Over a dozen int'l firms knock IB door for investment

More than a dozen companies from China and India have approached the Investment Board (IB), showing interest to invest in different sectors ranging from hydropower to mining in Nepal.

Some half a dozen Indian companies have expressed strong interest to invest in airport, hydropower and transmission line, disclosed Radesh Pant, CEO of the IB.

Chinese firms approaching the board too have expressed willingness to put their money on long-term projects like hydropower, mining and infrastructure development.

“The companies are in regular discussion with us,” Pant told Republica.

He, however, refused to disclose the name of the companies, saying it would be inappropriate to name them until a final decision is made.

IB, which has been coordinating with the foreign investors in order to lure overseas investment for the upcoming Investment Year 2012/13, has also finalized its structure in order to facilitate overseas investors and deal with their issues.

Pant said the board will have five sub-divisions -- project assessment, investment generation, investor services, policy services and governance.

“Fundamentally, these units have been worked out in order to make IB a long-term professional arm of the government,” said Pant, who has been leading the government´s ambitious plan of attracting foreign investment amounting to $1 billion during the second half of 2011/12.

Pant is confident of achieving the ambitious target provided that there is conducive business environment in the country.

“Once we prepare all the legal frameworks to protect investment, I am sure we will start receiving foreign direct investment (FDI),” he said, further disclosing that investors from other countries like France, US and Japan too have shown interest to invest in Nepal.

Revision of FDI Policy

The government has taken initiatives to revise Foreign Direct Investment and One-Window Policy (FDI) policy 1992 to create a sound legal framework during the Investment Year 2012/13.

Ministry of Industry (MoI) in assistance with the United States Agency for International Development (USAID) has hired a team of experts to review the existing policy.

“We have taken service of a team of experts to get meaningful review of the existing policy,” Anil Kumar Thakur, joint-secretary of MoI, said, adding: “After getting the report, we will make necessary changes in the policy.”

Bribing for Monsanto

The hybrid seeds of maize from the American multinational company Monsanto have been distributing in Nepal with the help of some handful of people. There are several news in different local media that United State Agency for International Development (USAID) is lobbying for the entry of this particular company in Nepal.

The latest news has revealed that local contractors in Nepal are trying to push the seeds of Monsanto by bribing to the government officials in Nepal. This news has taken back to the 2009 when the Government of Nepal had to give money to the local farmers in the Terai region of Nepal when the seeds of Monsanto had cost the maize production hugely. The government had dispersed Rs 2 hundred million in the five districts of Terai region through the Ministry of Agriculture and Cooperative (MoAC). 

AID AGENCY FLOUT GOVT RULE

Nepalese authorities say we are helpless

The aid industry in Nepal does not quite follow an easy route , and there are complex dynamics it associated with it. “In our case, it is like either we let them do whatever they want, or we decline the aid altogether”, a senior official in the Ministry of Finance told The Reporter.

What he implied was a disapproval of the way many aid agencies have conducted themselves in Nepal over a period of time. “ A few bilateral donors and their aid agencies apparently do not follow the Country Procurement System (CPS) that supervises  and keeps a tab on all procurement activities associated with the public sector.

Citing examples, he said  many donor agencies,  including the  United States International Development Agency (USAID), do not follow the CPS, i.e. the aid money it brings in here is spent without following norms set by the government, and these agencies have their way. Senior officials plead helpless on the issue.

“We don't have the right to ask any donor agency to procure under the norms of CPS", secretary at Abnindra Kumar Shrestha, Public Procurement Monitoring Office (PPMO) told The Reporter. “ Article 67 of the Public Procurement Act, 2006  gives  the freedom to donors not to comply with the CPS if the aid is not for budgetary support to the Government of Nepal.”  But it is found that  still a lot of aid intended for budgetary support flaunts CPS. Interestingly, the consultants hired with the help of World Bank had drafted the PPA, 2006.  Official version of the U S Embassy on the issue was not available although it had been approached.

“We are keen that aid agencies follow rules and demonstrate higher degree of transparency and accountability “, an official said , adding “this will also have positive impact in other sectors as this sector alone contributes to 26 per cent of our annual budget.”

“At times, they are very blunt to our mild objections. They simply ask us whether we want their support or not, and that is not the kind of decision that we can take at our level in the bureaucracy”, an official in the  Ministry of Finance said.

The latest Portfolio Performance Review of 2011/2012 has clearly stated that the CPS should be reformed to align it more with our needs and CPS system. But, it is far from being adhered to by the donors and their aid agencies. According to the guidelines, the donors should spend money by following our CPS and not by compelling the officials to accept their aid in its entirety with conditionality or forsake it.

This is How USAID Functions!

Monsanto Controversy

An official release of the United States Agency for International Development’s Nepal office posted on its official website on September 13  had an eye-catching headline-  "USAID teams with the Ministry of Agriculture & Cooperatives and the Monsanto Company to enhance maize production in Nepal.” On November 18, USAID posted a status on its Facebook Page--almost opposite of its own version of the earlier release.  The three paragraph text says "No new programs have been entered into by the US Government with the Government of Nepal (GoN) to introduce hybrid maize seeds."

The days between the two postings amply demonstrates how things are done in Nepal, how much USAID cares about providing facts to the media and so on.

On September 13, USAID Nepal had organized a one-day workshop in the Hotel Himalaya which was inaugurated by  Agriculture & Cooperatives (MoAC) Umakant Jha. The USAID release that followed claimed that ‘secretary Jha appreciated the opportunity to work with USAID, particularly on this maize initiative.’ But, secretary Jha later publicly refuted it and said what was attributed to him was ‘baseless and completely wrong'.  "I was present in that workshop and there was a presentation on Monsanto,” Jha said, adding “I was just listening to the discussion but I have no idea about any partnership between MoAC and USAID to bring Monsanto in Nepal." Monsanto is an American multinational agricultural biotechnology corporation which is the leading producer of hybrid glyphosate and Genetically Engineered Seeds.

Soon after Jha’s rebuttal, USAID officials told me that they had no idea what Jha ‘s statement in the media was all about, ‘ but the government of Nepal and USAID are working together to bring Monsanto in Nepal to distribute hybrid maize seeds. Stuti Basnyat, communication officer in the USAID said, "I don't know what secretary Jha told you but we are working towards having an agreement among USAID, GoN and Monsanto."

While the first release mentioned Monsanto five times, but the update in the Facebook less than two months later omitted the name . It simply talks about promoting hybrid seeds.

The two releases and the period in between have fuelled enough controversy , and there has been no convincing clarification issued from any side  Neither the GoN nor the USAID  have tried to explain how hybrid seeds are different  from the traditional ones.  Dragged into the controversy, the USAID now insists that it will only respond to an email query.  On the Nepal government side, Jha has been transferred to the Ministry of Industry, and many read his going against USAID has cost him earlier job. But the Ministry of Agriculture even without Jha refuses to bail out USAID.

Elaborating the genesis of the controversy, Dr. Hari Dahal,  MoAC Spokesperson  said that ‘ one official from USAID had come to the ministry with Monsanto proposal to discuss, but no concrete decision was taken’ . He also challenged the USAID to publicize the documents or evidence, if any, to suggest a deal was in the offing ‘Ministry of Agriculture is not as techno-savvy as USAID is, ‘but facts speak for themselves,’ MOAC officials say.

The current controversy somehow discredits the USAID that has been working in Nepal for the last six decades with substantial support to many developmental projects, and contributed a lot towards Nepal’s journey to a modern and developing country. But like some other bilateral donor agencies, USAID spending money directly in the name of development (bypassing the government)  has of late is also becoming an issue in the country.

In its the Facebook posting,  USAID  claims that  the US mission remains committed development partner to the GoN. While this is true in many ways,  the word ‘commitment’ can not bypass the existing rules of the government.  The development agency that  dismisses its official press release through a posting in the face-book is not a practice that can be called responsible. The episode may perhaps provoke many donors to review their similar approach , and perhaps it is also the time for the UN Resident office to take cognizance of this.