When Nepal held an investment summit in March, China outshone every other country by pledging to invest over $8 billion – a little more than 60% of the total pledge of $13 billion. Eight Chinese companies showed interest in Nepali hydro-energy, mining, railway, hospital and other infrastructure projects.
Six months on, none of the Chinese companies have started the process of investing in Nepal. While a few firms are inquiring about today’s investment climate, others have not gone that far.
After the summit, Industry Minister Nabindra Raj Joshi formed three committees to start the process of getting the cash pledged to Nepal. While Joshi himself led the main committee, the other committees were led by the CEO of Nepal Investment Board and a Joint Secretary of the National Planning Commission.
When NC President Sher Bahadur Deuba succeeded Maoist Chair Pushpa Kamal Dahal as Prime Minister, he did not appoint an industry minister. He kept the portfolio for himself, practically rendering the three committees dysfunctional, and delaying the process of translating investment pledges into actions.
Nepal’s ambassador to China, Leela Mani Poudyal, says he is constantly following up with the Chinese companies, but their responses are not encouraging.
Nepali business leaders say Chinese and other foreign investors think twice before investing here, mainly because of the lack of coordination between government agencies.
Despite recent reforms, foreign investors still must get approval from multiple ministries, departments and agencies. The much hyped one-window policy has not really worked, which is a huge deterrent for foreign investors.
Meanwhile, Deputy Prime Minister and Foreign Affairs Minister Krishna Bahadur Mahara flew to Beijing this week, aiming to speed up the investments.