As reported by IBN Dispatch, the Nepal Investment Summit 2024 seeks to bolster private investment, encompassing Foreign Direct Investment (FDI). The event aims to spotlight Nepal’s enhanced investment climate, underscore the government’s unwavering commitment to legal, regulatory, and procedural reforms fostering investor confidence, and showcase compelling investment prospects across diverse sectors.

However, the World Bank data for 2022, reveals that Nepal’s FDI constituted a mere 0.2 percent of its GDP, a decline from the 0.5 percent recorded in 2021. In contrast, the average for lower-middle-income countries stands at 1.4 percent. Drawing comparisons, Rwanda, often regarded as a development success story by Nepali academics, attracted 3 percent of its GDP in FDI during the same period. This statistical landscape underscores Nepal’s struggle to entice sufficient foreign investors. Recognizing this challenge, the government is strategically preparing for the upcoming Investment Summit. The summit serves as a crucial platform to not only exhibit potential investment opportunities but also to allure foreign funds. 

The overarching objectives are multifaceted, aiming to stimulate economic development by emphasizing the importance of domestic investors, non-resident Nepalis, and foreign investors alike. Also, the summit seeks to foster networking opportunities and create an environment conducive to sustained growth by amending over a dozen laws essential for attracting and retaining foreign investment. 

Shortly after the declaration of the Investment Summit for 2024, Axiata Group stunned the market by selling its 80 percent ownership in Ncell to Spectrlite, marking a significant move just seven years after entering Nepal’s telecommunications sector. The Malaysian multinational telecommunications conglomerate formally declared its intention to part with its NCELL stake on November 30, 2023. Simultaneously, Habib Bank, a long-standing FDI partner, exited Nepal after three decades. While reasons remain undisclosed, these exits highlight challenges for foreign investors in Nepal, impacting the nation’s stance on welcoming foreign investment.

The upcoming investment summit follows in the footsteps of its predecessors in 2017 and 2019. The 2017 summit faced criticism for its poor planning and mismanagement, but subsequent strides were made in the 2019 edition. In preparation for the 2019 summit, the government took proactive measures by enacting three pivotal laws – The Foreign Investment and Technology Transfer Act, the Public-Private Partnership and the Special Economic Zone Act (First Amendment). These legislative initiatives were a response to concerns surrounding unfavorable business regulations.

During the 2019 summit, the government presented 50 significant infrastructure projects to potential investors. Notably, 14 projects received qualified proposals totaling $11.88 billion. The selected proposals encompassed seven agricultural infrastructure projects, five hydroelectric schemes, the eagerly awaited Nijgadh International Airport, and the Kathmandu Outer Ring Road Project. However, both the Nijgadh International Airport and the Kathmandu Outer Ring Road Project have faced delays. 

Environmental concerns regarding Nijgadh, coupled with a Supreme Court decision to halt construction, have impeded progress.A similar predicament engulfs the Tamor Storage Hydroelectric Project. Despite a joint venture agreement between the government-owned Hydroelectricity Investment and Development Company and Power China for the 756 MW Tamor Project, it remains in limbo, with the Investment Board Nepal annulling the joint venture agreement. Out of the total projects presented, only 10 have advanced to conduct the necessary studies for implementation. 

The 2023 Investment Climate report by the US Department of State unequivocally acknowledges Nepal’s potential as an investment hub. However, it highlights persistent concerns among investors, particularly revolving around issues such as corruption, bureaucratic red tape, and policy ambiguity and instability in the country. The complicated process of securing permits for investment, business operations, and management in Nepal adds an additional layer of complexity, involving multiple ministries from Finance to Industry. In an effort to streamline procedures, the government introduced the One-Stop Service portal, an online platform aimed at providing investors access to “all investment-related services.” 

Despite this initiative, investors often encounter the inconvenience of being required to submit ‘missing’ documents in person rather than through the designated portal.Nepal presents a plethora of challenges for investors, ranging from the cumbersome renewal processes and company registration and to intricate land acquisition and vexatious taxation systems. The arbitration processes for resolving business disputes further deter potential multinational investors, given the prolonged durations and frequent discrepancies involved in repatriating investments and remitting dividends.

The scarcity of adequate infrastructure remains a perennial bottleneck for Nepal’s quest to attract higher levels of investments. Despite hosting numerous investment summits, Nepal’s business environment needs substantial improvement, and existing hurdles must be effectively addressed to realize the anticipated influx of Foreign Direct Investments (FDIs). Without these crucial enhancements, Nepal’s aspiration to attract the desired FDIs will remain in the realm of fantasy.

The overall health of the nation’s economy is crucial to create an investor friendly environment. A sound economy requires the government to adopt appropriate fiscal and monetary policies.

Ahead of the forthcoming summit, the government has committed to revising over a dozen laws to eliminate obstacles that might impede the execution of approved projects by amending legislation. The decision, while important, seems too hasty. Making almost half a dozen amendments to the legal system before the investment summit seems unlikely.

Investors, be it foreign or domestic, prefer stable and clear government policies as well as personnel as it minimizes risk, making future returns on their investments more predictable. However, the policies and laws enacted by the Nepali government are anything but stable and transparent. A lot of important decisions are made overnight without consulting the stakeholders and without letting enough time for businesses to adjust to. Moreover, the frequent changes in government, accompanied by frequent turnovers in finance officials responsible for economic policies, further exacerbate the situation and undermine confidence in the country’s governance and economic environment.  

For Nepal to genuinely cast itself as a magnet for investments, it must prioritize a laundry list of improvements, including addressing corruption, streamlining bureaucratic processes, implementing controlled currency exchange facilities, ushering in a sovereign credit rating process, and ensuring policy consistency. The government’s forthcoming actions, especially leading up to the Investment Summit, are poised to be the main event in the grand theater of whether foreign investors will rediscover confidence in Nepal’s economic potential. The ball is firmly in the government’s court – it’s not just about articulating plans, but also about showcasing an unwavering commitment to cultivating a business-friendly environment that not only beckons but sustains foreign investment.

Dipti Ghimire is a researcher at Samriddhi Foundation, an economic policy think tank based in Kathmandu. The views expressed in this article are the author’s own and do not represent the views of the organization.

Historical Perspective

Nepal’s political evolution reflects a gradual response to rectify historical gender imbalances. In the era of Panchayat, a mere three seats were earmarked for women. Post the 1990 Jana Andolan I, parliamentary seats for women saw a modest increase to 5%. However, women’s presence in both the cabinet and the broader political landscape remained below 6% until 2007. A significant turning point materialized in 2015 with the enactment of Nepal’s new constitution, a transformative moment mandating a substantial 33% representation of women in parliamentary and government positions.

This constitutional overhaul introduced a noteworthy provision for male-female alternates in key positions, including President, Vice President, Chief, Deputy Chief of Parliament, Mayor, and Deputy Mayor. While these quota measures have undeniably contributed to fortifying women’s presence in the political sphere, the trajectory toward gender equality encounters persistent impediments. Challenges persist, ranging from a lack of familiarity with the new federal system to resistance emanating from male counterparts, dominant groups, and entrenched conservative ideologies. The journey toward comprehensive gender parity remains a work in progress.

Challenges in Practice

Empirical evidence reveals a disconcerting reality, wherein women are systematically relegated to lower positions, such as vice-speaker at the federal level or deputy mayor at the local level. The conspicuous absence of women in primary leadership roles persists from the central government to grassroots levels. Governmental bodies overwhelmingly exhibit a male-dominated leadership, assigning women and marginalized groups to subordinate positions. The inherent hypocrisy of Nepali political parties  to genuinely promote gender equality is evident, with a stark contrast between their professed commitment and the actual practices observed in leadership hierarchies, candidate selection processes, and policy implementations. Elected women often find their voices ignored, with decisions being made without their crucial input.

Instances of skepticism among male leaders when working with women in leadership roles are alarmingly pervasive. A poignant illustration is the municipal government of Laximiya, where the hesitancy of a male mayor to engage with a female colleague on labor policy budgeting resulted in her exclusion from the process. This exclusionary approach persisted, with the municipal government making decisions without consulting the only female member among the 15 municipal officials. These incidents clearly epitomize gender inequality in action.

Despite the widely acknowledged principle that societal development hinges upon the active involvement of all its members, women continually find themselves marginalized in the decision-making process. Even when women ascend to leadership positions, they often encounter neglect or face unwarranted scrutiny. A telling example is the experience of a female politician in Janakpur, spearheading a major road expansion project, completing 80% of the work much more efficiently than her male counterparts. However, her success was met with an antagonistic comment about her educational background from a male city ward member. These attitudes underscore the persistent challenges women face in a patriarchal society, where their skills, capabilities, and educational qualifications are unjustly questioned when venturing into politics.

Addressing Deep-Seated Biases

Another significant challenge arises from the deeply rooted perception of politics as a domain dominated by men, perpetuating the marginalization of women and creating an environment where socially privileged groups of men continue to dictate the political landscape. Decisions are frequently made by male leaders during informal sessions, and these decisions are later shared in formal assemblies. Male members of the parliament are often perceived as unsupportive of acknowledging gender issues as crucial topics for discussion. Female leaders face the unfortunate judgment that their dedication is contingent on aligning their opinions with their respective parties. Any expression of dissent results in unwarranted scrutiny of their sexuality and femininity, labeling them as advocates of the feminist agenda. The stark reality is that men and women do not receive equal treatment in the political realm.

The Need for Holistic Change

The repercussions of these circumstances are profound. Decisions made exclusively by men in the country tend to be less sustainable and impactful than decisions formulated through the collaboration of both men and women. The different perspectives, experiences, and learning styles of men and women create an environment where they can make unique and balanced contributions. Genuine progress and impartiality in the country are only attainable when there is common ground between the genders on laws, policies, and other decisions. While there are numerous policies and programs aimed at promoting gender equality in Nepal, their efficacy remains limited without proper implementation. To truly level the playing field, political parties must actively support women by providing them with opportunities to run for elections by giving them more tickets, increasing their representation in the First Past The Post system, financially supporting their campaigns, and enhancing women’s access to decision-making central committees. This can demonstrate the political party’s commitment to gender equality by addressing these institutional bottlenecks and barriers.

Recommendations

A change in mindset regarding the credibility of women as leaders is long overdue. While individual choices and electoral preferences do play a role in these decisions, it is imperative to acknowledge that overcoming deep-seated societal structures and biases is crucial for achieving genuine gender equality. The credibility of women as leaders should no longer be a subject of debate but an unequivocal truth. It’s about time the political parties fully accept the undeniable truth that women are just as capable and competent as men in leadership roles . In a world where diversity is a driving force behind progress and innovation, it’s essential for Nepal to recognize that the latent talents and capabilities of women in politics remain untapped. The political parties must work collectively towards unleashing this vast potential instead of perpetuating the status quo. Comprehensive educational initiatives, voter education, media campaigns, and community engagement are essential components of reshaping perceptions and cultivating a culture that values and promotes the leadership abilities of both men and women equally. It’s high time we break down the barriers that have held women back from attaining their rightful place in the political landscape. 

Dipti Ghimire ​​is a researcher at Samriddhi Foundation, an economic policy think tank based in Kathmandu. The views expressed in this article are the author’s own and do not represent the views of the organization. diptighimire90@gmail.com