Ten questions on APECF’s plans

Ten questions on APECF’s plans

There has been great excitement, debate and controversy about the plans of the Asia Pacific Exchange and Cooperation Foundation (APECF) to mobilize investment of US$3 billion plus for the development of Lumbini as a Special Development Zone (SDZ).

After four decades of failed attempts to develop Lumbini into a global pilgrimage site worthy of one of the world’s oldest and greatest religions with nearly a billion followers, any serious and ambitious plan for its development should be warmly welcomed. So far, Nepal has never had any development project worth US$3 billion in foreign direct investment. So naturally the proposed project by APECF arouses a mixture of awe, enthusiasm, curiosity and questions.

The mystery surrounding APECF, its history, origins, the secretive manner in which it seems to operate, its highly unorthodox approach – e.g. sudden unannounced Board meetings, sudden unplanned “guerilla ambush” type of visits to project sites, the lack of any published records of its constitution, criteria for selection of board members, no information on its bank accounts, financial procedures, etc. raise serious questions about the credibility of the organization.

One gets the impression that this is the initiative of some well-connected entrepreneurs who want to bamboozle a poor, chaotic country in transition, with promises of huge investment invoking the names of some big business tycoons and political personalities of various countries. The intention seems to be to dazzle the investment-hungry Nepalis by dangling big names and huge sums of money to secure a profitable investment opportunity bypassing normal due diligence review of projects of such magnitude and importance.

Before this project goes any further, its sponsors need to answer the following 10 questions:

What is the real purpose of APECF? Besides development of Lumbini, what other projects has it implemented so far? Where can we find the records of its past activities and achievements?

Is APECF a private foundation? A charity? An investment company? What does it offer to potential investors? Are the members of the Foundation included as investors, lobbyists, or as voluntary, philanthropic individuals?

What exactly are its links with the Government of China? Perhaps the high-level Chinese delegation arriving in Nepal today can explain this, and clarify how mindful it is of the geo-political sensitivities concerning a project of this nature and magnitude being negotiated with a transitional government in the current unstable circumstances of Nepal.

A MOU signed between APECF and UNIDO in Beijing on June 15, 2011 says that the mission of APECF is to “provide full range of support for the project entitled ‘promotion of South East Asian IPA Network’. What is this project, and the IPA network? How does Lumbini fit into this network? How does Nepal, a country in South Asia, fit into a ‘South East Asian’ network?
Is there a constitution of the Foundation? Does it specify how its Board members are selected? How were Prince Paras and Pushpa Kamal Dahal (identified as Mr Prachandpath in the plaque provided to the chairman of the UCPN (Maoist) by the organization) selected to be co-chairpersons of the Foundation? Who proposed their names?

A Mr Xiao Wunan is apparently the executive vice-chairman. So who is the chairman? Why is the chairman’s name kept a secret? Who are the other office-holders? How many full-time staff does APECF employ? Are there minutes of the APECF meetings, including the ones said to have been attended by the Nepali co-chairmen? Are these minutes available for the public to review?

Where does APECF keep its bank account(s)? What are its sources of income and the breakdown of its expenditures? Who audits its financial reports? Is an audited report of its financial accounts available?

Did Pushpa Kamal Dahal consult his party or the Government of Nepal before joining the Foundation as its co-chairperson? As a former prime minister, influential political leader, and potential future Head of State or Government of Nepal, will Mr Dahal refrain from participating or voting or influencing any decision-making on the possible Lumbini project to avoid any conflict of interest?

Are the co-chairpersons of the Foundation paid honoraria? Do they get any shares or dividends in this Foundation’s investment or profits? Does APECF pay for the travel and other costs of persons accompanying co-chairpersons Paras and Prachanda when they attend its Board meetings?

Is it within the jurisdiction of the UNIDO office in China to sign a project agreement with a private foundation based in Hong Kong for the development of a project in a third sovereign Member State of the United Nations, without official consultation with or concurrence of the government of such country, and without any coordination with the UN country team in that country?

Unless these very basic questions are answered satisfactorily, the Government of Nepal would be ill-advised to proceed any further with this project. The government should treat APECF as any other private investor or consortium of investors looking for an investment opportunity in Nepal. Government ministers and officials are expected to keep a certain distance from private investors seeking government contracts and business opportunities, so as not to compromise their objectivity vis-a-vis other competing potential investors, and to avoid any conflict of interest in their official duties.

APECF is not a multilateral or bilateral donor agency, nor an inter-governmental organization like the World Bank, Asian Development Bank, or a UN agency. So it is highly inappropriate for any senior government official or autonomous government body like the Lumbini Development Trust to roll-out the red carpet to receive a business delegation that parachutes into Kathmandu or Lumbini without prior notice, invitation or mutually agreed plan.

Nepal risks turning into a “Banana Republic” if any visitor dangling the promise of a big bundle of cash is welcomed as a state guest, and organizations with dubious credentials, no prior track record of any achievement, and with secretive working methods, are treated as serious investors without any due diligence vetting.

We must warmly welcome potential partners and investors who come with good intentions and serious plans for the development of Lumbini, keeping in mind its historical, religious and cultural importance of the national as well as global pilgrimage site. We must protect the sanctity of the World Heritage Site even as we seek to develop Lumbini and its surrounding region for the sake of the people of Nepal. Lumbini’s development must respect the letter and intent of the carefully prepared master-plan of architect Kenzo Tange. It must involve credible and concerned international organizations like UNESCO and the United Nations itself.

The views and advice of Buddhist scholars and archeologists should be sought in developing Lumbini so that we do not inadvertently turn a sacred spiritual site into a money-making Disneyland or Las Vegas. Lumbini is too sacred to be turned into an experimental ground for unscrupulous venture capitalists, but true investors and partners conducting their operations with professionalism, dignity and transparency should be welcomed with open arms, and the customary hospitality of the Nepali society.

Published on Republica Daily, 2011-08-16