| Foreign direct investment (FDI) commitments plummeted to Rs 5.53 billion in the first nine months of the current fiscal year as the country braced for the double whammy of power shortage and unrest in the Tarai belt. Last year in the same period, the country had received FDI commitments of Rs 7.96 billion. "Lengthy load-shedding hours every day and frequent strikes in the Tarai are the main reasons for the decline," a high-ranking official, of the Department of Industry, requesting anonymity, told myrepublica.com. Investors feared that the power crisis faced by the country would result in greater usage of other energy sources, subsequently raising overhead costs. Furthermore, protests in southern Nepal--a key export-import point--raised the chances of there being more obstruction in the movement of raw materials or finished goods that have to be imported into or exported out of the country. Although these fears resulted in significant downturn in FDI commitments, the figures of this year are higher than that of the year before last and earlier. Besides, the country also received more project proposals this year compared with the whole of the last fiscal year. This year, the country received proposals for 150 projects from 29 different countries, with India topping the list. Nepal´s southern neighbor has proposed that it will invest Rs 2.34 billion in 28 different projects. China comes second with proposals for 51 projects worth Rs 875.24 million. Singapore then follows with proposals for four projects worth Rs 564.50 million. If all the projects proposed by foreign investors come into operation, 8,305 additional employment opportunities will be created in the country. The statistics provided by the Department of Industries show that most of the investments are going into the energy sector, followed by manufacturing. Foreign investors have proposed to invest Rs 2.20 billion in the energy sector and Rs 928.14 million in the manufacturing sector. However, in terms of job creation, the minerals sector tops the list. A total of 2,635 jobs will be created in this sector if all the projects worth Rs 474 million come into operation. Nepal had received the highest FDI commitments, of 9.81 billion rupees, in the last fiscal year, as a housing boom and the newly explored potential for hydropower ventures lured overseas investors. The Department of Industry had called the windfall "a sound peace dividend in foreign direct investment." |
| Source: Myrepublica.com |
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