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October, 2003 |
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Interview |
"It's our duty to invest
here"
Dr.
Upendra Mahato, originally a Nepali educated in Russia, holds a Russian
passport now and is among a few prominent businessmen not only in Russia
but also in Nepal. At present he is actively busy in developing a common
viewpoint from Non-Resident Nepalis (NRNs) to be presented in their
first conference ever scheduled to be held in Kathmandu during 11-14
October. Excerpts from an interview with him: How does it feel being addressed as a nonresidents Nepali (NRN)? As of today I don't feel any special. Today NRN can be taken as "sons", who have gone far away from their "mothers". The word NRN must be associated with some sort of responsibilities of Nepal and Nepali as well as some sort of affiliation to the Motherland. Apart from Nepal and former Soviet Republics you have investment also in Cyprus, China and United Kingdom. What are the specific advantages in investing in these countries and former Soviet republics than investing in Nepal? Russia is a very big market. It is an ocean for the business people. There is always a good opportunity to work in a big market. I feel very comfortable to work with Russian people. Among the major advantages in investing this and other countries you mentioned are: more developed financial rules and regulations without any problems, possibilities of easy repatriation of investment and markets are quite big and so more profitable.
What are the specific points of the offers being made to the NRNs at the gathering that is taking place next month in Kathmandu? If you are asking what the government is planning to offer, then frankly I am not aware of it as yet. It will be better to ask this question to the government authority of Nepal. But I regard this conference as one step forward towards the long journey. As this is first conference of NRN, it will not be good to expect a very big result. It will give a chance to NRN also to know each other personally and to think about the betterment of our country. What should have been done? There are a lot of things to be done. First and most important is to clarify the legal status of NRN and People of Nepali Origin (PNO). As a person who has long been in active contact with most of the prominent NRNs, how do you assess the investment potential of the NRNs ? Over 1.2 million Nepali work and live outside the SAARC countries and this number is increasing rapidly. There are Nepalis abroad with huge experience and exposure. There are successful managers, professors, engineers, people holding high ranking positions at UN and other such prestigious organizations. Some of them own private companies, employing thousands of citizens of respective host countries. There is absolutely no doubt that Nepalis living abroad have enormous potentials and resources to serve and support Nepal. Most significantly, they are sentimentally quite attached to Nepal. Although Nepali Diaspora is still very young and smaller in comparison with the Diaspora of other South Asian countries, remittance is already playing a vital role in our economy and it is constantly growing. According to the latest statistics, the Nepalis working abroad have sent more than 1.0 billion US dollars to Nepal through various channels in 2001-2002 alone. This amount would go up significantly if legal and banking provisions are made to facilitate foreign remittances for deposits and investments in the country. According to a survey conducted by the Department for International Development (DFID) of the Government of United Kingdom, Nepal received about US $ 506 million (Nepali rupees 35 billion) through remittances in 1997 and this figure has almost doubled in 2002. It is clear that the amount of remittances will increase further if the HMGN encourages and attracts investments from NRN as the Governments of India, Bangladesh, Pakistan and Sri Lanka do from their respective overseas citizens. It is a field where we can learn from them. How has been your experience so far in investing in Nepal? For example, from Sri Sagarmatha daily to Kantipur TV? Though I live abroad, I am proud that I am a Nepali. I invest here because of my sentimental attachment to the nation, rather than to get a quick return and big profit. Few of my colleagues from Russia and I have identified some sectors of investment in Nepal like health, education, hydropower and media. Sri Sagarmatha was not a great success but we have always learnt from our mistakes. It did not deter us from investing in various other sectors in Nepal. Health, education, hydropower sectors have huge potential in the country and we are quite satisfied with our progress in these areas. What learnings do you share with the other NRNs who are willing to invest in Nepal? Wherever you work, you will have the problem and risk. I take it as something natural. I advise NRN friends to invest here. After all this is our country and it is our duty to invest here. We have to do something for the institutional development of NRN investment policy, so that the problem is reduced as far as possible. That's why we are organizing the NRN conference. My only advise to NRN friends is: "let us share ideas and join our hands to make this long suffering country one of the most prosperous in the world." What particularly do the NRN want the Nepali government to do so that it would be easier for them to increase investment in Nepal?
Sometime ago the Russia-Nepal Chamber of Commerce and Industry (RNCCI) presented a few suggestions to our government. To quote some of them: the legal status of NRN should be defined, permit NRNs to open foreign currency accounts in authorized banks in Nepal, do not levy any tax on foreign remittances and interest earned on them, arrange for avoidance of double taxation, companies managed by NRNs should be permitted to invite foreign nationals for specialized jobs and for this a more flexible work permit regime should be at place, capital repatriation facilities should be provided, provision of duel citizenship should be in place, long term visa for PNO and their family should be arranged, etc. Apart from these factors, of course it is needless to reiterate that the restoration of peace and an environment of economic stability are the prerequisites for any foreign investment. Nepali government seems to have some very important provisions that make Nepal a better investment destination. The example is the income tax rate, which is the lowest in South Asia and many other countries. But why have not these been effective to attract investment? Low income tax rate is necessary but not sufficient to attract foreign investment. There must be high Investment Securities and the Government must be stable. Peace must be restored in the country. And the points that will be raised by NRN conference must be considered seriously from government side. You have already burnt your fingers by investing in media industry in the past from the fiasco of your newspaper venture. What latest changes attracted you to invest in the TV media now? As I said earlier, I really don't think that I burnt my fingers by investing in Sri Sagarmatha. The venture just could not live up to our expectations, which unfortunately resulted in its closure. Of course, I was disappointed but experiences of this kind are valuable in business. It came out to be an important point on my learning curve. Why media again? I never had any doubts that media is an attractive investment area. We really cannot envisage a truly democratic state without the free media. Unfortunately the essence of "free" media is completely lost when it is owned only by the state. The state-owned print and electronic media are inherently incapable of incorporating different views. Therefore, emergence of strong private media is a natural phenomenon in a democratic society. That is exactly what is happening in Nepal. It is not surprising that media is attracting a considerable private investment in the country. Has the recent budget addressed any of NRNs concerns? The budget has promised "necessary legal provision to increase investments of NRNs in Nepal." Although we do appreciate the government's promise, we have yet to see those legal provisions elaborated and materialized. Such promises were made in previous budgets as well but somehow they remained ignored. Initiation of the NRN conference certainly is a very positive gesture on the part of the government. We genuinely hope the conference may finally pave a way for the legal recognition of NRN issues. What are your future plans? Putting all my efforts to see a peaceful and prosperous Nepal remains my only future plan! Almost 15 years in business in various foreign countries have taught me an important lesson: personal wealth has little meaning when the native land is full of destitution. That's why currently I am quite focused on establishing a network of NRN societies/associations spread all over the world and making the forthcoming NRN conference a success. Because I am sure when financially and intellectually capable Nepalis from the entire world join their hands, the country at last might get a chance to go beyond the "poverty alleviation" slogan. You said you are attending meetings in different countries regarding the investment by NRNs. Could you elaborate? For the preparation of NRN conference we have been meeting with friends from different countries. I have attended meetings with representatives of Nepali Diaspora from UK, USA, Germany, Australia and held teleconferences with friends from Hong Kong and Arabian countries. On the basis of these deliberations, we have been preparing suggestions to increase NRN participation in Nepali economy. All NRN friends, whom we talked to, want to see Nepal a truly democratic, prosperous and peaceful country. They are worried about increasing violence/insurgency and want the issue be resolved through peaceful negotiations. It is not just a desire from afar but actually they are seeking suitable roles. Every Nepali living abroad is willing to take part in our country's social and economic transformation from his/her area of expertise provided the state reciprocates with some essential legal provisions. We are going to facilitate expansion of Nepali culture and arts the world over and Nepali exports through the use of NRN communication channel. |
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