Interview with Chief Secretary Mr. Shanker Das Bairagi

Mr. Shanker Das Bairagi is the Chief Secretary of the Government of Nepal. Mr. Bairagi, served as the Secretary at the Ministry of Foreign Affairs before being appointed as the Chief Secretary and was involved in formulating and implementing crucial policies regarding Nepal’s economic diplomacy. Mr. Bairagi played a significant role in strengthening economic diplomacy by enhancing Nepal’s relations with development partners other friendly nations and international agencies while serving in Nepal missions abroad in the past. Mr. Bairagi, who is also an ex-officio member of Investment Board Nepal, had represented Nepal in a number of international forums and played a vital role in enhancing development cooperation as well as promoting investments and trade tourism in Nepal. Talking to IBN Dispatch, Mr. Bairagi opined that Nepal needs to change the investment promotion modality given the changed global and regional circumstances amidst the Covid-19 pandemic.

Given your long experience with bureaucracy and current instrumental position, what should be the country’s strategic focus for achieving GON targets as stated in the GON vision documents?
The Government of Nepal has set its national aspiration, “Prosperous Nepal, Happy Nepali” and targets have been defined to realize this aspiration. First, the current Fifteenth Plan has identified specific indicators to measure progress in different areas and the means thereof. Second, we are graduating from the least developed country status in 2022 with the preparation period of another three years. Third, we are committed to achieving all SDGs and thereby upgrade ourselves to Middle Income Country’s status by 2030.
To materialize the country’s development vision, we need to focus on six major strategies – a. Increase investment in infrastructure to at least 15 percent of the GDP, b. Increase investment in human capital, c. Emphasize research and development as well as evidence-based policy making, d. Enhance public private partnership in investment, management and service delivery, e. Make the country’s economy resilient to crises and external shocks, and f. Strengthen governance. The Government’s functioning is guided by these major strategies.

How do you think GON can effectively utilize economic diplomacy to attract investments in Nepal?
Economic diplomacy is a multi-dimensional exercise. It is proved to be a tool for mobilizing development cooperation; attracting investments; attracting tourists; and enhancing country’s export trade. Given my experience in the Ministry of Foreign Affairs and Nepali diplomatic missions abroad, we have to be very clear about the areas where we can attract foreign investment. Such areas should be as per the country’s priority and in the meantime, should have high traction for the potential investors. We need to do a thorough homework in identifying the sectors, projects and plants. Further, our missions should be able to effectively disseminate information to the investors about the country’s investment policies, the incentives for the investors, procedures, market prospects and other benefits. A regular dialogue among the investors is needed from our missions.
The Missions should also coordinate with Ministries concerned and IBN for this purpose and provide useful feedback on any issues raised by the potential investors. This two-way interface helps us identify any shortcoming on our part and remain competitive. Use of projects banks prepared by National Planning Commission and Investment Board of Nepal can be useful inputs for conversation with the investors. Missions’ role should further be proactive to match the need of Nepal and interest of the investors. In the post-Covid scenario, for instance, the circumstances have changed in terms of economic relations, production and productive capacity and focus of investment around the globe. So, we should have new thinking on how to attract investment under such changed global and regional circumstances.

What legal and financial reforms the GON has undertaken to promote Nepal as an ideal investment destination for investors?
After the restoration of Multi-Party Democracy in 1990, Nepal devised a number of policy reforms to make Nepal an attractive destination for foreign investment. Industrial Enterprises Act, Foreign Investment and Technology Transfer Act, Company Act, Public Private Partnership and Investment Act are some examples of the reform measures. Further, the Financial Act every year provides different packages of incentives and attraction measures for the investors. We have policies for relaxation in income tax, eased income and investment repatriation procedures, one stop service for establishing and operating the industries and so on. It is notable that The Rt. Hon. Prime Minister himself is the chair of Investment Board of Nepal. As a continuation of such initiatives, it is noteworthy that Nepal Rastra Bank has recently relaxed the mandatory provision to get approval for foreign investment once the company/industry is registered in Nepal. Reform is a continuation process, and based on our experiences and changing circumstances, the Government is always open to the idea of further reform required.

As we need huge investment to graduate to a middle-income country status by 2030, how do you think we can enhance our capacity (in bureaucracy) to promote, facilitate and implement big infrastructures?
You have posed a very pertinent question here. Whatever policy we devise or whatever system we adopt, the efficiency and competence to run that system and implement the policies should be enhanced. You are right that the capacity of our bureaucracy has to be enhanced significantly to enable it to implement the large infrastructure projects. I have witnessed that in many cases, financial resource is not a problem, but the absorption capacity is the issue. Therefore, we need to enhance technical and managerial skills of our machinery. For this we may focus on five areas – a. Invest in human resources so that they are technically sound, b. Train the human resources on regular basis, c. Provide enough authorities to the decision makers as well as officials at operational level, d. Reduce the constraints on resources (input), process (legal and other) and output (based on the input and process), and e.Eensure protection of officials who function in good intention while carrying out the projects.

How do you assess the coordination and collaboration activities among government agencies with regard to the development and implementation of projects and facilitation of investors?
Although we have devised so many policies for better coordination among the government agencies, practically there are still several unresolved issues in coordination. We are, therefore, continuously working to establish a better coordination mechanism for the development and implementation of the projects as well as facilitating the investors. We have established the high-level forum for Public Private Dialogue chaired by The Rt. Hon. Prime Minister, initiated regular meetings of Central Monitoring and Evaluation Committee chaired by the Chief Secretary, formed a Project Facilitation Committee chaired by a Secretary at the Office of Prime Minister and Council of Ministers. Besides, National Planning Commission is the apex agency to coordinate the project preparation, implementation, and monitoring. We have remained effortful to resolve the problems in coordination and facilitation by activating these mechanisms. Furthermore, there are specific and sector-wise mechanisms to deal with the issues and challenges in the respective sectors.

How do you think the government can further strengthen its partnership with Development Partners to attract investments in Nepal?
Development Partners have been supportive in Nepal’s socio-economic development. To ensure the continuation of their support, scale it further and generate optimum result, we should be able to prioritize our projects and areas of investment and cooperation. We should be clear in priorities and expected output/outcome that is to be achieved through their cooperation. The forums already established should be activated where the Government and the development partners can engage on regular basis. Development cooperation is one component of our engagement with development partners and private investment is another. Both are interrelated though. The measures we take towards the effective utilization of development assistance would also serve in attracting foreign investment. The Government is committed on both fronts.

How can we further strengthen IBN as a vibrant agency for attracting investments, developing and implementing transformational projects in Nepal?
IBN should be a proactive agency. We created this institution not to duplicate the things that our ministries had been doing. The working modality of this institution should, therefore, be different from the regular bureaucratic one. It has to be able to coordinate well among the institutions, facilitate the investors promptly and efficiently, and provide all kinds of services needed to them. And its activities should translate into visible results.