Minister for Finance Barsa Man Pun has emphasized the need for bringing in maximum foreign investment in order to stimulate growth and development in Nepal. Addressing an international conference in Kathmandu the other day, Finance Minister Pun expressed the commitment of the present government to create investment friendly environment so that the country would achieve double-digit growth. It is absolutely true that foreign investment is highly essential for countryís economic development and industrialization. The global experience has also shown that countries that opened up for foreign investment have achieved high rate of growth and prospered. Our neighbouring countries China and India are the best examples of how they attracted foreign investment and utilized it to boost economic growth.
China and India liberally opened up their economies and adopted the policy of bringing in maximum foreign investment. As a result, these countries which were poor until a few decades ago have now become economic giants of the world. Nepal, too, could benefit a lot if we bring in more foreign investment. Nepal has also adopted liberal economic policy and has been seeking external investment in various sectors. Some progress has definitely been made in brining in foreign investment. However, foreign investment has not yet been to a desirable degree due to many factors. Peace, stability, infrastructure and investment friendly environment are the prerequisites for foreign investment. Foreigners would be willing to invest only when they are assured of the safety and security of their investment. Nepal was in a state of uncertainty and instability for the last one and a half decades, which did discourage foreign investment. As a result, Nepalís economic growth declined. With the beginning of the peace process, investors are encouraged to invest in Nepal.
Nepal has tremendous potentials for foreign investment. Hydro power and tourism are some of very lucrative sectors for foreign investment and foreigners are, indeed, interested in investing in these sectors. After Dr Baburam Bhattarai-led government came to power, some new and more positive initiatives have been taken to encourage foreign investment. As a part of the move to guarantee external investment, Nepal and India have already signed Bilateral Investment Protection Agreement, which has created a favourable environment for Indian investment. Nepal is preparing to sign similar agreements with other countries. The signing of the investment protection treaty with India and its willingness to sign a similar treaty with other countries is an added commitment of the present government to bring in more foreign investment into the country. In the present interconnected world, internal resources alone are not sufficient to stimulate industrialization and economic growth and external investment is a must. External investment is more necessary in Nepal as it has been struggling hard to cope with the rapid change in the world in general and in its neighbourhood in particular. The present government seems to be well aware of this fact and is effortful in bringing in more foreign investment.