Foreign policy experts are sceptic about Nepal's prospects amid global elites as Prime Minister Oli heads to DavosPrime Minister KP Sharma Oli’s trip to Davos, a resort town in the Swiss Alps, on Sunday to participate in the annual World Economic Forum has a single goal: attract global interest in Nepal ahead of the investment summit in March.
Prime Minister KP Sharma Oli’s trip to Davos, a resort town in the Swiss Alps, on Sunday to participate in the annual World Economic Forum has a single goal: attract global interest in Nepal ahead of the investment summit in March. But even before the prime minister touched down in Switzerland, diplomats and foreign policy experts have expressed scepticism on whether he will be able to assure the global elites about investing in the country given the insufficient institutional and policy architecture and lack of accountability and transparency.
The World Economic Forum is a non-profit organisation based in Cologny, Switzerland, and is best known for its star-studded annual meeting in the mountain resort which brings together thousands of global political, corporate and business leaders, policy makers, civil society members, as well as Hollywood celebrities.
In Oli’s entourage for the trip, all 19 members are ministers and government officials with zero participation from the private sector and the business community.
Oli’s trip to Davos, though historic, has left several questions unanswered, particularly about the his readiness to make a case for Nepal on a global stage and network with some of the world’s most powerful leaders and investors.
“If the prime minister is participating in a grand global function like the World Economic Forum, our preparation should have been much better,” said former Nepali ambassador to Geneva Dinesh Bhattarai.
Bhattarai, who has served as foreign relations adviser to two prime ministers in the past, said he was concerned about Nepal’s capability to network with the elites, and more importantly, pencil in follow-up meetings as a mechanism to draw their interest in investing in Nepal as the country looks for the annual $15 billion expenditure to graduate from a least developed to a middle-income level country by 2030.
“To follow through on the conversations in Davos, we have to set up networking of officials and business community, which is lacking in our case,” he added.
For institutional support, Nepal has a small mission in Geneva, which is mostly engaged and occupied with a number of multilateral issues related to the UN and hardly pays attention to relationships build-up with the global business community once the meeting is over in Davos.
Nepal’s practice of economic diplomacy is almost non-existent and a negligible budget has been allocated for it.
Experts also say that there is a lot of policy inconsistency and confusion in the country and investors will not be fully convinced in injecting investment because of the risk factors and the bureaucratic red tape. The visit to Davos is also taking place hot on the wheels of a report by the Centre for Investigative Journalism-Nepal, in which it has painted a damning picture of how some utlra-rich in Nepal were bringing their illicit money from some tax haven countries into Nepal. PM Oli in Davos may have to defend how Nepal is planning to crack down on money laundering and send across a positive message about Nepal’s investment climate. Despite a grand investment summit in 2016, the first event put together by the government’s investment board, there has not been any tremendous progress, let alone changes at the institutional and policy level to create a climate that attracts international partners. Nepal’s foreign direct investment in the last five years has been close to 1 percent of the GDP. Last fiscal year’s number is even dismal, with FDI compared to the GDP standing at a mere 0.5 percent.
That aside, others say, Nepal’s participation in Davos itself is contradictory as the country’s constitution envisions a socialist-oriented economy while the prime minister is participating in an ultra-capitalist jamboree, where he has to explain the global elite the actual ideology his government holds. Another former Nepali ambassador to Geneva Shambu Ram Simkhada also made a cautious assessment to the visit, saying that lack of preparation, clarity on agenda and correct measures back home would make it difficult to secure investments in the country. “There are big global firms which have been providing political risk assessment on regular basis and on the basis of these reports, the foreign investment can be channelised. PM’s speech does not bring investment but we have created an environment to that by revisiting several policies and red tapes,” he said, adding that the world is closely watching the Marxist-Leninist- Maoist government and its policy.
Government officials, including Oli, have been saying that Nepal will raise issues of problem faced by the landlocked and least developed countries and Nepal’s effort to create an inclusive progressive economic architecture, investment-friendly legal framework and government’s move to correct laws and administrative set up to harness foreign investment by setting up investment-friendly legal and institutional reforms where profit of any investors is ensured.But just making a statement in Davos at the highest political level does not ensure the foreign investment, says noted economist Posh Raj Pandey. “ I did not see enough preparation on government side. Second, Nepal can sponsor one session in Davos so that we can be better projected and can sell our agendas. Third is to set up linkages between Nepali business community and corporate and business community present in Davos. Without adequate homework who will link up?” he asked. The participation of ministers and officials does not ensure the investment but participation of the business community as well as private sectors should be ensured by the government, Pandey added. Accompanied by two ministers, advisers, senior officials, Oli will address two separate sessions on ‘Strategic Outlook on South Asia’ and ‘Shaping the Future of Democracy’ on January 22 and 23 respectively. He will also address the Informal Gathering of World Economic Leaders on the theme of ‘The End of Global Trade as We Know It?’ on January 23.
He will hold meetings with political as well as business leaders during the visit.
“I think internal resilience of a country is what contributes to external image projection,” Gopal Thapa, a retired foreign ministry official, said. “In a domestic political situation such as ours dominated by continued internal chaos, mismanagement and unbridled corruption, how would you envisage a flow of external assistance in the country?
“The hubris and insatiable greed for power and purse in our political leaders is largely responsible for the steady erosion of image and standings of the country. The reality is many countries know it is not safe to invest in Nepal,” said Thapa.