Kathmandu, Sept 15: During the recent Gen Z protests, demonstrators attacked multinational companies in Nepal, including Hilton and Hyatt Regency hotels and Ncell, setting some offices on fire. Hilton suffered complete damage, while Hyatt Regency and Ncell faced partial losses, raising concerns over foreign investment in the country.
Nepal relies on foreign investment to boost production, employment, and exports, and investors usually seek a positive environment with clear laws and supportive policies. Attacks on both domestic and foreign firms cast doubt on Nepal’s investment climate.
Foreign direct investment (FDI) inflows have fluctuated in recent years. After the 2015 constitution, FDI rose from 1.35 billion NPR in FY 2017/18 to 19.5 billion in FY 2017/18, but declined again, falling to 7.3 billion NPR in the last fiscal year.
Rameshwar Khanal, chairman of the High-Level Economic Reform Commission, warned that destroying infrastructure like Hilton discourages investors. He noted such attacks also occurred during the 1980s and the Maoist conflict. Economist Samir Khatri emphasized that foreign investment currently accounts for only 0.3 percent of Nepal’s GDP, so the immediate impact of the protests on FDI is limited. He suggested focusing on raising this to three percent through improved infrastructure, legal frameworks, and policies.
Former NRB executive director Basudev Adhikari highlighted the country’s weak capacity to attract and utilize foreign investment. He pointed out that unstable government policies and delays in implementation make investors cautious, while the public often misunderstands FDI, seeing it as exploitation rather than opportunity.
Adhikari added that until public perception improves, politics may continue targeting foreign companies, and protests like the Gen Z movement could deter new investment and discourage existing investors. Currently, Nepal hosts foreign investment from 60 countries across 850 companies.
