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The Remake of a State5. Foreign direct investment in NepalNepal opened the doors to foreign investment in recent times. Since thegovernment opened some service sectors to foreign investment in 2005,progress has been made in allowing private operations in sectors thatwere previously government monopolies, such as telecommunicationsand civil aviation. Licensing and regulations have been simplified, andeven 100 per cent foreign ownership is now allowed in some sectors. Asa result, the total number of FDI projects has increased almost tenfold inthe last decade.Table 3.3 Joint-venture industries in operation in Nepal(as of mid-April 2008)SN CountryCons -tructionSectorTotalNo. ofIndustriesAgrobasedEnergybasedManufacturingMineralServiceTourismTotalProjectCost(MillionNRs)1 India 1 89 1 17 10 118 13468.212 The USA 1 1 13 23 12 51 8924.543 Japan 4 1 9 10 20 44 1329.054 China 1 15 7 7 30 1869.175 SouthKorea11 3 6 20 528.286 Germany 1 7 4 6 18 278.887 The UK 1 6 2 6 15 326.748 Switzerland1 2 2 4 9 147.249 France 5 1 3 9 129.4710 Norway 1 3 1 1 6 6690.9511 Others 1 1 38 21 21 81 6144.0412 Total 9 3 6 196 1 91 95 401 39836.57Source: Adapted from FNCCI (2009)Most of the incoming FDI is in the form of joint ventures in Nepal, thelatest figures of which are shown in Table 3.3. Most of these investmentsare in manufacturing, tourism and service sectors. However, this muchtalked about foreign private investment has not been forthcoming so farto catalyse the private sector and to meet the growing needs for capitalinvestment. The primary reasons for this have been the continuing politicaland administrative instability, and lack of adequate basic infrastructure.Continued political and social stability, together with economic prosperity53
Private sector in post-conflict state buildingand government policies conducive to FDI in an individual country helpsmaintain its attractiveness as host location. But in the case of Nepal, theinvestors have not seen this stability in the recent years. The policy makerscertainly may have presented a fairly attractive foreign investment policy,but they have realised little, it seems, that what a nation needs is a stableenvironment for the policies to have any effects and attract the potentialinvestors. Basic infrastructure needed to support investment is woefullyinadequate. The supply of power, especially outside Kathmandu Valley,and water is insufficient. Transport is difficult, a problem compounded bythe fact that Nepal is landlocked. Such poor infrastructure and high riskshave made the market least conducive to investment. Moreover, the lowmorale of private investors as explained in the earlier section and lack ofconfidence in the government has kept Nepal away from the potentialinvestors. However, with the help of effective foreign aid, it is possible tomake the necessary transformation and attract more private investment.Foreign aid can act like a catalyst and a facilitator to this transformation.But in Nepal, it is having quite a different impact and its role is also beingquestioned.6. Foreign aid and its impactEver since Nepal started receiving foreign aid, the international communityhas been increasingly involved in its development process. The assistancereceived from them has been on the rise to a level where at one pointdisbursements constituted around 80 per cent of the development budget(Sharma 2000). Such a high degree of aid dependency has inevitably hadsome serious political implications. In the last decade of the Panchayatperiod, there was a tendency in the domestic political debate to see arelationship between the dominant powers in the country and foreignassistance. While the government projects were by and large unable toreduce poverty, development through foreign aid essentially became ametaphor for the maintenance and strengthening of the traditional powerstructure. The political picture has gone through several changes sincethen; however, foreign aid continues to constitute a very large share ofthe development budget.Looking at the summary of income and expenditure for the fiscal year2007/08, it becomes clear that there is still a high degree of dependenceon foreign aid. Loans and grants together financed almost 45 per centof development expenditure in 2008/09 with the share of grants beingconsistently higher than that of loans. Despite this significant inflow of54
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Preface and acknowledgementState bu
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Chapter 13 Reconciliation and reint
Page 17 and 18: Post-conflict state buildingdebated
Page 19 and 20: Post-conflict state buildingOthers
Page 21 and 22: Post-conflict state buildinglead to
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Page 25 and 26: Post-conflict state buildingThe dev
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Page 30 and 31: Chapter2Conceptual framework forpos
Page 32 and 33: The Remake of a StateThe first and
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Page 36 and 37: The Remake of a StateFigure 2.4 Int
Page 38 and 39: The Remake of a StateDealing with t
Page 40 and 41: The Remake of a StateFigure 2.8 Fac
Page 42 and 43: The Remake of a Statescience and in
Page 44 and 45: The Remake of a StateKapilvastu dis
Page 46 and 47: The Remake of a State2.7.3 Controll
Page 48 and 49: The Remake of a Statetemporary. The
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Page 52 and 53: 2.8 International relations and for
Page 54 and 55: The Remake of a StateThough state e
Page 56 and 57: The Remake of a StateThese mismatch
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Page 60 and 61: Chapter3Private sector in post-conf
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Page 64 and 65: The Remake of a StateThe data prese
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Page 70 and 71: The Remake of a StateThe SLF campai
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Page 76 and 77: The Remake of a StateThe World Bank
Page 78 and 79: Chapter4Addressing poverty andpromo
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Page 82 and 83: The Remake of a Statewidened gap be
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Page 88 and 89: The Remake of a StateBox 4.4 Rajaya
Page 90 and 91: The Remake of a Statecoaching and s
Page 92 and 93: The Remake of a State6.1 DAGs or bi
Page 94 and 95: The Remake of a Statetime taken to
Page 96 and 97: The Remake of a StateReferencesBenn
Page 98 and 99: The Remake of a StatePokharel BK. 1
Page 100 and 101: Chapter5Sustainable tourism and pos
Page 102 and 103: 2. Theoretical backgroundThe Remake
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Page 106 and 107: The Remake of a Statenation from to
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The Remake of a StateYearTable 5.1
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The Remake of a Statethe nation but
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The Remake of a StateFrance L. 2006
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The Remake of a StateSNV Nepal. 200
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Chapter6Forestland reform:Transferr
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The Remake of a Statestatus of Nepa
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The Remake of a Statethe essential
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The Remake of a Statedevoted to sho
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The Remake of a Stateto be an inter
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The Remake of a Statenatural resour
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The Remake of a StateWhen there is
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The Remake of a StateBromley DW. 19
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The Remake of a StateNagendra H, Pa
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Chapter7Reconstruction anddevelopme
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The Remake of a StatePost-conflict
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The Remake of a State6. Focus on pr
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The Remake of a State3.1 Phases of
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The Remake of a State3.5 Reconstruc
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The Remake of a Stateensure reachin
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The Remake of a StateFigure 7.2 Con
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The Remake of a StatePolitical stab
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The Remake of a Statemanual, crisis
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The Remake of a Statepeace and deve
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The Remake of a StateUpreti BR. 200
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Chapter8Addressing land-baseddiscri
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The Remake of a StateA person’s a
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The Remake of a Stateand unintended
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3. Land-based discrimination and vi
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The Remake of a Statefixed period.
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The Remake of a Statetended to rein
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The Remake of a Stateof feudal and
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8. ConclusionThe Remake of a StateL
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Chapter9The forgotten forces:The ro
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The Remake of a StateSuch labour mi
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The Remake of a Statefeelings of th
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The Remake of a StateData from DoFE
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The Remake of a StateThe socio-econ
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The Remake of a Statecan Nepal gene
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The Remake of a Statemodalities of
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The Remake of a Statein an individu
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The Remake of a Statewho go to Indi
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The Remake of a StateStudies have s
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The Remake of a Statetrade and prov
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The Remake of a StateThe next vital
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The Remake of a StateSofranko AJ, I
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Chapter10Militarisation of the yout
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The Remake of a StateThe concept of
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The Remake of a StateIf we take acc
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The Remake of a Stateoffenders beli
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The Remake of a Statenot have been
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The Remake of a Statezero tolerance
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The Remake of a StateHence, during
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The Remake of a Stateto convince th
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The Remake of a StatePathak, B. 200
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Chapter11The post-conflict Trojan h
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The Remake of a Statestone to defin
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The Remake of a Stateactivity patte
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The Remake of a Stateof intelligenc
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The Remake of a StateBox 11.1 CRV s
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The Remake of a Statecontrary to co
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The Remake of a Statecountry in thi
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7.1 Small armsThe Remake of a State
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7.5 Myths and misconceptionsThe Rem
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The Remake of a Statethe government
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The Remake of a StateIncreasing pol
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The Remake of a Statepart of the we
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The Remake of a Statepower, apoliti
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The Remake of a StateKantipur. 2008
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The Remake of a StateWilson JQ, Kel
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Chapter12Proliferation of small arm
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The Remake of a StateMinister 4 hig
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The Remake of a Statearmaments cost
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The Remake of a StateFigure 12.1 Va
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The Remake of a Statesevere problem
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The Remake of a Statecollective fra
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The Remake of a Stateto the public.
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The Remake of a State3.6.4 Border m
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The Remake of a StateIANSA [Interna
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Chapter13Reconciliation andreintegr
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The Remake of a Statestrengthening
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The Remake of a Statethe relationsh
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The Remake of a StateThe compositio
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The Remake of a Statefrequently. Of
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The Remake of a StateThe participan
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The Remake of a Stateenvironment, p
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The Remake of a StateHence, engagin
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The Remake of a Stategiving respons
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The Remake of a Statea) Verificatio
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The Remake of a State• Criminal p
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The Remake of a Staterehabilitation
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The Remake of a StateBarron M. 1996
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The Remake of a StateTutu D. 1999.
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Chapter14Contradiction and duality:
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The Remake of a Statedomestic polit
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The Remake of a Statequite a bit of
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The Remake of a StateIdeological co
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The Remake of a Statechange. Democr
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The Remake of a Stateagainst the ru
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The Remake of a Statehas to update
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The Remake of a StateContradictions
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The Remake of a Statethe usual rule
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Chapter15The long and winding road
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The Remake of a Stateof ethnic and
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The Remake of a Stateactors current
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About the editorsBishnu Raj Upreti
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