KATHMANDU, OCTOBER 6

Former president of the Asian Development Bank (ADB), Haruhiko Kuroda, has said Nepal could make the economy stronger through mobilisation of its human capital and maximum utilization of natural resources.

The former governor of the Bank of Japan said so at a press conference organised here today. He stressed on identifying the areas for economic prosperity. He said Nepal's youth workforce should be linked to production made through utilisation of natural resources.

'Nepal can benefit environmentally through human capital mobilisation, natural sources like water and forests and other resources. Nepal should not lag behind in maximally utilising these resources,' he said, adding that Nepal's youth human resources should be linked to various sectors of production and benefit from the same.

Kuroda stressed on construction of infrastructures like roads, transmission lines, communications and others for expanding the economy.

Responding to a question from RSS as to what kind of strategic plan should Nepal make in graduating from a least-developed country status, the ADB former president Kuroda suggested Nepal to give emphasis to construction of infrastructure, to increasing citizens' access to education and health and work in areas including investment promotion through private sector. Nepal has set the target of graduating from LDC status by 2026.

He also cautioned against miscalculating Nepal's escalating public debt. The growing public debt due to the constricted economic growth rate, low returns from investment and the weak capital formation could be challenging for Nepal.

Kuroda maintained that increasing the ratio of public debt in comparison to GDP and a large chunk of the annual budget being spent in paying the principal and interest of the public debt will impact the economy in the long-run.

Japan is a country with very high public debt compared to GDP. However, according to Kuroda, the public debt is not a problem in Japan due to the capital formation and returns from investment, and the credible environment to the investors.

Professor at the National Graduate Institute for Policy Studies (GRIPS), Kuroda also raised the topic of responsibility of the regulator in the financial sector. In his view, the liquidity problem and low demand of loans is witnessed due to the tight monetary policy adopted by Nepal Rastra Bank.

ADB's former vice-president Bindunath Lohani shared that the green economy is a potential sector of Nepal. He added that Nepal could take initiatives for the development of the green economy through the various development partners and donor agencies.

Lohani emphasised on the need of keeping the information technology sector in priority, as there is potential in this sector and Nepal can make good progress in it.

A version of this article appears in the print on October 7, 2023, of The Himalayan Times