BUSINESS LEADERS TO STAFFDEL: NEPAL IS OPEN FOR

UNCLAS KATHMANDU 002897

SIPDIS

SENSITIVE
SIPDIS

DEPT FOR SA/INS, EB

E.O. 12958: N/A
TAGS: BEXP BTIO EINV ECON ENRG NP
SUBJECT: BUSINESS LEADERS TO STAFFDEL: NEPAL IS OPEN FOR
BUSINESS


BUSINESS LEADERS UPBEAT ABOUT BUSINESS IN NEPAL
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1. (SBU) At a December 21 breakfast meeting with
congressional Staffdel, six Nepali business leaders said that
Nepal was "open for business." The business leaders
explained to the Staffdel how the Maoist insurgency and the
current instability of His Majesty's Government of Nepal
(HMGN) were hindrances to Nepal being more attractive to
foreign investment. The business leaders expressed the
desire for peace and stability in Nepal, which was better for
business, and most of the group said they felt the King was
most capable of creating a more stable Nepal. The business
leaders noted that they were upbeat about the potential for
future foreign investment in Nepal. Sandip Shah, the Manager
of the Bhote Koshi hydropower project for the Panda Group,
currently the largest U.S. investment in Nepal, was less
positive. The Panda Group is planning to sell its investment
in the project to a Nepali company due to difficulties Panda
Group has experienced conducting business here.

BUSINESS GROUP ALSO POSITIVE ON TOURISM DESPITE INSURGENCY
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2. (SBU) The business leaders stated that tourism has been
doing well in Nepal over the last few years, that the upward
trend in tourism in the late nineteen-nineties had leveled
off, and that the last several months during the Maoist
cease-fire have seen increased tourist arrivals. One
business leader opined that the U.S. travel warning had
scared off many tourists. The business leaders declared that
the Maoists were terrorists, but said they did not target
Western tourists and were only active in collecting trekking
fees (or "donations" to the Maoist cause) from tourists in
certain areas. Emboff noted that paying Maoists extortion
was against U.S. law. The business leaders were upbeat that
tourism would continue to rise.

COMMENT
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3. (SBU) After the meeting, Staffdel noted the business
leaders seemed to be putting a very positive spin on foreign
investment and tourism, when the reality was not as good.
Post does not believe that tourism and foreign investment
will see major gains until more durable solutions to the
political instability and Maoist insurgency are achieved.


4. (SBU) Staffdel List:

-- J. Matthew Szymanski, Chief of Staff, House Small Business
Committee
-- Christopher Szymanski, Staff Assistant, House Small
Business Committee
-- Dawn Petchell, Senior Policy Adviser, Bureau of
Legislative Affairs (H Bureau)
-- James Garrison, Lieutenant Colonel, U.S. Army House Liaison


5. (SBU) Nepali Business Leaders List:

-- Sunil Shakya, President, Nepal-USA Chamber of Commerce and
Industry
-- Prasiddha Bahadur Pandey, Managing Director, Shangri La
Hotel and Resort
-- Narendra Basnyat, Chairman, Himalayan Distillery Limited
-- Moti Lal Dugar, Vice Chairman, TM Dugar Group
-- Sandip Shah, General Manager, Bhote Koshi Power Company,
Panda Group
-- Ravi Bhakta Shrestha, Vice-Chairman, N.E. Group


6. (SBU) Staffdel Szymanski cleared this message.
MILLARD