Monday, August 6, 2012

Frame competitive FDI Policy: Experts

The government should frame a competitive Foreign Direct Investment (FDI) Policy to attract investment in the country, according to former bureaucrat.
"The country has to frame not only a Foreign Direct Investment Policy that boosts confidence of investors but also should be competitive as there are other nations also that are trying to attract investment," said former industry commerce and supplies secretary Bharat Thapa during the consultation meeting among the stakeholders organised by USAID/NEAT, Ministry of Industry and Federation of Nepalese Chambers of Commerce and Industry (FNCCI) here in the Valley today.
"The government should also start investment and export targeting to map the output of the policies and performances," he said, adding that the investors are discouraged not due to lack of formal bottlenecks but the informal ones. "The Policy also should try to address the informal barriers."
The government prepared draft Foreign Direct Investment (FDI) Policy — to update the earlier one — has envisioned a separate board — Foreign Investment Promotion Board — to facilitate investment process too. It has planned to offer dozens of benefits including tax rebates, discount in taxes and easy passage to transfer profit to foreign land.
"The Policy must give an easy access to entry, operate and exit," Thapa added.
The Policy has also offered different facilities according to nature of industries or businesses, apart from guarantying one trade union in an enterprise, special treatment — Commercially Important Person— to big investors and simplification in land acquisition.
"It has a complete package to small to big investors," said team leader of consultants and former advisor to the Finance Ministry Keshav Acharya.
"We have developed the Policy offering competitive benefit to our neighbouring countries," he said, adding that special preference has been given to those, who invest in the country's priority sector like hydropower, infrastructure, agro and herbal processing industries and tourism.
"But it has certain conditions," he said, adding that the foreign investment will not be accepted for the hotels below three-star and in priority sector projects' investment must be above Rs 150 million.
Similarly, it has barred foreign investment in retail trading below Rs 5 billion.
However, the entrepreneurs and expert said that the Policy alone could not create investment-friendly environment. "The Policy alone can not attract foreign investment," coordinator of Investor Promotion Forum of FNCCI Chandra Dhakal said.
Instability, labour dispute and energy crisis have made the investors shy away from the country, he said, adding that the Policy is good, if the government is committed to create enabling environment for investment. He also suggested highlighting geo-physical benefit of the country to attract investment. "The Policy should also be brought on time."
The bureaucrats also stressed on need of capacity building of related agencies to implement the policy. "The government needs an efficient structure to implement the Policy," said joint secretary of Ministry of Industries Anil Kumar Thakur.

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