Nepal, July 11 -- There is a term in behavioural economics for what the investor market in Nepal is experiencing right now. It is called investor paralysis-the condition in which uncertainty becomes so pervasive that even rational actors with access to capital choose inaction over commitment. It is not cowardice. It is arithmetic. When the expected cost of being wrong exceeds the expected return of being right, sensible people wait.

Nepal's private sector is full of sensible people who are waiting. The numbers tell the story plainly. Banks and financial institutions are sitting on roughly Rs1.2 trillion in investable capital, while the credit interest rate has plummeted to a record low of 6.9 percent. Yet investment has still not increas...