KATHMANDU, June 14: The government has failed to provide protection to the business fraternity and their property, and create an investment climate despite its tall talks, the private sector says.
Just a couple of weeks ago, a businessman was kidnapped from the Tarai and this week saw a host of attacks on a telephone company’s properties across the country exposing how weak governance is and that state machinery is also too indulgent on politics pushing economic issues to the back burner.
The private sector is concerned about the deteriorating security situation as it damages the investment climate in the country. They say attacks on physical infrastructure of any private firm operating in the country will discourage not just domestic but also foreign investments.
Taking into consideration the recent attacks on the base transceiver stations (BTS) of private telecommunication company Ncell, different private sector bodies have said that such insecurity and threats will damage the country’s investment climate further and restrict Foreign Direct Investment (FDI) in the country.
A group of unidentified people on Saturday had set Ncell’s 24 BTS on fire in different districts, which according to Ncell, damaged elements of telecommunications infrastructure directly affecting 550,000 subscribers in rural parts of Salyan, Dang, Kaski, Jhapa, Myagdi, Dhankuta, Morang, Baglung and Gorkha.
“The investment climate in Nepal is already not that favorable due to various kinds of instability, procedural hurdles and unrest,” Hari Bhakta Sharma, the president of Confederation of Nepalese Industries (CNI) told Republica, adding: “Such attacks not only discourage foreign investors from investing in Nepal, but also depresses domestic investment.”
Sharma says attacks on any type of industry is a direct threat to investment as a whole and has to be controlled if investment is to be promoted in Nepal.
Private sector bodies also say such insecurity to industries is the reason why both domestic and foreign investment in the country is largely going down.
As per data from the Department of Industry (DoI), FDI commitments in the first 10 months of Fiscal Year 2015/16 dropped by 84 percent to Rs 10.44 billion, compared to the same period last year.
Similarly, domestic investment pledges in the first ten months of Fiscal Year 2015/16 was down by 45 percent to Rs 68.74 billion, compared to the same period in the previous year.
Pashupati Murarka, the president of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), says that attack on industries and other firms will even cause restricting of already-planned investment. “Actual investment is much lower than pledged. With security threats like the one faced by Ncell, both domestic and foreign investors will find no reason to invest in Nepal,” Murarka says.
Commenting on the recent attacks on Ncell, Murarka said that tax issues of Ncell is a matter between government and Ncell and that these two parties should solve it. “Any political party, individual or other group should not try to intervene in the issue by attempting to harm Ncell physically,” Murarka adds.
Ncell in recent months was dragged into controversy, charged with paying capital gains tax when its ownership changed hand.