Mr. Chairperson,
Excellencies,
Presidents of the Chambers of Commerce and Industry,
Members of my delegation,
Ladies and gentlemen,
I am honored to address this august gathering of business leaders from India and Nepal. I feel that an interaction of this kind helps understand each other. They place us on the same page about the challenges and opportunities in both our countries.
Friends, I stand before you today with one simple message.
After years of policy stalemate and instability, Nepal is on the verge of a growth take-off. We are ready to gather pace, and we warmly invite you to engage with us. We welcome you to do business in Nepal, invest there, create jobs, and nurture a new climate of innovation and entrepreneurship.
I call upon both our business communities to work together. This is the only way to advance our goal of greater prosperity by building on the strong social ties and heritage that we share.
Ladies and gentlemen,
Two years ago, in 2015, we ended political transition by adapting a highly progressive constitution. With the historic political gains secured, the mood in Nepal is to turn a page and move forward.
We now want to take on the generational challenge of rapid economic progress. And the time is right for many reasons.
First, there exists a strong convergence of views among Nepal’s major political parties that the country is poised to stand at a critical economic juncture. We cannot lose sight of this window of opportunity. Nepal is truly open for business.
Second, with the rise of India and China as global economic powers, all major growth poles in Asia are within a few hours of flying distance from Kathmandu. Nepal can be the new melting pot for tourists, traders and investors. Our landscape and culture of hospitality are an additional draw.
Third, we are restarting the next generation of economic reforms. In the early 1990s, we took a bold policy departure to make our economy dynamic. In my first term as Prime Minister over twenty years ago I introduced the Value-Added-Tax, similar to the GST launched recently in India. While reforms of that scale have not taken root since, this will now change. Just in the past few months, we have enacted laws and policies on foreign investment, public-private partnership, special economic zones, industrial enterprises, labor, mining, banking, and intellectual property.
Fourth, we are actively pursuing new processes and institutions to attract large-scale investment. The 900 megawatt Arun-3 and the 900 megawatt Upper Karnali hydropower projects both involve Indian capital and are being facilitated by the Investment Board of Nepal. Early this year, we hosted the Investment Summit where we attracted a pledge of 14 billion dollars, which is almost half the size of our GDP.
Fifth, we offer flexible rules and incentives on returns on capital and profit. As a least developed country, we enjoy duty-free access to the European market, and have recently received preferential market entry into the United States for over 60 products. Nepal is an attractive platform for export-oriented investments in products that have a high value-to-weight ratio. Our labor force is loyal, disciplined and affordable. And in an era of climate change, we aim to meet all our energy needs through clean sources. Nepal’s hydropower, for example, can spur high-energy high-tech sectors, and displace dirty sources of fuel across South Asia.
Let me also be honest with you. We are still a low-income country, and we have our share of struggles in building a functioning system of democratic government. Many of the attributes that I listed may not always be honored in practice in the spirit they are intended. But here is my solemn pledge to you. We will direct our most sincere efforts to court foreign investment, to secure and retain them, and to ensure they succeed.
Ladies and Gentlemen,
Both India and Nepal today have large young population. In this fourth visit to India as Prime Minister, my goal is to look much more into the future than the past. In the interest of our youth, my talks with Prime Minister Modi will emphasize a forward-looking development agenda that is defined by collaboration on projects that can inspire our societies and transform our economies in the 21st century.
For a landlocked country, I am convinced that intense physical connectivity through roads, rail, and air is key to lowering business costs and deepening people-to-people ties.
Nepal today faces a large trade deficit with India. Our production base is weaker than it was 20 years ago. But with campaigns like “Make in India” we are hopeful that we can revive the successes of the mid-1990s. Through FDI, we are eager to participate in the scaling up to benefit from the regional value chain.
Hundreds of thousands of young Nepalis migrate overseas for gainful work that is not available at home. We are optimistic that we can revive our manufacturing and create jobs in large numbers by partnerships with industries from India.
We are also inspired by the scale of ambition of India’s IT sector; and the vast social innovations aimed at lifting the poor, and improving the quality of governance.
Ladies and Gentlemen,
I believe that great political changes must go hand-in-hand with socio-economic progress. Otherwise, the legitimacy of the political gains made dissipates.
It is for this reason that our young republic has no choice but to amplify its economic ambition. Our vision for Nepal by 2030, therefore, is to make it a vibrant middle-income country. We want our society to celebrate risk-taking, entrepreneurship and wealth creation.
Only with this change in mindset can Nepal pave the way for massive mobilization of private investment. On my part, dear friends, let me conclude with three basic commitments:
(1). We will do all we can to signal signs of reforms that are credible and not reversible.
(2). I will do my best to relax the most binding constraints in infrastructure.
(3). Through institutional reforms that simplify procedures, deter rent-seeking, and create a level playing field, I assure you that you will be part of an historic process of structural transformation in a country where people’s potentials are yet to be realized and the bounty of our natural resources are yet to be tapped.
By enriching our bilateral ties — through the force of commerce, production and exchange — I am hopeful that we can elevate our relationship to levels never seen before.
Thank you and Namaste!