Beyond Rhetoric: Nepal’s Investment Speechathon

The third international Nepal Investment Summit (NIS) 2024 concluded last week with the usual flurry of social media posts. For many, including diplomats, international delegates and young business people/professionals, it was one of their first time attending an event of that scale in Nepal. It was also one of the rare events in Nepal when the whole set of leaders across political, bureaucratic, and business spheres converge together to spend hours listening to or talking about matters of business and investments. Like many other ritualistic celebrations in Nepal, this event can be considered as a festival of sorts where at least every once in a while, talks about investments, projects and businesses happen. Yet, amidst the excitement, Nepal needs to move beyond “speechathons” from mere speeches to tangible action.

Let’s look back at Nepal Investment Summit 2019 where sixteen MOUs were announced with much fanfare. While referring back to the Himalayan Times news item – Investors apply for 16 projects, I tracked what happened to those projects in the past five years. The MOU page has now even vanished from the Investment Board website. This highlights the need to ensure accountability for past commitments as a prerequisite before funding events like the NIS 2024. Similarly, this year’s list of announcements needs to be monitored so that they do not face the same fate. Nepal has remained a country with highest per-capita MOU and per-capita reports. It is now time, especially for different funding agencies, to ask and deliver on accountability.

One of the excitements building up was the number of legislations that would be enacted before NIS 2024. However, our tendency of waiting until the eleventh hour and fifty-ninth minute showed up again as Investment Facilitation Ordinance 2081 was promulgated just a few hours before the inaugural day of the summit. The eight acts that were amended by the ordinance will be limited to paper if parliament does not endorse them within sixty days. Even within the ordinance, the local business interest managed to push provisions such as relaxing land acquisition laws and building in protected areas whereas provisions important to attract foreign investments were ignored.

To attract real investors, Nepal needs to prioritize quality over quantity of delegates. People are interested in learning about business environment from a granular level of knowledge rather than merely attending ‘speechathons’ where fifteen speakers speak in turns over a lengthy session. For instance, I was congratulating one of the opening session speakers on being able to have the patience to stay on stage for over two hours to speak just for five minutes during the NIS 2014. The fact of the matter is that serious investors do not like to listen to long speeches. Furthermore, UN Resident Coordinator, Hanna Singer-Hamdy, rightly pointed out the token presence of women in panels and audience. Having multiple programs in Nepali language in media outlets that has no traction outside Nepal shows that our inward-looking approach does not quite understand how to deal with an international audience.

Business confidentiality is another big that is little understand and largely ignored in Nepal. Some people connected to board members could get access to some copies of feasibility reports submitted to the IBN. Investors are wary of such leakages of project reports from boards of banks. Since Nepal’s reputation on confidentiality is poor, many investors do not want to submit any reports, especially on pioneering efforts. Similarly, where private sector has representation in different boards, there is always the issue of conflict of interest. In my book Unleashing Nepal, I have highlighted some real cases of such leakages. Leakages is still a big issue that needs to be addressed.

Development partners are gearing up for Nepal’s graduation to middle income country in 2026. Accordingly, they are recalibrating their strategy towards private sector led development. However, it will be important to ensure that there is not too much free money chasing ‘granterpreuners’ and ‘donorpreuners’. This also calls for quick graduation from impact investment to real investment. Embassies will also need to recalibrate by extending beyond consular services and development assistance towards facilitation of investors and business people. Reliance on bilateral chambers that were originally formed to facilitate trade bottlenecks. During the management of the recent delegation, it became evident that the detailed information sought by investors lie beyond the comprehension of many who are seen as the key drivers in different bilateral chambers.

The notion of USD 10 -15 million investment in a USD 44 billion economy cannot be headline news anymore! In 1996, two FDIs of USD 300 million investment in a USD 6 billion GDP economy changed fate of over forty legislations, policies, and regulations. Now, Nepal needs investments of USD 2-3 billion to bring forth reforms. International investors can bring in money and push their embassies and programs to push the reform agenda like the late 1990s where Norwegian and US government played significant roles in legislative reforms.

Finally, discussions around investments and business need to happen regularly rather than once in few years. It is important to collaborate with international agencies who can bring the right people in the room and host real panel discussions as understood in international parlance rather than slew of speeches. Nepal Economic Forum’s successful hosting of the Himalayan Future Forum in February 2024 exemplifies the effectiveness of curated events. The ongoing trend of “speeechathons” shows the room for collaboration in Nepal.