
I wish all success of the summit.
2 March 2017