Foreign Investment in Media

Foreign direct investment (FDI) is a much talked-about issue. Many countries are under heavy pressure to open up the media industry to FDI. That is why India lifted the ban on FDI in the media sector up to 26 per cent Ownership, which was totally been forbidden since its independence. China also surprisingly, has permitted partial FDI in the media sector since January 2005.

A number of media persons have underlined the need to check foreign investment in the Nepali media for the fair and competent journalistic practice. They fear FDI in media will be instrumental in creating anarchy in the country. But, it is not possible to hold complete control on foreign direct investment. Therefore formulation of appropriate rules and regulation is needed on foreign direct investment in electronic and print media to ensure medium's management and control be remained in the hands of Nepali people. Nepal government's spokes person and Minister for Information and communication Krishna Bahadur Mahara during an interaction with journalists has recently accepted the fact. Minister Mahara says there should be a ceiling on foreign investment in the media as total restriction is not possible.

The global market has magically integrated through the liberalization and deregulation of both product and capital markets including media industry. While the world entered into the Globalization of markets, the barrier to investment in trade, investment and unprecedented international mobility of capital has been eliminated. The advocates of globalization say even the poor countries could promote their economy through sustained economic growth, free markets, economic globalization and privatization. But the basic characteristics of globalization seems only promoting economic and cultural hegemony of economic super powers. In short, globalization can be characterized as one in which the world's money, technology, and markets are controlled and managed by gigantic global corporation; a common consumer culture unifies as all people in a shared quest for material gratification; and the perfect global competition among workers and localities to offer their services to investors at the most advantageous terms. Furthermore corporations are free to act solely on the basis of profitability without regard to national or local consequences; relationships, both individual and corporate, are defined entirely by the market; and there are no loyalties to country, place and community. Keeping these characteristics of globalization in mind many countries obviously are taking conservative attitude and strong regulatory measures to safeguard the national interests and identity regarding FDI in media sector.

In globalization, the world's money, technology and markets are controlled and managed by gigantic global corporations; a common consumer culture unifies all people in a shared quest for material gratification; and the perfect global competition among workers and localities offers their services to investors under the most advantageous terms. Furthermore, corporations are free to act solely on the basis of profitability without; the market defines relationships; and there are no loyalties to country, place and community.

A number of countries are taking strong regulatory measures to safeguard the national interests and identity regarding FDI in the media sector. The media have the power to shape opinion and attitudes. It is also necessary because information is increasingly being counted as a 'strategic resource,' the role of the media that disseminate information is conceived as being a check on public and private power. The media's strength only lies in their independence not only from government and other agencies but also from foreign influence.

Some argue that the entry of organized private sector investment in the media can also help the state-owned media organizations and private media institutions to open up and become more competitive. Competition can lead to unethical practices too if FDI in media is not welcomed within appropriate framework. On the contrary, there are those who underline the need to check FDI in the Nepali media, including the press, on the grounds promoting fair and competent journalistic practices. Some fear, FDI in the media will create anarchy. Financial matters are crucial for the survival of any newspaper. But one should also take into account that it may not possible to continue to impose complete restrictions on FDI in the media in this age of globalization for long.

Nepali service sectors are bound by various domestic regulations such as Foreign Exchange (regulation act 1962), Foreign Investment & Technology Transfer Act (FITTA), Company act 1997, and others. FITTA 1992 prohibits foreigners even from producing films in Nepal languages. However, being a member of WTO, the pressure may build up to open up to foreign investment in the media, including print and broadcast. The pressure and influence of satellites broadcasting from foreign lands and the flow of newspapers and other periodicals are beyond control. Indeed, this is today's reality and this trend is bound to become even stronger in days to come. This weakens the case of those who oppose FDI in the media.

Certainly, we have to develop competitive strength within the national media industry. But it is time we become more open to FDI in the media, with fair rules and regulations governing FDI in both electronic and print media. These rules are necessary to ensure that full editorial control as well as much of effective management functions remains in Nepali hands. Similarly, TV companies looking for up-linking facilities should be brought under regulation and monitored. Permission for use of facilities for live news/footage collection and transmission should be available to only those channels that are up-linked from Nepal.

A controlling mechanism could be develop through limitations on equity participation, editorial as well as management control and reasonable proportion in covering national and international news and current affairs issues. Appropriate modalities should be developed to safeguard national interests, diversity of opinion, freedom of expression, and sovereignty. Regulation should aim at permitting investors from all countries provided they fulfill the legal and other requirements. Such an open policy, along with reasonable restrictions, could help the Nepali media industry become better and more competitive.