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The Embassy of Germany in Kathmandu celebrated 65 years of diplomatic relations between Nepal and Germany amidst the presence of over 400 guests at Hotel Hyatt in Kathmandu on Thursday.

National Assembly Chairman Ganesh Prasad Timilsina presided over the event as chief guest.

Officials of various ministries, leaders of political parties, heads of Kathmandu-based diplomatic missions, civil society members, Human Rights advocates, businesspersons, media persons and people from various walks of life were present in the program.

In his welcome speech, German Ambassador to Nepal Thomas Prinz said, “We are celebrating 65 years of bilateral relations between Nepal and Germany. 65 years of friendship and solidarity. We have been standing with Nepal in difficult times, be it the civil war, the 2015 earthquake or the Covid-19 pandemic. We welcome the huge progress Nepal has made and continue our support.” He also conveyed his condolences to the victims of the terrorist attacks in Israel, reads a statement issued by the Federal Republic of Germany in Kathmandu.

The government has expressed its commitment to develop Provincial Investment Climate Reform Action Plans across all provinces, beginning with the Koshi, Madhesh, Gandaki, and Lumbini provinces to stimulate investments at the subnational level.

These plans will identify important reforms based on Provincial Investment Climate Assessments (PICA) conducted in the four provinces to help create an investment-friendly environment and promote private sector investment at the provincial and local levels. This new initiative will also be extended to the remaining three provinces of Bagmati, Karnali, and Sudurpashchim over the course of the Fiscal Year.

The announcement was made at a workshop on PICA organized by the Office of the Prime Minister and Council of Ministers with the support of the World Bank, Swiss Agency for Development and Cooperation (SDC), and the International Finance Corporation on October 9, 2023.

“PICA will help us to get disaggregated data on investment climate at provincial level and offers necessary data for shaping evidence informed policies at local level.  It suggests some policy alternatives for potential transformation of Nepal’s business environment,” expressed Dr Baikuntha Aryal, Chief Secretary of the Government of Nepal. “We need to internalize the framework, ensure effective policy coordination, simplify and harmonize policies and develop understanding of priority reform agenda among all state actors to improve Nepal’s business environment”.

The workshop was organized under the World Bank and SDC-financed Post-Covid Private Sector Recovery Technical Assistance (TA) Program (PSRP). It discussed the findings from the PICA and the strategic actions needed for the formulation of Provincial Investment Climate Reform Action Plans, drawing upon the insights derived from the assessment report.

“PICA will, for the first time, provide insights in terms of the readiness of provinces to attract investment and support private sector growth,” said Meuwly, Ambassador of Switzerland to Nepal. “PICA’s effort is a much welcome step in Nepal’s federalized context. We need to support the ongoing devolution of federal power and promote collaboration between national and sub national authorities. By fostering businesses and private investment, we are ultimately working to achieve Nepal’s aspiration of becoming a middle-income country.”

PICA offers an evidence-based assessment to help policymakers at the provincial and local governments identify important policy changes that affect investment environment and competitiveness. It assesses the investment climate across 18 indicators divided into four pillars: Basic Infrastructure, Regulatory Efficiency, Regulatory Transparency and Firm Engagement, and Quality of Life.

The PICA was undertaken initially in four provinces and municipalities - Koshi (Biratnagar), Madhesh (Birgunj), Gandaki (Pokhara), and Lumbini (Siddharthanagar). The preparation of the PICA will commence in the remaining provinces later this calendar year.

“A conducive climate for robust private sector participation and investment in cities within and outside Kathmandu Valley is central to Nepal’s economic growth,” said Faris Hadad-Zervos, World Bank Country Director for Maldives, Nepal, and Sri Lanka. “Subnational policy makers play an important role in targeting reforms and action plans towards mobilizing greater private investments and creating job opportunities for people at federal, provincial, and local levels.”

The workshop also included a panel discussion on ‘Investment Climate Reforms in Provinces: Possibilities and Way Forward’ where panelists delved into governance issues, the significance of public-private dialogue in reform implementation, and the impact of infrastructure development on enhancing the investment climate.

Eknarayan Aryal, Secretary of the Office of the Prime Minister and Council of Ministers, highlighted the importance of inter-government coordination for effective implementation of PICA reform activities and stressed the significance of the private sector’s role in the industrialization of Nepal’s economy.  The workshop was attended by secretaries and joint secretaries from federal ministries, principal secretaries and secretaries from the provincial governments, chief administrative officers from the pilot local governments, development partners, and private sector representatives.

Finance Minister Dr Prakash Sharan Mahat has urged the European Union (EU) to remove Nepal from their aviation safety concern list.

He made this request in a sideline meeting with EU Commissioner Jutta Urpilainen in Marrakesh of Morocco on Thursday. Finance Minister Mahat is currently in Marrakesh to participate in the annual meeting of the World Bank and the International Monetary Fund (IMF).

Similarly, during the meeting, he urged the EU to increase its economic assistance to Nepal, Minister Mahat's secretariat stated. 

Since 2013 the EU has put Nepal's airlines companies in its safety concern list and due to this the airlines companies of Nepal are not allowed to operate flights in the European skies.

The EU had refused to de-list Nepali airlines from the safety concern list when it carried out a monitoring of Nepali airlines in 2079BS.

It had announced its plan of conducting an on-site monitoring of the status of air safety issues in February 2023, but the EU team did not come to Nepal for the monitoring following the air crash near the Pokhara Airport on January 15.

The EU's security committee has, however, conducted an on-site study of Nepali airlines companies and on aviation security in August/September and the Finance Minister has made this request in this context.

On the occasion, the EU Commissioner said that they would be carrying out works on this matter through the EU Embassy in Nepal and also hold discussions on this.

Prime Minister Pushpa Kamal Dahal has said that the government is ready to form a high-level mechanism for addressing problems seen in the economy at present.

The Prime Minister said this while addressing the 'National Economic Debate' organized by the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) here today. On the occasion, the PM said the government is ready to form such a mechanism as proposed by the private sector.

"It is required that all sectors are at one place and there is a centralized expression for improving the economy. We need this kind of mechanism as we need suggestions and guidelines to initiate a new dimension for economic reforms," the PM said, adding that the efforts for improving the economy could be started from this very point. He asserted that the government is ready to make such a mechanism as proposed by the private sector.

Chairperson of the Dialogue and FNCCI president Chandra Prasad Dhakal had proposed making the high-level mechanism for improving the country's economy and the PM, who addressed the program after this, agreed to the proposal.

Stating that the government is about to take a 'bold decision' for economic reforms, PM Dahal opined that improvement of the overall economy would not be possible through 'minor operation'.

"The main problem of the economy is not resolved despite taking the path of reform. Pathwork-type reforms are not adequate and there needs to be a policy shift," he reiterated. The PM also shared on the occasion that the government has made long efforts to have a synchronization of the finance policy and the monetary policy.

He also claimed that the overall economic situation of the nation could not improve if the government did not facilitate the private sector in their business enterprises. The PM reiterated that Nepal itself will take decisions as to how the problems seen in the country's economy are addressed.

The Prime Minister said the government would restructure the nation's economy through the next fiscal year's annual policies and programs.

Minister for Industry, Commerce and Supplies Ramesh Rijal said that the citizen's morale has been down due to the narrative that is being fomented forcefully that the economy is in the doldrums. He said this narrative should be shattered.

According to him, although the economy is not growing at present, it is not slumping either. "It would create even more problems if the narrative that the country is crisis-hit is spread," he said and called for the united efforts of all sectors, including the private sector in improving the economy.

FNCCI president Dhakal spoke at length highlighting the condition of the economy, calling for urgent action with the government and the private sectors working together to improve it.

Chief economic advisor of the Ministry of Finance Poshraj Pandey said the current critical economic problem was a continuation of problems that piled up in the past.

Stating that there was no uniformity about the present economic situation (the private sector points out economic problems, but the government denies it), economist Dr Achyut Wagle stressed the need for bringing out facts about the current economic situation.

President of the Nepal Chamber of Commerce Rajendra Malla called for the government to bring the monetary policy that suits the goals of economic growth.

Vice President of the Confederation of Nepalese Industries Birendra Raj Pandey said the time has come to restructure Nepal's economy.

Similarly, President of the Federation of Nepalese Industries and Commerce Khimlal Bhandari pointed out structural problems in Nepal's economy.

President of the Federation of Nepali Cottage and Small Industries Umesh Prasad Singh ruled that there was no recognition of the contribution of cottage and small to the country's economy.

Also, General Secretary of the Federation of Nepalese National Industry and Enterprises Bhagirath Sapkota viewed that the state should recognize the role of cottage and small industries for building socialism-oriented society as envisioned by the constitution of Nepal. Industry friendly laws are also required, he added.