– Pradip Ghimire
Increase in foreign investment in Nepal, the business security and protection of Nepali businessmen has become a matter of concern. Nepal is expecting more foreign investments in some of the mega projects but in the meantime suffering from the tiny investments on trade and service business.
Nepal cannot be separated from the competitive political, economic and strategic issues of China and India. It is clear that the two big Asian countries, the world’s first and second most populous countries, will have an impact not only in Asia but also globally. As a business, there is very less possibility of foreign investments where Nepal wants. Despite the government’s efforts to attract investment in some of the development sector that has not effective and the fundamentals has not been developed for such investments.
Latest figure, the Foreign Direct Investment (FDI) has increased in more than double ratio in 2018 to 2019 from US$ 67 million to 185 million dollar respectively. Among them, Indian investment in hydropower sector is the highest. But investing in small businesses that are changing the structure of the market is even more important and strategic.
China has launched a campaign through the Belt and Road Initiative (BRI) to expand its economic, political and strategic dominance in South Asia, Southeast Asia, the Middle East, Africa, Europe and the rest of the world one after another. This campaign is not a trivial one, it is a very deep strategic campaign. It has been analyzed that this Chinese strategy of connecting with all countries through connectivity, ie railways and roads, can be both an opportunity and a challenge for all countries. Apparently called the Economic Development focused on transportation and linkage, the campaign has been analyzed as a strategic project to expand Chinese presence.
At present, Chinese traders are expanding their Chinese network through trade growth in every country. It is easy to assume that it is a key part of China’s economic campaign. This campaign of BRI will fulfill three main objectives. The first strategic network will be expanded, that network will be rich and self-sufficient. Second, it will greatly contribute to China’s economic development and expand access to information, access to economic resources, and access to the country’s human and natural resources, ultimately dominate all of them. And third, China’s power will have ample opportunities to expand in the world. But China also has another strategic side: expanding its influence in a peaceful and non-violent manner. It is a strategy to motivate every country to take its side and develop an expansionist character in economic and trade form.
At a time when the United States is gaining influence in the world through arms and trade politics, China is moving forward with a very long-term and diplomatic policy, plan and program to make the world its own through economic and development projects. By connecting the developing countries, which are lagging behind on the path of neutral small and middle income development, to their support and develop linkage network, to help them in their interests and development, to enrich them as well, and to move them towards self-sufficiency. China has accumulated foreign currency and continues to accumulate technology and economic resources from around the world. Since products with brands from any country in the world are also made in China, it is natural for international currencies such as the US dollar and Euro to accumulate in China. China will not feel the lack of foreign exchange. It is expanding and will continue to expand its strategic network by investing the accumulated foreign currency in the countries of Asia and Africa through this BRI.
Nepal is also not free from Chinese influence. Chinese trade is expanding in the main business centers of Kathmandu, the capital, in such a way that if it develops at the same pace, it will be difficult to find Nepali traders in some markets in Kathmandu within the next five years. Chinese shops are opening in Kathmandu, especially in Thamel, King’s Way, New Road, Sundhara, Baneshwar, Maharajganj, Boudha and Swayambhu. Especially grocery, restaurants and wholesale, retail and department stores of Chinese goods are attracting Nepali consumers. Even Nepali and English signboards in some places including Thamel are being replaced by Chinese language boards. In the past, tourists from all over the world used to come to these areas to visit and buy goods. Now the Chinese come, go around, buy the same shop and stay there buying the same. Traditionally Nepali and Indian traders are being displaced from there. Signs of transactions written in Chinese have started appearing everywhere in the ATMs of banks in the area. Earlier, Nepali and Indian products were sold in those markets. At present, except for some Nepali handicraft items, only Chinese items are available. Hospitals of TCM (Traditional Chinese Medicine) based on Chinese medicine are opening largely in Nepal.
In this context, there are many issues that the Government of Nepal needs to think about and take initiative to revise its policies on business security, foreign investment and holding business from the foreign nationals. If Nepali businesses and Nepali businessmen continue to be displaced in this way, how long can Nepal’s economy remain in the hands of Nepalese? How the government deals with the fact that their economy is in the hands of foreigners in the name of attracting foreign investment? How to manage? The general people have not been informed that any work is being done on how to mobilize that investment in favor of Nepal and Nepali business community. How Chinese traders come, how they bring investment, how they take business in their hands, no one knows. They work quietly. Thus, the countries are not aware of the growing Chinese control over their economy. These are some of the scenes seen in the market with the naked eye. The inner side, the political side, is even more frightening. Everyone is realizing China’s role behind the formation and operation of the two-thirds government of the CPN (Maoist). The process of preparing Chinese strategic plans of large capacity (investment, productivity and impact) from government to private under government protection and encouragement has been going on for some years now. From hydropower projects to groceries, industrial production, mineral extraction, expansion of trade and service companies, includes investment in education, health, tourism, etc. The findings of Chinese investment areas in Nepal are in progress with massive homework in terms of investment and placements. Although somewhat delayed due to the outbreak of Covid 19, Chinese investment projects in Nepal are now get ready to start shortly.
The Chinese government, which has close ties with the Communist Party on the basis of political beliefs and ideology, not only developed the newly formed CPN, the largest component of the Communist Party, as its partner, but also merged the two parties, CPN (UML) and the CPN (Maoist) into a single CPN. During the election, Chinese government helped them brought into power. It is clear from the past and present activities that they are also playing a supportive role in running the government and the party.
Nepali policymakers, especially the government and political parties, do not seem to be doing any serious homework to utilize the Chinese investment and trade promotion. Isn’t such homework necessary? Who can keep Nepali society and business safe in future? Foreign investment and trade potential need to be carefully considered, not just for China’s current investment, but also for other potential investments. When discussing investment and business, many other issues come to the fore such as what is the difference between the facilities and security provided by the government in the business done by Nepali citizens and the business done by foreign nationals?
Governments, political parties, civil society, especially business community, should not delay in ensuring the conditions for the security and investment promotion of the business sector institutionally by developing common agendas and minimum norms in this regard. Only time-honored efforts can be worthwhile. Tomorrow’s situation may get out of hand, so it is important for everyone to pay attention to this serious issue.