"Like it or not, politics comes first. It is politics which stands in the way of economic development. If we have sound politics then we can have good economy," said Mahathir, during the inaugural session of Nepal Business Conclave 2014 which kicked off on Sunday.  Sharing experience of Malaysia's economic transformation achieved under his 22-year leadership, Mahathir said efforts to avoid racial conflict hold the key to peace and stability.

"The country should be shared between different races in a fair manner, both on economic grounds as well as political power. This was a wonderful formula because it has given Malaysia more than half a century of peace and stability," he said.

Credited for transforming Malaysia into an Asian economic tiger, Mahathir is also remembered for his two-decade long authoritarian rule. Over the period, he created a Malay middle class through government patronage as well as policies of positive discrimination in employment and higher education.

"Some people accused us of not being democratic enough. But we are democratic in the sense, at least we are having elections and because the government had delivered on its promises. The same government has been elected almost at every election," he said on Sunday, referring to five consecutive election victories of his government between 1981 and 2003.

Stressed on having better human resources for the country's economic development, he said his government invested hugely on education.

On FDI, he said Malaysia invited foreigners to set up industries as the country had no capital and management skills at the time. "We decided that we should invite foreigners to come to our country to set industries which should be labour intensive. Our intention was to create jobs for our people, not revenue for the government," he explained.

In his 17-minute keynote speech, Mahathir said political parties are there to serve the people, not to serve themselves. "I had to remind myself, when I was Prime Minister that I was there to serve the people not myself," he said at the conclave attended by Prime Minister Sushil Koirala, Finance Minister Ram Sharan Mahat and Li Jiheng, governor of China's Yunnan Province.

Speaking on the occasion, Prime Minister Koirala described Nepal as a land of opportunities saying that the government will stand by its promise to ensure a safe and favourable condition for foreign investors. "The government is committed to collaborate partnerships and has formulated a long term vision for reforms in Nepal." he said.

Welcoming foreign investors, Finance Minister Ram Sharan Mahat said that the government would support investors throughout their investment journey in Nepal.  The two-day conclave was jointly organised by Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and the Nepal Government aimed at acquainting foreign investors about the investment potential in Nepal. The FNCCI has readied 52 potential investment projects to showcase to the international investors.