The two-day Investment Summit, organized by the KP Sharma Oli administration to showcase key projects in Nepal and to sensitize investment opportunities in Nepal, concluded on Saturday with the signing of 15 deals and MOUs between Nepali and foreign companies.

The government highlighted what it considers key achievements to create a conducive investment climate: political stability, approval of legislation (PPP and Investment Act 2019, amendments to SEZ, forest and labor bills, hedging regulations, FITTA amendment, contribution based social security scheme, etc). Particularly,  the focus was on 'one-window service' for investment approvals either through IBN (Rs 6 billion and above, and 200 MW and above hydroelectricity projects) and DoI (rest of the investments). To improve budget execution, the government is planning to bring a separate law that allows the prime minister to directly oversee the implementation of national priority projects.

Following the Saturday’s deal, all eyes will be on whether—and how much of—the projects agreed upon over the weekend will actually materialize.

Here are eight things you should know.

Talk’s done, action next? It was a signature event of the government that is doing everything it can to present a case for high FDI in Nepal. Nepal organized similar events in 1992 and 2017. As is usually the case, everyone sounded optimistic and praised the government for actual as well as intended reform measures. The output will be seen when they transition from talk to action.

The real deal is on follow-ups and implementation. Having a law is one thing, but effective implementation with all the policy, regulatory and institutional frameworks in place is another. Both are important. Nepal has been really bad in the latter. Updating or amending a law is a regular task to ensure that the investment opportunities and provisions are safer and competitive than in other countries. This is a means to an end, not an end in itself. The IBN has allowed investors to apply for any of the showcased projects by April 21. Then the government will choose the most suitable investors and proceed with realizing the investment. This is where the most important task lies. Investors will compare the government's promises against the system in place for them to realize the promises. This means a true 'one-window service', hassle-free approvals, policy consistencies, etc. Let’s recall that the result from the Investment Summit in 2017 is almost nil.

The private sector representatives were all optimistic about opportunities in Nepal and the ease of doing business. But, they are also the ones who have been complaining about difficult times and batting for cartel associations to control resources or to seize sectoral opportunities. Furthermore, rent-seeking among government agencies is not a new thing.

The government will have to sort out inconsistencies in laws or clarify that there are no inconsistencies. This matters because approval and implementation hassles crop up when there are ambiguities in laws. And, there are plenty of ambiguities related to layers of approval requirement, bureaucratic discretion, income repatriation, visa restriction, negative list, etc. Also, the private sector is hesitant to join the contribution-based social security scheme due to the confusion over conflicting clauses in the amended labour bill.

The apparent discord between the IBN and Minister of Industry, Commerce and Supplies was visible during the event, too. The industry minister is not happy with the way the ministry was sidelined during the summit. It also has differences with the PM regarding the IEA amendment. This is what breeds failure of inter-ministry coordination.

How sustainable will the efforts be given that most of the IBN staff are temporary consultants hired through an external firm? There needs to be an exit strategy for active donor support for recurrent spending. The government should build internal institutional mechanism with a reliable revenue stream to retain and sustain experts based on the need. IBN is so reliant on donors that over 90% of its budget and staff requirement (without any O&M survey as is customary in government agencies) are fulfilled through non-government sources. What is the financial and institutional sustainability plan of IBN? It is especially important now because of its increased workload (investments over Rs6 billion and PPP work) and concerns about accountability.

The biggest challenge is in transforming the bureaucracy's mindset, from problem-pickers to problem-solvers or facilitators. Investors repeatedly complain about the hassles they face when they have to deal with bureaucracy, which is quick to identify problems rather than to solve outstanding issues to facilitate investments.

Doing business rank may bump up this year since the government amended major investment laws to ease approval processes. Of course, this presupposes other countries haven't made equally or better amendments to facilitate investment. Implementation aspects are not well reflected in DB rankings.

Sapkota is an economist based in Tokyo. This post was adapted from Sapkota's blog.