Editorial

Need an Investment Promotion Agency

Making repeated complaints of lack of efforts from the government to promote investment, domestic or foreign, in the country, the private sector is being too naive.

For, the government system does not have any agency entrusted with the primary task of promoting investment. While the finance ministry is a bean-counter, the industry ministry is an inspectorate. The main task of the former is to bring in as much money as possible into the government coffers from all the sources and letting out of it as little as possible. In this process, if the offices under the finance ministry trespass the rules and exact more money than the rules allow, they should be forgiven as long as the exaction is going into the state coffers. Similarly, the primary duty of the latter is to make sure that the industrial units are carrying out their business exactly in accordance with the rules and methods fixed by the legislature.

The officers in these ministries must implement the rules handed down to them. If they do not perform this primary duty, they should be blamed of duty dereliction. Though they are also required to carry out the investment promotion function, this lies at the bottom of the priority list of the officers in these ministries. This is more so in the finance ministry, where the offices are judged by the size of the revenue they collect.

Sometimes, some officers, or even the ministers, from the industry ministry may try to be more earnest in pursuing the promotional function. However, these efforts seldom fructify because all such efforts are viewed with suspicion by the entire society - the seniors, juniors and peers within the bureaucracy as well as the anti-corruption bodies (now made as powerful as God Almighty), the press and the civil society. Since the promotional objectives of industry ministry are in direct confrontation with the revenue objectives of the finance ministry, the officers in the former should always be fighting with those in the latter. But such efforts of the industry ministry officers are never rewarded. Thus there is no motivation for them to pursue these objectives.

Thus there is a clear need for a separate, specialized agency at the national level entrusted with the primary task of promoting investment. And there are many successful experiences in this regard from countries like Singapore, South Korea, Costa Rica, Uganda, Malaysia, Sweden, Denmark and Philippines from which Nepal can learn and adapt.

One model for such an agency can be that of Nepal Tourism Board (NTB), which comprises of representation from both the government and the private sector. Though NTB does not provide a fantastically successful track record in fulfilling its objectives, it is not that hopeless either. Necessary modifications can be introduced in NTB model to make that the weaknesses are not replicated in the proposed investment promotion agency.

Send your feedback to the editor: bizline@mos.com.np  
2003 © Mercantile Communications Pvt. Ltd. P.O. Box 876, Durbar Marg, Kathmandu, NEPAL. Tel : 977 1 220 773, 243 566 . Fax: 977 1 225 407. Reproduction in any form is prohibited without prior permission. No part of the articles which appear in the internet version on NEW BUSINESS AGE may be reproduced without the permission of Mercantile Communications Pvt. Ltd. For reprinting rights, please write to us.  Send us your feedback : contact us.