National 1 (Spotlight Weekly)

Persisting Obstructions

An American official points how the investment-friendly policies are not working in the ground

By SANJAYA DHAKAL

An official at the American Embassy in Kathmandu neatly summarized how the existing procedures and policies in Nepal are obstructing the flow of foreign investment. 'The devil is in the details,' said Matthew M. Eussen, third secretary at the political/economic section of the Embassy recently in an interaction organized by the American Center.

He said the nitty-gritty of procedures are a big repellant. 'Things like delay in licensing, multiple ministries involved, difficulties in obtaining business visas, variations in duty charges, variations in tax levies, lack of transparency and petty corruption stand in the way of any potential investor.'

He compared the one window policy of the government to the 'one window with 4 to 5 doors'. He said he has to deal with complaints of this nature from potential investors frequently.

'The foreign investors particularly the US investors face challenges due to Nepalís list of industries where foreign investment is banned,' he said. 'The sectors like tourism and trekking, which could have lured investment, are in the list. And even those industries where foreign investment is allowed, the domestic industries are heavily protected.'

The United States is an important trading partner of Nepal. The total exports of Nepal to the USA was around 130 M US dollar last year whereas it imported goods and services worth 25 M US dollar in the same period. 'In 2001, the developing countries accounted for more than 40 percent ñ over 300 B US dollar ñ of exports to the USA,' said Eussen.

Garment is the main item Nepal exports to the USA. Over 80 percent of Nepalese garment exports are made to American market. But the recent economic slowdown has immensely hurt the sector. 'In the year 2001, the exports fell by 23 percent (compared to previous year) and in the year 2002, it further fell by 22 percent. In the year 2000 our total exports peaked to 14-15 billion rupees. It came down to 10 billion rupees in 2002,' said Udaya Raj Pandey, general secretary at the Garment Association of Nepal. Pandey further adds that in the first couple of months of 2003, however, the exports have picked up impressively.

Currently, a senator from California Dianne Feinstein has drafted a bill to help Nepal get duty free and quota free access to US markets. If passed, the bill could tremendously help the Nepalese economy. 'Right now senator Feinstein is the only sponsor of the bill. There do not seem to be any co-sponsor. There is also another bill on carpet that could help Nepal,' said Eussen. The Feinstein bill has been referred to the Senate Finance Committee. 'Once the multi-fibre agreement expires due to WTO, Nepal will have big challenge to sell garments and carpets,' he said.

JUSTICE IN ENVIRONMENT

Most of the conflicts witnessed in different parts of the world have roots to environmental injustice. The concept of environmental justice is based on distribution justice, according to experts. When environment is exploited for the benefit of a handful of persons and to the detriment of majority of underprivileged people leading to injustice and conflict.

At a workshop on Environment Justice organized on May 24 by Forum for Justice and Martin Chautari to entice journalists about the concept, Dr. Jagannath Adhikary presented a paper describing how the conflicts in places as far as Assam, Jharkhand, Philippines and Zimbabwe were rooted in environmental injustice. 'Even in the case of Nepal, the environmental injustice is rampant in western and far western region where Maoist insurgency took hold,' he said.

He cited how the big multi national companies were reaping the benefit by exploiting disadvantaged people. 'In the year 2000 alone, MNCs reaped benefits worth 30 billion US dollar from transactions of herbal medicines. Though they used the knowledge of indigenous people, the latter was given only a minute portion of that benefit.'

'Environmental justice is the right to environmental information,' said Kalyan Shrestha, judge at the Appellate Court, Hetauda. He said that though developed countries consumed the lionís share of energy, the environmental impact was being burdened by people of poor countries. 'This is environmental injustice. The policies of developed countries are market friendly not environment friendly.'

Chiranjibi Bhattarai, executive director of the Forum for Justice, highlighted the need to entice Nepalese journalists about this concept so that they could better report the issues for the benefit of society and nation. n