KATHMANDU: Nepali Congress (NC) leader and parliamentarian Dr. Arzu Rana on Thursday said Nepal has been adopting an open, liberal and market-oriented policy.
Sharing her views at a forum jointly organized by UNIDI, JICA & JETRO and Nepal Embassy in Tokyo on Thursday, she said the budget statement, endorsed by the Parliament, has announced various second-generation economic reform agenda.
“It includes development of competitive capacity by reducing transaction cost, productivity and efficiency improvement, institutional reform to create investment climate, promotion of domestic and foreign investment, and development of digital economy and adoption of fourth industrial revolution, among others,” she stated.
She further stated that Nepal, being a land-locked country, aspires for the Japanese model of industrialization, where innovation and technological excellence lead to a new dimension of industrial competitiveness.
Stating that foreign investment is vital to spur development, Rana said that Foreign Direct Investment (FDI) is not only a complement to domestic investment that bridges the gap between investment and savings, but also a solution to the gap in foreign exchange resources.
“It is also a source of new technologies. It can lead to knowledge transfer and skills development. FDI inflows provide employment opportunities for the citizens of the recipient country- opportunities that would not otherwise be available,” she noted.
She further noted that India, China and other emerging economies show that FDI can also serve as catalysts for the growth of local small and medium enterprises.
“From social perspectives, socio-cultural organizations such as clubs, community and non- governmental organizations can benefit from the robust corporate social responsibility programmes of multinational enterprises,” she said. Moreover, the invisible social benefit is creation of cross cultural space as foreign investor and their workers come from a different cultural set-up, according to her.
According to her, Nepal offers 100 percent foreign ownership in almost all sectors, land ownership in company’s name and 100 percent repatriation of profits for foreign investors.
“Surveys conducted by the central bank, Nepal Rastra Bank, show that the average return on equity (ROE of surveyed FDI companies stood at about 15 percent for 2020/21, which was around 15 percent,” she noted adding, “For most successful FDI company, Unilever Nepal Limited, the dividend ranges from 100 percent to 1270 percent per year during the last ten years.”
Stating that Nepal being strategically located between China and India, Nepalese goods enjoy duty free and quota free market access in these markets.
“Nepal is a member of World Trade Organization (WTO) and the Multilateral Investment Guarantee Agency (MIGA) which ensure trade and investment policies and regulation of international standards,” Rana added.
Nepal is also a signatory of various regional groups such as South Asia Free Trade Agreement (SAFTA), SAARC Agreement on Trade in Services (SATIS) and Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), she stated.
“We have enacted Foreign Investment and Technology Transfer Act to facilitate foreign direct investment and protect the interest of investors,” Rana said adding, “Our legal system prohibits prohibition of nationalization of private enterprises.”
She further stated that the government has taken many initiatives in recent past such as Special Economic Zones, bonded warehouses and competitive corporate tax rate.
According to Rana, Nepal has also added advantage of ‘demographic dividend’ — 15-59 age group — constitutes 62 percent of the population.
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