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November, 2003 |
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Cover Story |
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NRN Hopes The
post-Dashain jamboree of Non Resident Nepalis (NRN) in Kathmandu
concluded on October 14 with the Prime Minister and Finance Minister
promising to bring out a law within four months to accommodate the
demands made by Nepali diaspora to facilitate their investment in Nepal.
Evaluating the process, participation and conclusions of the conference
yield some interesting findings. Though
no significant new facilities were announced by the government for the
NRNs, still the mood was upbeat across all three groups of participants
- the NRNs, the Nepali private sector and the government. The NRNs were
happy that they were treated very well during the event. The organisers
(particularly FNCCI) were happy at the significant turnout of the NRNs.
Though only 206 NRNs participated in the event, according to the
organisers, and it was much less than the targeted 500 (and there were
some cases of young boys and girls registered as participants along with
both of their parents), the turnout was significant when considered
against the perception abroad about the security situation here after
the Maoists went back to their more than seven year old insurgency just
a couple of months ago. Equally happy was the government as it now can
use the significant turnout and the peaceful conclusion of the event as
a proof that the security situation is in its control.
The
government was a lot eager to get some positive evaluation from the NRNs.
That explains the readiness with which the Prime Minister and the
Finance Minister promised to fulfil almost all of the demands of the
NRNs. Some observers also went on to attribute this to the fact that
both of them are fathers of some NRNs. While
the NRNs and the organisers were cherishing the event, there also were
some bitter remarks circulating about the NRNs. Some sections of the
society even went on to say that the NRNs or PNOs (People of Nepali
Origin) were in fact traitors to the nation as some of them had gone
abroad for further study on government scholarships and did not return
home upon completion of their studies. This negative perception about
the NRNs was matched by similar negativism from some NRNs who did not
resist the temptation to make speeches at the conference itself deriding
the residents as a bunch of do-nothing lazybones who could not manage to
go overseas for the reasons of their incompetence and while staying back
were causing all sorts of harms to the country.
One
important aspect about the event was the low presence of
investors/businesspersons. Some prominent NRNs who are running good
businesses abroad were conspicuous by their absence. Some regions sent
physicians and professors as their representatives who could not make
any decision whether to commit investment or not. They just said that
they would hold a meeting of their members when they go back to the
region of their residence and report their observations to business
owner friends. This may be the reason why not even a single MOU or joint
venture agreement was reported signed during the event between resident
and non-resident Nepalis, except the one about the proposed old-age home
at Devghat.
It
can be noted that the expectations of high investment coming from the
NRNs needs to be qualified. The population of PNOs is insignificant as
most of the Nepalis living abroad are first generation migrants who have
just started earning good money. Though the number of PNOs can be put
very high as the Nepali speaking people in Burma and India qualify for
this title, the investment potential from them is not significant,
except a few individuals like Manisha Koirala and Udit Narayan Jha (who
must have earned good money from the Mumbai film industry) and some
businesspersons in Burma. One
very important, finding of the conference is that many NRNs who want to
invest in Nepal would face a punishment under one of the existing laws
of the country. As Bharat Raj Upreti, a renowned corporate lawyer, noted
in a paper he presented to the conference, the Foreign Investment
Prohibition Act 1964 (2021 BS) has a provision for six months of
imprisonment to a Nepali citizen who invests in a foreign country
without the prior permission of the Nepali government. It means, as long
as this law is not repealed any NRN who wants to invest as NRN in Nepal
has to collect proofs to show that the money he/she has earned from
abroad does not come under the purview of this law.
This
indicates to the urgent need for a special law to deal with NRN
investment. However, the lawyers also say the existing laws do not stop
the NRNs from investing in Nepal. In fact, there are many NRN investors
with business holdings in Nepal, the prominent example being Dr. Upendra
Mahato and his colleagues from Ex-Soviet Union republics. But as their
investment is in the capacity of a Nepali national, they cannot take
their investment and profits back to where they are living now because
of the existing foreign exchange law, while other foreigners who bring
in Foreign Direct Investment (FDI) can avail of such facility.
Therefore, one of the few refrains of the NRNs during the conference
was: "We do not get even those facilities that the foreigners are
getting". The PNOs do not have this problem, as they can invest
here as any other foreign can. But they are asking for something extra
as the facilities than what the other foreigners are entitled for.
Equally
important is the fact that under the existing laws, the money that the
NRNs bring from countries other than India, Thailand, Sri Lanka,
Austria, China, Korea, Mauritius, Pakistan and Norway can be taxed in
Nepal as she has double taxation avoidance treaty with only these
countries. Next
conclusion that can be derived by going through the papers presented in
the conference and the proceedings thereof is that both the Nepali
organisers (government as well as the private sector) and the NRN
participants are trying to hook on the emotional nerve of each other.
The government and the private sector of the country were requesting the
NRNs and PNOs to be magnanimous and come forward to help the country,
while the NRNs and PNOs were stressing on the point that they are ready
to help the motherland in this critical juncture provided the motherland
extends them something extra to what she is providing to the aliens. This
provided a strong point for the critics. "Trying to get both of the
facilities that the Nepali nationals and foreign investors may enjoy,
the NRNs want to have the cake and keep it too." One
important point, however, that cannot be forgotten is that this
conference was not at all aimed to start NRN investment flowing into the
country from the moment the event concluded. As the FNCCI officials were
repeatedly emphasizing, it was more an effort to know each other and see
if anything can be done to mobilize, for national development, the
Nepalis scattered around the world. In that respect, this meet was
really successful. Rs.
5 million spent on it (Rs. 1m from HMG, Rs. 2.8m from FNCCI and NRNs and
Rs. 1.2m raised from registration fee) can be considered put to good use
if the meet has helped to reduce the negative perceptions about each
other between the NRNs and the Nepalis. But that will be seen only in the future. |
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