Much-touted Investment Year 2012/13 has landed in trouble after the
country´s failure to formulate new constitution badly eroded country´s
prospect as an attractive investment destination.
While launching the Investment Year, Prime Minister Dr Baburam Bhattarai had said the government would bring in foreign investment worth US$ 1 billion within the first six months of 2012/13, and to achieve the target the government would formulate necessary policies and laws.
“The program is doomed now. Who will put his/her money in a country that does not have a full-fledged constitution and political uncertainties loom large,” said Binod Chaudhary, president of Confederation of Nepalese Industries (CNI).
Under its pledge, the government had said it would provide flexible labor regime to the investors. It had also promised to introduce laws like Industrial Enterprise Act, Special Economic Zone Act, formulate a new Foreign Direct Investment (FDI) policy and enact more investment-friendly FDI Act, among other things.
“The government can still formulate the policies. But the dissolution of CA and legislative-parliament has disabled it from enacting much-needed investment-friendly laws,” said Bhaskar Raj Rajkarnikar, senior vice president of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI).
The government had launched the Investment Year after it formed the Investment Board (IB) and on the basis of calculations that the country would have concluded the peace process and constitution writing by now.
"But that hope has been shattered,” said Rajkarnikar, adding that as the new chaos has turned even the domestic investors nervous, forget foreign investors.
Officials disclosed that foreign investors who were holding talks with the IB to invest in some of projects have already started showing sign of ´waning confidence´ after the new political turn of events.
“South Korean investors, who were looking forward to invest in the hydroelectricity sector, have expressed fear to move forward,” disclosed a source. "They (Korean investors) were excited, but now they are saying that they do not feel comfortable to continue with the proposed projects," said the source.
The announcement of Investment Year had excited both the private and public sectors, and top business bodies like FNCCI and CNI have been actively supporting IB to come up with numerous business projects.
The government too had handed over 14 large-scale development projects such as West Seti (750 MV), Upper Karnali (900 MW), Kathmandu-Tarai Fast Track and Second International Airport in Nijgad among others to the IB to award them to the promising investors under fast-track mode.
“Sadly, this sudden political mess has sharply curtailed the chances of those projects drawing international investors,” said the source.
Radesh Pant, CEO of the IB expressed hope that situation will not be as bad as the business community and some officials think. "Investors will still be interested in those projects if we are able to guarantee protection for their investment," he said.
While launching the Investment Year, Prime Minister Dr Baburam Bhattarai had said the government would bring in foreign investment worth US$ 1 billion within the first six months of 2012/13, and to achieve the target the government would formulate necessary policies and laws.
“The program is doomed now. Who will put his/her money in a country that does not have a full-fledged constitution and political uncertainties loom large,” said Binod Chaudhary, president of Confederation of Nepalese Industries (CNI).
Under its pledge, the government had said it would provide flexible labor regime to the investors. It had also promised to introduce laws like Industrial Enterprise Act, Special Economic Zone Act, formulate a new Foreign Direct Investment (FDI) policy and enact more investment-friendly FDI Act, among other things.
“The government can still formulate the policies. But the dissolution of CA and legislative-parliament has disabled it from enacting much-needed investment-friendly laws,” said Bhaskar Raj Rajkarnikar, senior vice president of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI).
The government had launched the Investment Year after it formed the Investment Board (IB) and on the basis of calculations that the country would have concluded the peace process and constitution writing by now.
"But that hope has been shattered,” said Rajkarnikar, adding that as the new chaos has turned even the domestic investors nervous, forget foreign investors.
Officials disclosed that foreign investors who were holding talks with the IB to invest in some of projects have already started showing sign of ´waning confidence´ after the new political turn of events.
“South Korean investors, who were looking forward to invest in the hydroelectricity sector, have expressed fear to move forward,” disclosed a source. "They (Korean investors) were excited, but now they are saying that they do not feel comfortable to continue with the proposed projects," said the source.
The announcement of Investment Year had excited both the private and public sectors, and top business bodies like FNCCI and CNI have been actively supporting IB to come up with numerous business projects.
The government too had handed over 14 large-scale development projects such as West Seti (750 MV), Upper Karnali (900 MW), Kathmandu-Tarai Fast Track and Second International Airport in Nijgad among others to the IB to award them to the promising investors under fast-track mode.
“Sadly, this sudden political mess has sharply curtailed the chances of those projects drawing international investors,” said the source.
Radesh Pant, CEO of the IB expressed hope that situation will not be as bad as the business community and some officials think. "Investors will still be interested in those projects if we are able to guarantee protection for their investment," he said.
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