Investment Year over before it began

With political imbroglio deepening amid government trying to enact a new law to clear way for elections without political understanding, both the government officials and private sector has lost hope of implementation of much-touted Investment Year, which the government announced last year with an ambitious plan to bring US$ 1 billion foreign investment within the first half of 2012/13.
In fact, top government officials as well as leaders of Federation of Nepalese Chambers of Commerce and Industry (FNCCI) said the program was ´dead´ even before it came into being.
A few months ago Investment Board (IB), which is entrusted to implement the program, had informally announced that the program has been postponed for six months - meaning it planned to launch it from January 2013 - to keep the hope alive. But the status of the government, lack of parliament and the latest confusion over holding elections on November 22 has made even late implementation of the program doubtful.
“Worse part is that the government itself does not seem serious toward the Investment Year. Had it been, it would have taken steps to enact laws and policies that it promised to the investors, instead of elections bill,” said an IB official.
The private sector that was excited to work with the government to lure foreign investment expressed similar doubt. “We were hopeful the government would bring oppositions on board and clear the way for the Investment Year. But latest widening of differences has made us realize the Investment Year is over even before it has begun,” said Pashupati Murarka, vice-president of FNCCI.
The idea of Investment Year was conceived and floated by the FNCCI in 2011 and Finance Minister Barsha Man Pun readily adopted it. Prime Minister Baburam Bhattarai instantly announced that the government would mark 2012/13 as the investment year. He even committed numerous policy and legal reforms to attract FDI.
“No foreign investor can think of coming here to invest where even domestic investors are losing confidence,” said Murarka.
The government did hand over 14 mega projects such as West Seti Hydro Project and Kathmandu-Terai Fast Track to the IB for roping in foreign investors on May 26. But the situation suddenly turned unfavorable when the Constitution Assembly (CA) was dissolved on May 27.
“The dissolution of the CA was the first setback for the Investment Year,” an official at the Prime Minister´s Office said. Political differences have only deepened doubt over the implementation of the program.
The government has not taken a single initiative that demonstrates its willingness to welcome foreign investors, said Keshav Acharya, former senior economic advisor of the Ministry of Finance (MoF). “This indicates the government´s priorities have changed now. The investment year mission is over.”
IB officials do not completely agree with Acharya, but what they admit is the prime minister has neither held any meeting nor taken briefing from the board. “This has left us utterly confused whether we should continue with our ground works,” said the senior IB official.
As a result of this confusion, the board has slowed its works to identify the 50 seleable projects. It is also uncertain whether it should work out schedules and start preparations for the road show meant for promoting Nepal for investment.
“We have identified seven areas to offer to the investors. But the progress on short-listing the projects has remained slow,” the official said.