Despite various attempts FDI to Nepal dips by 2.85 percent

KATHMANDU: Although the government has done various attempts to attract foreign investment in Nepal by announcing Nepal Investment Year 2012-13 and formation of Investment Board Nepal, the foreign direct investment (FDI ) has gone down by 2.85 percent in the fiscal year 2012.

The latest World Investment Report – 2013 prepared by the United Nations Conference on Trade and Development (UNTCTAD) has informed that Nepal attracted FDI worth $92 million in 2012, against $95 million in 2011.

What is more worrying is Nepal stood second last in attracting FDIin 2012— just ahead of Bhutan, but behind war-torn Afghanistan. Afghanistan received $94 million, while Bhutan got $16 million inFDI in the year, according to the report. Other South Asian states are far ahead when it comes to attracting FDI .

According to Department of Industries, FDI commitments in the first half of the fiscal year was at Rs 9.53 billion, up from Rs 7.14 billion in the entire FY2011-12. Nepal is among the 18 least developed countries (LDCs) that attracted less than $100 million in FDI in 2012. Although the total FDI into LDCs increased by 20 percent to $26 billion, Nepal is among the countries that posted decline in FDI inflows, according to the report.

FDI growth in LDCs was led by strong gains in Cambodia (inflows were up 73 percent), the Democratic Republic of Congo (up 96 percent), Liberia (up 167 percent), Mauritania (up 105 percent), Mozambique (up 96 percent) and Uganda (up 93 percent), the report said. It said Nepal is also among the six landlocked countries that received FDI between $10 million and $99 million. Only Burundi received less than $10 million in FDI . The political stalemate of the country has been forcing the national economy to pay high price.