Political Instability Undermining Investment Climate, Say Business Leaders

Stakeholders have expressed concerns that persistent political instability has negatively affected private sector investment and the overall economy, and stressed on holding the House of Representatives election on time to ensure political stability in the country.

Speaking at a programme organized in the capital on Wednesday, participants said economic growth would not be possible without the protection and promotion of the private sector. They also called for legal action against those involved in attacks on private property during the recent Gen-Z movement, arguing that the failure to punish perpetrators has weakened business confidence.

At the event organized by the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), leaders from various political parties, representatives of the private sector and Gen-Z leaders said prolonged instability has discouraged investment and could push the country deeper into crisis. They said there was no alternative to holding elections and stressed the need to guarantee the security of the private sector.

FNCCI President Chandra Prasad Dhakal said the private sector was still not in a position to invest with confidence, citing the lack of a conducive investment environment. He urged the government to take concrete steps to create a favourable climate, adding that the role of the private sector as a driver of prosperity continued to be overlooked.

Dhakal said the private sector has yet to receive a guarantee that it can operate without obstruction, warning that impunity could worsen if those responsible for wrongdoing are not held accountable. “Investment will not come unless there are business-friendly policies, respect for the private sector, assurance of unhindered business operations and a sense of security over property,” he said. “Without investment, there will be no jobs, and without jobs, income levels will not improve.”

He added that improvements in human development would remain limited without higher income levels, and that increased revenue—necessary to make education and health services more accessible—would only be possible if the private sector is allowed and encouraged to operate.

Responding to the concerns, Prime Minister Sushila Karki said the government was ready to assure that structures rebuilt by the private sector would not be destroyed again.

“The government is prepared to provide security to entrepreneurs and remove obstacles to investment,” she said, adding that authorities were ready to bring those involved in vandalism and arson within the legal framework. She also said businesses must commit to conducting their operations in a responsible manner.

Finance Minister Rameshore Prasad Khanal said damage to private property amounts to damage to the nation itself, stressing the need to protect private investment. “The private sector is the engine of the economy. Loss of private sector property is a national loss, and this message must reach everyone,” he said.