Experts suggest addressing key impediments to attract FDI

Nepal must abolish the lengthy foreign direct investment (FDI) approval process, minimum investment requirement, expatriate work permit system, and simplify currency repatriation procedures to attract more foreign direct investment to the country, recommended investment experts.
Countries that have addressed key impediments like lengthy FDI approval process and started fast track procedures with no unnecessary screening, and created a level playing field have attracted more FDI, according to World Bank data, they said during a workshop on 'Making Investment Competitiveness for Nepal a Reality', jointly organised by Nepal Investment Board and SouthAsia Enterprise Development Facility, managed by the International Finance Corporation, in partnership with the UK government and Norwegian Agency for Development Cooperation, here today.
An investment policy will help increase the government's dealing capacity and provide a predictable investment climate for investors, said Global Lead Specialist - Investment Promotion at the World Bank Group Robert Whyte, presenting a paper on 'Investment Competitiveness in Nepal'.
The policy will also help manage a relationship between different stakeholders and balance the interest of investors, civil society and the government, he said, adding that FDI alone, however, does not guarantee development, it's the right investment policy that does.
Recently, Nepal has focused on regulatory reforms to attract foreign direct investment. According to the streamlined procedural reforms in 2012, processing time of the approval has come down to 10 days from the earlier 30 days, and the time for internal procedure has also come down to seven days from a total of 22 days, earlier. "The government has been revising various Acts and laws to make it investor-friendly," said chief secretary Leela Mani Paudyal, inaugurating the workshop.
Though the country is passing through a political transition, the government has come up with various reform measures to attract investment, he said, citing the examples of the new Industrial Policy and the Foreign Investment and Technology Transfer Act that is in the pipeline to be revised, apart from the establishment of the Investment Board as a one-window solution for investors.
The Investment Board decided to fast track mega hydel projects, yesterday, to encourage investors.
Speaking on the occasion, president of Federation of Nepalese Chambers of Commerce and Industry Suraj Vaidya highlighted the importance of marketing the country's prospectus to attract more FDI. Likewise, president of Confederation of Nepalese Industries Narendra Kumar Basnyat said that the government's role is to boost the confidence of the private sector for more investment.
The experts, during the day-long workshop also stressed on boosting the confidence of the domestic private sector that can link with foreign investors and help the government bring foreign investment in the country.
Nepal had attracted foreign direct investment inflow worth $95.49 million in 2011, which was $8.75 million more than the $86.74 million it had been able to attract a year back, according to UNCTAD’s World Investment Report 2012 — that had ranked Nepal at 175th in foreign direct investment Attraction Index 2011 from the 178th ranking a year back among 182 economies.