Nepal hamstrung by a lack of 3Ds: Report

Kathmandu, March 16:

Nepal lacks 3Ds — density, distance and division — according to a World Development Report: Reshaping Economic Geography’ — made public here today.

“Density, distance and division are key to growth,” the report said arguing that the most effective policies for promoting long-term growth are those that facilitate geographic concentration and economic integration, both within and across countries.

“The world’s most geographically disadvantaged people know all too well that growth does not come to every place at once,” said Indermeet S Gill, director of the World Development

Report (WDR) and chief economist, Europe and Central Asia. “Markets favour some places over others. Fighting this concentration tantamount to fighting prosperity,” he said.

The new World Development Report also challenges the conventional assumption that economic activities must be spread geographically to benefit the world’s most poor and vulnerable. Trying to spread out economic activity can hinder growth, it said.

“Throughout history, mobility has helped people escape the tyranny of poor geography or poor governance,” said Gill. “The report sees this as part of a vital process of economic integration, since mobile people and products form the cornerstone of inclusive, sustainable globalisation.”

Integration should be the pivotal concept in the policy discussions involving the location of production, people and poverty in particular, debates on urbanization, regional development, and globalisation. Instead, all three overemphasize place-based interventions.

“The ideas that the report brings to the table are highly relevant to the transitions that Nepal is currently undergoing,” said Susan Goldmark, World Bank Country Director for Nepal. “Economic planners and policy makers here are discussing the same issues in the preparation of the government’s National Development Strategy. the ideas presented in report should be come as useful for making a a prosperous New Nepal.”

The report reframes the policy debates to include all the instruments of integration — common institutions, connective infrastructure, and targeted interventions. By common institutions, the report means regulations affecting land, labour and commerce and social services such as education and health financed through taxes and transfers.

“Infrastructure refers to roads, railways, ports, airports, and communications systems. Interventions include slum clearance programmes, special tax incentives to firms, and preferential trade access for poor countries,” said Rameshwor Prasad Khanal, secretary at the finance ministry.

The report launching was co-hosted by the World Bank Nepal Office and Management Association of Nepal (MAN). MAN president Janak Raj Shah said Nepal was still in the discussion phase of how to shape the economy.

National Planning Commission vice-chairman Dr Guna Nidhi Sharma chaired the event while former chief secretary Dr Bimal Prasad Koirala acted as moderator.