Many challenges of the Oli government on FDI
The government is holding the Nepal Investment Summit with the goal of attracting foreign investment. The summit, which begins March 29, is the second of its kind in the past two years. In 2015, the government had organized a donor conference to solicit international support for post-quake reconstruction, but that was not an investment summit. Political leaders, businesspeople and economists who spoke to APEX say there is a tendency of organizing investment summits with fanfare, but successive governments have not given priority to other vital aspects such as embracing liberal political and social values, ensuring policy consistency, setting up follow-up mechanisms, clearing bureaucratic hurdles, among others.
Says Dipendra Bahadur Chhetri, a former Governor of Nepal Rastra Bank (NRB), “We seem to be organizing such summits as a formality. The new government, with a strong support from the parliament, should instead solve various practical problems that are hindering foreign investment.”
The communist government also faces the challenge of demonstrating full commitment to protecting foreign investment and adopting liberal economic policies. “First, the government should convince international investors that it embraces liberal political and economic values as enshrined in the constitution. Second, there should be follow-ups on the pledged investment after the summit. Third, there should be policy consistency as frequent changes in foreign investment-related laws create confusion,” says Nabindra Raj Joshi, who as then Minister for Industry was in charge of organizing the Investment Summit in 2017.
At the same time, economists and businesspeople point out the need for an in-depth study on why the flow of foreign investment in Nepal is small. Speaking at a parliamentary committee a few days ago, Binod Chaudhari, a billionaire lawmaker from the Nepali Congress said, “We should formulate laws only after a detailed study that takes into account the views of all stakeholders. Or we will always revolve around the same issue.”
If the flow of FDI doesn’t shoot up, Nepal’s target of graduating to a middle income country by 2030 is unlikely to be met
Big commitments, low flow
Government data show that since 1990, although the pledged foreign investment is high, only a small percentage of it has materialized. According to official figures, foreign investment constitutes 0.5 percent of the country’s GDP. In the past 20 years, Nepal only saw Rs 170 billion in foreign direct investment out of the Rs 440 billion endorsed.
In the last investment summit held in 2017, various countries and donor agencies committed $13.51 billion, but not even half the pledge has materialized, according to official records. Investment was pledged in sectors such as agriculture, roads, tourism and railways. “After the summit, there was no regular interaction and follow-up with international investors,” says Joshi. According to a survey released by the NRB in June 2018, FDI inflows into Nepal are substantially lower than into neighboring countries. In 2016, the share of the total global FDI that entered Nepal and South Asia was 0.01 percent and 3.1 percent respectively.
“Foreign investors from 39 countries have made investment in 252 firms in Nepal. India is the main investor in Nepal in terms of paid up capital. However, West Indies comes ahead of India if we consider total stock of FDI by including reserves and loans,” the NRB report says. The report also reveals that most of the FDI into Nepal comes from tax havens, which means Nepali businesses parked money in those countries through illegal means and brought it back as FDI.
Many hurdles
Now that Nepal has a strong government with a five-year mandate, there is favorable political climate for foreign investment, but other factors impede FDI. “Nepal needs to make paying taxes easier by simplifying the process of social security-related payments. This is the reason that the recent labor act has made the process more cumbersome and contributed to pushing the country down five places to 110th in a global ranking for the ease of doing business”, says an October 2018 World Bank report.
According to the annual ranking, Nepal made paying taxes more difficult through a 2017 labor act, which introduced a labor gratuity, medical insurance and accident insurance paid for by employers in a way that places a larger administrative burden on companies that already face considerable red tape.
A business licensing system and a proper legal framework have not been created. International investors often complain they face various obstacles when applying for a license. Multinational companies are facing difficulties in registering their offices in Nepal.
In order to clear the bureaucratic hurdles foreign investors are facing, the government has introduced a provision of endorsing an investment proposal within seven days if all necessary documents are submitted. The government is preparing to provide all company registration-related services through a one-door policy. Former NRB Governor Chhetri, however, says such a policy had already been introduced in 1993, but was not implemented. “The problem lies not so much in policy as in its implementation,” he says.
Settlement of court cases is also a concern for foreign investors, who are not confident Nepal’s judiciary would settle cases without prejudice if a legal issues arise. They are also concerned about the visa renewal process for foreign workers in Nepal. Land acquisition has also been a considerable challenge. Stability in politics hasn’t translated into stability in bureaucracy as there are frequent changes of secretaries and chiefs of government bodies.
Of late, the activities of the Netra Bikram Chand Biplab-led Nepal Community Party have also spoiled the investment climate. “Such activities have sent mixed messages. The government should ensure the country is safe for investment. We now have a strong government and a courageous prime minister, so there’s reason to hope that past trends will change and the country will attract more investment,” says Chhetri.
Nepal’s constitution has liberal provisions on foreign investment. It says, “The policy of the state is to encourage foreign capital and technological investment in areas of import substitution and export promotion.” Although the new government has accorded high priority to economic diplomacy, it is still failing to woo international investors.
Muted expectations
In the summit, the government is all set to showcase specific projects with detailed investment modalities. Nepal Investment Board has selected around six dozen projects under seven broad headings: agriculture infrastructure, education and health, energy infrastructure, industrial infrastructure, tourism infrastructure, transport infrastructure, and urban infrastructure. This could make the investment process smoother for foreign companies.
Experts suggest tempering expectations though. “If the government takes measures to achieve policy clarity and remove procedural hurdles, we can expect much from the summit. Otherwise, more investment won’t be forthcoming,” says Chandra Mani Adhikari, an economist.
Targeting the investment summit, the government has already made amendments to some laws and a few more are in the cards. The government has prioritized amending the Special Economic Zone Act and introduction of new laws such as Economic Procedures and Fiscal Accountability Act, Public-Private Partnership and Investment Board Act, and Foreign Investment and Technology Transfer Act. Nepal, a Least Developing Country (LDC), has set a target of becoming a middle-income country by 2030. It is virtually impossible to meet the target without huge foreign direct investment, as internal resources are insufficient. If the flow of FDI doesn’t shoot up, Nepal’s target of graduating to a middle income country by 2030 is unlikely to be met.
Seven, including tourism minister Adhikari, die in Taplejung chopper crash
All seven passengers aboard the Air Dynasty helicopter that went missing in Taplejung on Wednesday afternoon have been confirmed dead. Passengers included Minister for Culture, Tourism and Civil Aviation Rabindra Adhikari and Yeti Airlines chairman Ang Tsering Sherpa.
The helicopter crashed in the Sisne River that flows between the Lingkhim and Phurumbu villages in Taplejung. SSP Sharad Khatri of the Provincial Police Department Dharan confirmed the death of the passengers. “The bodies of all passengers have been found,” he said.
Minister Adhikari and his team of government officials had reached Taplejung after inspecting the Chuhandanda Airport at Tehrathum.
The list of seven deceased passengers:
Rabindra Adhikari: Minister for Culture, Tourism and Civil Aviation
Ang Tsering Sherpa: Chairman, Yeti Airlines
Birendra Prasad Shrestha: Deputy Director General of Civil Aviation Authority of Nepal (CAAN),
Arjun Kumar Ghimire: Minister Adhikari’s PSO
Yuvaraj Dahal: Adviser to the PM’s Office
Dhurba Bhochhibhoya: Deputy Director of CAAN
Prabhakar KC: Helicopter captain
Bhandari to attend BRI conference, invite Xi to Nepal
The Chinese government has invited President Bidya Devi Bhandari to the second Belt and Road Initiative (BRI) conference slated to start on April 25. On behalf of Chinese President Xi Jinping, Chinese Ambassador in Kathmandu Hou Yanqi formally extended President Bhandari the invitation to the conference. Barring last-minute changes, Bhandari will leave for China on April 24, where she will lead a contingent of high-level Nepali delegates, and return home on April 28. China has invited many heads of government or state to the conference.
Despite being a BRI member country, Nepal has not warmed up to projects under the trillion-dollar Chinese initiative. Analysts reckon Nepal hasn’t shown sufficient interest in the projects. By inviting President Bhandari, China has conveyed that Nepal is a BRI priority country. But except in rhetoric, top Nepali leaders, including Prime Minister KP Oli, haven’t reciprocated the Chinese gesture.
President Bhandari’s visit is expected to improve Nepal’s BRI prospects
“However, the fact that our head-of-state is attending the conference sends a meaningful signal. It strongly suggests that the BRI is a top priority for Nepal,” says Khadga KC, a foreign policy expert. Analysts like KC believe that Bhandari’s visit will inject fresh momentum into Nepal’s participation in the BRI. Some western countries have been apprehensive though. Dismissing such apprehension, KC says, “The BRI is not a strategic alliance. We shouldn’t do anything that hurts our national interest. But President Bhandari’s participation in the conference is a positive thing.”
High-level sources say President Bhandari is scheduled to address the conference. She will also meet Chinese President Xi Jinping one-on-one and extend him a formal invitation to visit Nepal. Nepal joined the BRI in May 2017 when Pushpa Kamal Dahal ‘Prachanda’ was the prime minister. Foreign Secretary Shanker Das Bairagi and the then Chinese Ambassador Yu Hong had signed a Memorandum of Understanding on the framework agreement on the BRI in an event held in Kathmandu that was attended by then Deputy Prime Minister and Finance Minister Krishna Bahadur Mahara and then Foreign Minister Prakash Sharan Mahat. Immediately following the signing of the deal, Mahara had led a Nepali delegation at the first BRI conference in Beijing.
Although there has been no official word on the Chinese invitation to President Bhandari, foreign ministry officials have unofficially verified it, going so far as to reveal that the invitation letter is signed by Chinese President Xi Jinping himself. The Office of the President, the Ministry of Foreign Affairs and the Chinese Embassy in Kathmandu are already making preparations for Bhandari’s visit. Sources have also revealed that President Bhandari has already conferred with Prime Minister Oli about her participation in the BRI conference.
The BRI is an ambitious pet project of Chinese President Xi Jinping, who had presided over the first BRI conference held in Beijing on May 14-15, 2017. Attending it were top leaders from around 100 countries, including Nepal.
The epitome of what a Hindi movie can be
This movie touches on so many themes so seamlessly, in what is also a beautifully woven story. You will be effortlessly transported into the crowded gullies (alleys) of Mumbai, India and into the minds of its dwellers who dream of a better life. For a Hindi cinema, ‘Gully Boy’ is revolutionary in many ways: in its pitch for freedom for women, its beautification of brown skin, and in how it tackles sensitive issues of class divisions and poverty.
This story is centered on Murad who is also known as ‘Gully Boy’ (Ranveer Singh). Tension mounts after his father brings in a new wife and financial pressure on the family builds. Murad finds escape in music. Loosely based on the lives of Divine and Naezy, two Mumbai rappers, this is a story of Murad’s journey to rap stardom.
There is not a moment Singh appears anything other than a gully boy who believes in his dreams. The energy he brings to a film set is legendary, and he doesn’t falter in this film as well. Singh manages to perfectly capture the emotional vulnerability of a troubled rapper. In a pivotal scene, when he is denied entry into a night club, for he is only a lowly driver, he is shown listening to a rap song in the car outside, that steely look in his eyes to one day make it big himself.
Alia Bhatt, who plays Ranveer’s love interest Safina, is a rebellious feminist who has been born in a conservative household. Despite this not being advertised as a film with a strong female character, Safina is the feminist we needed to see in Bollywood. She is the backbone of Murad and fighting her own battles at home while trying to achieve her dream of becoming a surgeon, even as her mother only wants to marry her off. She is supportive of Murad’s dreams, telling him she will bring the money, if needed; and is an unabashed lover who breaks beer bottles on the head of any woman who tries to steal her love of 13 years.
Who should watch it?
Anyone who understands Hindi. Even those who don’t should watch it with subtitles. Stellar performances, great narrative and breathtaking music, it’s a complete package.
Siddhant Chaturvedi, who has debuted with this film, is surely here to stay in Bollywood. He plays MC Sher, a humble and strong street rapper, who is there for Murad at every step. He is Murad’s guide, and even when he loses to the Gully Boy, he is there helping Murad till the end. Other supporting characters also help bring the story to life.
This movie may be based on a cliché of a poor man with talent overcoming various hurdles to achieve his dreams. Yet there are innumerable household dramas and gully fights you find yourself riveted to. Perhaps in a perfect sum-up of the storyline, Murad says to his father that even though his dream and reality do not match, he will change his reality to match his dream.
There is subtle comedy even in serious moments. The movie also effortlessly blends an 18-track album into the plot of this 2h30m movie.
This is not just a movie, but an emotional rollercoaster that will stay with you long after. Even if you are not a rap fan, in the end you will invariably find yourself humming “Apna time aayega” (the movie’s title track). Watching it once will not be enough!
Movie: Gully Boy
Genre: Musical drama/ Romance
Cast: Ranveer Singh, Alia Bhatt, Siddhant Chaturvedi
Director: Zoya Akhtar
Rating: 4.5/5
