Keynote Speech by
Minister for Foreign Affairs Hon. Mr. Pradeep Kumar Gyawali
at Nepal Investment Seminar jointly organized by the Embassy of Nepal, Japan External Trade Organization (JETRO),and UNIDO Investment and Technology Promotion Office
Tokyo,November 20, 2018
Executive Vice President of JETRO Mr.NaoyoshiNobuchi,
Ambassador of Nepal to Japan H.E.Ms.PrativaRana,
Ambassador of Japan to Nepal H.E. Mr.MasamichiSaigo,
CEO of Investment Board Nepal Mr.Maha Prasad Adhikari,
Deputy Head of UNIDO ITPO, Mr.FardaGelegen,
Distinguished business leaders,
Ladies and Gentlemen
Namaste/Konnichiwa/ and a very Good Morning to you all.
I wish to begin by thanking the organizers- the Embassy of Nepal, Japan External Trade Organization (JETRO), and UNIDO Investment and Technology Promotion Office- for hosting this important event on investment prospects of Nepal.
Though as a Foreign Minister this is my first official visit to Japan, I have visited this beautiful country earlier in different capacities.
We admire JETRO’s rolein connecting business with government, business to business and fostering people-to-people contacts for the promotion of trade and investment.
Similarly, the role of UNIDO in the promotion of investment and technology transfer is commendable.
Nepal and Japan enjoy historically warm and friendly ties. Our ancestors crossed mountains, oceans and rivers to establish cultural contacts. Over the centuries, such exchange built a solid foundation of our relation, based upon shared values of peace, coexistence, compassion, cooperation and mutuality of interest. Buddhism and other common eastern cultural thread bind us in a trusted and time-tested friendship.These relations are multi-dimensional encompassing political, economic, social and cultural spheres.
Yesterday I held delegation level talks with the Foreign Minister His Excellency TaroKono. The meeting was very fruitful. We agreed to further enhance bilateral cooperation in diverse fields of mutual benefit. Japan has been a valuable partner in our development efforts. We thank the Government of Japan for their generosity and cooperation.
Apart from regular development assistance, Japan has extended valuable support during difficult times. We particularly recall Japan’s humanitarian assistance in the aftermath of the April and May 2015 earthquakes and the support provided for the reconstruction.
We are happy for Japan’s phenomenal progress in the past seven decades. Japan is a success story for the world to emulate how a nation builds back better.
When I visited Japan in August 2008, Nepal was in cross-roads. Peace process was just started, but not concluded. Constitution drafting was in an initial stage and the political forces were in sharp difference in many issues. Agenda of development and prosperity was over-shadowed by hot political debates.
Today, while speaking in front of you, I am happy to share that after a prolonged instability, Nepal has entered into an era of peace and stability after the writing of a highly progressive, inclusive and democratic constitution in September 2015. The Constitution has institutionalized democratic political gains and made the people of Nepal truly sovereign. Successful holding of democratic elections and formation of stable majority Governments at all three tiers of federal set up have ushered Nepal into a new era.
Building on political stability, we have undertaken a decisive journey towards development and prosperity with the motto of ‘Prosperous Nepal, Happy Nepali’. We want to overcome poverty, under-development and other impediments to prosperity.
We have set a timeline for graduating from LDC status at an early date and aspire to become a middle-income country by 2030.To achieve these milestones, we require massive investment in infrastructure development and induction of advanced and innovative technology.
Endowed with abundant natural resources, we have not been fully able to convert them into wealth due to financial and technological gap. There exist immense opportunities for economic growth.Investment in hydropower, transport,agriculture, tourism, information technology, mines and minerals, health and education and agro-forestry have potentials to transform Nepal’s development landscape. They present most attractive returns for investors.
I call for investment and transfer of technology from Japanese private and public sector in these areas. While Japan has been a valued development partner for many years, this partnership must now be extended to investment in areas of comparative advantage.
As the CEO of Nepal Investment Board will shortly present details about the investment opportunities in Nepal, let me briefly outline the policy environment and the reforms we have undertaken in recent years.
The Government of Nepal remains resolutely committed to create an investment friendly environment, not by word but by action; and not by process but by results.
We have undertaken a number of measures to improve‘Ease of Doing Business’.
Enactment of new Industrial Enterprise Act, Special Economic Zone Act, Foreign Investment Policy, Establishment of Investment Board of Nepal and Special Economic Zones Authority are some of the policy and institutional reforms undertaken to create conducive environment for doing business in Nepal and to coordinate inflow of foreign as well as domestic investment.
The Foreign Investment Act is being further revised to guarantee full protection to foreign investment and simplify the procedures for repatriation.Our laws permit full repatriation of income earned from investment and reinvestment.
A one stop service centre for the registration and operation of enterprises is coming into operation within the next few weeks. We have carried out Bilateral Investment Promotion and Protection Agreements as well as Avoidance of Double Taxation Agreements with a number of countries. We would be very much willing to work out such an agreement with Japan as well.
To ease foreign investment, we have taken measures to enhance responsiveness of bureaucracy, development of basic infrastructures, increase capacity of banking and financial sector, reform of intellectual property regimes and development of human resources.
We have amended laws related to labour and industrial relations making them more investment friendly. We continue to promote public-private partnership.
The peaceful and stable political environment has ensured policy consistency, continuity and predictability.Robust reform process will continue to improve business climate.
The Government is strongly committed to open and liberal economic order with private sector as the linchpin of the economic engine. Foreign companies registered in Nepal can purchase, own and sell land. No discrimination is made between national and foreign investors. There is no policy of nationalization of private enterprise.
Foreign investment is open in all major profitable sectors, such as, hydropower, manufacturing, services, IT, tourism, mining, herbal medicines, and agro-based industries. The list of negatives is very small.
The Investment Board of Nepal headed by the Prime Minister himself facilitates investment in medium and large size projects.It symbolizes the commitment at the highest level to mobilize and promote FDI. The Board is being further strengthened,empowering it to approve mega investment through one-door system.
Nepal is located between the two giant markets of Asia- India and China, which can be a significant source of attraction for investors. Improving connectivity with these markets by all modes of transportation- roadway, railway, waterway and airway- is being advanced with priority.We have inked various agreements/MoUs on power trade and cooperation with both of our neighbours and BIMSTEC countries, including Bangladesh, which will pave the way for power trade beyond the borders. The preferential trading arrangements with US, EU, India, China and other countries provide conducive environment for the export trade.
Close to 30 million population of Nepal presents a good-sized market of growing middle class within itself. Market competition at present isnot high which provides a good incentive to benefit from investment in the Nepali market. As an LDC, products from Nepal enjoy duty free quota free access in European and other regional markets.
Availability of skilled, semi-skilled and unskilled human resources at low wages is yet another competitive advantage that Nepal offers to investors. Large number of Nepali workers who are going abroad in search of jobs will stay back when they see flourishing opportunities at home. Similarly, many young talents who have pursued higher education in foreign world-class universities are available in our labour market.
Physical infrastructure, its quality and reliability is key for doing business. The Government has substantially increased investment in building roads, improving connectivity, power transmission lines and customs checkpoints. We have utilized financing from donor countries where our resources are not enough.
I invite investments in commercially viable infrastructure projects as well. Nepal is a virgin land for investment in infrastructure, and it provides an attractive rate of return.
Modernization of agriculture is the topmost priority of Nepal, where we will need new technology, management, markets and innovations. Having diverse geographical landscape stretched from close to 60 meters to 8,848 meters high from the sea level, we can produce almost everything. We want to create a value chain in agriculture industry. Japan, as a technology pioneer in agriculture sector, may collaborate in technology transfer.
Human resource development, including middle and high-tech manpower is another area where government of Nepal is attaching high priority. This sector also offers good opportunity for Japanese investment.
The ancient culture and spectacular beauty of Japan has left a lasting impression on me.
Equally beautiful is our country, Nepal.
The Himalayan mountain range, 8 out of the 10 highest peaks in the world including the Mt. Everest, unparalleled landscape and biodiversity combined with rich cultural heritage offers enormous potential for tourism development in Nepal.
As you all know Lumbini in Nepal, the birth place of Lord Buddha, is the sacred destination for nearly a billion Buddhist followers. Every year around 25,000 Japanese tourists visit Nepal. Known as a peaceful and safe tourist destination, visiting Nepal is once-in-a-lifetime experience.
Mountaineering, trekking/hiking, sight-seeing, spirituality, pilgrimage and adventure activities are some of the products we offer.
Renowned travel advisor Lonely Planet has recently ranked Kathmandu valley among the world’s top ten tourist destinations for a visit in 2019.
Recently concluded air service agreement between Nepal and Japan offers new opportunity including direct flight connection between the two countries.
Nepal, therefore, provides an ideal destination for investing in tourism infrastructure and hospitality industry as well as a sought-after tourist destination for people from all age groups. The rate of return in tourism infrastructure is proven to be higher in Nepal.
The Government of Nepal has designated the year 2020 as the “Visit Nepal Year” with the goal of attracting at least two-million tourists from all over.
Taking this opportunity, I would like to request the travel/tour operators and wholesalers to enlist and publicize Nepal as apopular tourist destination and encourage the Japanese tourists to visit Nepal.
The aim of my visit to this great country is to renew our friendship and further elevate our relations. It is also about to enhance the scope and areas of economic partnership.
Relying on the strength of our friendship and mutual trust, I invite more and more Japanese companies to invest in Nepal.
Nepal is not a new destination for Japanese investors. There are already some Japanese investors in Nepal and the trend is positive.
In fact, all areas of our development priorities are attractive for Japanese companies. Let us work to create avenues of mutually beneficial economic partnership with the right mix of Japanese finance and technology and Nepali potential. The Government of Nepal is fully committed to extending all support to your businesses.
I assure you that it will be an immensely beneficial venture.
You will profit, not lose.
With these words, I conclude my remarks and once again thank the organizers for providing this opportunity to outline Nepal’s investment potential.
Thank you for your attention.
Domo Arigato Gozaimas!