Economic diplomacy is Nepal’s core foreign policy conductForeign Minister Pradeep Gyawali said on Monday that economic diplomacy will be the core of the KP Sharma Oli government’s foreign policy conduct and Nepali missions abroad have been instructed to approach in this line.
Foreign Minister Pradeep Gyawali said on Monday that economic diplomacy will be the core of the KP Sharma Oli government’s foreign policy conduct and Nepali missions abroad have been instructed to approach in this line.
Addressing the Kantipur Conclave, Kantipur Media Group’s flagship global event, Gyawali said the major component of Nepal’s diplomatic engagement has shifted towards economic diplomacy and his ministry has made a new arrangement in this regard.
Two key ministers of the Oli government—Foreign Minister Gyawali and Finance Minister Yubaraj Khatiwada— highlighted the foreign policy priorities and economic agenda of the government during a session entitled “Nepal in the Global Stage,” at the conclave on Monday.
While Nepal’s immediate priority will still be on official development assistance (ODA), Gyawali said the government will focus more on foreign direct investment (FDI).
He said Nepali missions serving in the developed countries should try their best to increase the ODA.
“Nepal needs development assistance for some time as we’ve to complete reconstruction process,” he said.
While Nepal still receives substantive ODA from bilateral and multilateral development partners, Gyawali said the trend of declining ODA commitment asks us to explore for other avenues.
“Keeping in the mind the trend is declining, our major emphasis is in foreign direct investment and I have already instructed our missions to establish a new profile and new image of Nepal,” said Gyawali, adding that Nepali diplomats must focus on what are Nepal’s potentials and opportunities and why investors should invest in Nepal.
The demographic dividend, growing domestic market with 29 million people, expanding middle class, the country’s location (between India and China), and huge natural resources are the major enablers of Nepal’s economic development, according to Gyawali.
Tourism will be another major component of Nepal’s economic development, he said. “Next year, we’re going to organise Nepal Tourism Year to bring two million tourists and our missions are already engaged in branding Nepal.”
Nepali diaspora is high on the list of Foreign Minister. Nepali diaspora is very important to be a partner to Nepal’s journey toward economic prosperity. “That’s why we have established various platforms and mechanisms to engage them in Nepal’s development,” said Gyawali.
Given the alarming trade deficit the country has, special attention will be given to reduce the deficit. The newly appointed Nepali ambassadors to India, Germany, Geneva, the UN, Malaysia and Canada have been asked to work to expand Nepal’s foreign trade.
Speaking at the same session, Finance Minister Khatiwada highlighted why investors should invest in Nepal in changed political context. On Sunday, during the inaugural session of the Conclave, Prime Minister KP Sharma Oli said that Nepal has an immense possibility for investment and that it can offer both secure opportunities and profit.
In the same spirit, Finance Minister Khatiwada said that as an emerging market that is close to two big neighbours, Nepal offers greenfield investment opportunities. “From start-ups to big businesses, we’ve the virgin land. This is the best thing we can offer,” he said.
The Finance Minister assured the investors by saying that investors’ property will be protected, there will be no nationalisation of their property and repatriation of profit will be ensured.
“What the investors need is they want attractive return in a safe investment environment. I think, if you look the history of foreign investment in Nepal, most of them (investors) are making good money of the investment they made,” he said.
“Repatriation is not a problem as the law itself has ensured that the principal, interest, dividend can be repatriated in a most transparent and easiest way.”
As some of the development partners and investors voiced concerned about rampant corruption in the government system, lack of adequate laws and policies, bureaucratic red tapes, issue of repatriation, the Finance Minister assured them that the government is working on number of measures regarding legal and regulatory framework ahead of the planned investment summit in March.
On legal environment for enabling investment, he informed that foreign investment and technology transfer act has already been passed by the Cabinet and would be taken to Parliament this week while number of other acts will also be expedited for their endorsement.
“Some legal and regulatory framework including the by-laws relating to hedging mechanism and one window for operation of industries are also coming,” said Khatiwada.
Given the investors’ sensitiveness on labour issues, Khatiwada tried to dispel their concern by saying that labour market and labour law in the country have been properly managed and regulated. “We do have a very properly managed labour market whereby our labour law now ensures that there should be no dispute in the industrial relations as the new labour law has been formulated with tripartite agreement between employer, employee and the government,” he said.
On the concerns of investors about lack of required infrastructure to set up an industry or a manufacturing base or to kick start any other business, Khatiwada agreed that infrastructure is key to investors. He, however highlighted one of a perennial energy crisis is almost over. “While there is some erratic supply of power at some point of the day due to technical errors, we can assure quality power supply 24 hours a day. That is something we can assure for power intensive industries.”
Nepal’s maiden participation on World Economic Forum in Davos, Switzerland with high level delegation was to showcase Nepal’s desire and resolve to make a rapid socio-economic transformation, to attain the prosperity through broader participation and goodwill of community, according to Gyawali.
Prime Minister Oli along with Gyawali and Khatiwada had attended the WEF meeting in Davos in January, the first by the Nepali government.
“Some of the high-level meetings and discussion in Davos has created an environment to make a network for Nepal. Now, our effort will be inviting business community for meaningful collaboration for Nepal’s development based on that network,” he said.
Finance Minister Khatiwada said that the Davos visit was to show, as democratically elected government, we take all the players of the state – private sector, community, and cooperative sector – in complimentary and collaborative way for economic development.
“We’re there also to showcase how fast we’re able to translate federalism into action. In less than one year time, we’re able to fix some of the problems associated with federalism, particularly on sharing resources and opportunities. The third one was informal dialogue as well as formal meetings with several investors, to solicit their investments and their interest towards Nepal,” he said.
When asked about Nepal’s agenda in next year’s Davos meeting, Khatiwada said that the government would say Nepal is no more a least developed country. “We would be one of the fastest growing economies in the next two years and our disposable income will cross 1,500 dollar,” he said.
As he prepares for the UN Human Rights Council meeting in Geneva later this month, Foreign Minister Gyawali said that as Nepal has made various commitments in various national and international forums, it should be abide to them. “There will be no blanket amnesty on cases of serious human rights violations. We will focus on how we can reconcile the society, how we can heal the wounds of the conflict. So that’s why I will request the international community that please be assured about Nepal’s capability and ability to finalize this process.”