New approach necessary to accelerate country’s economic growth

Kathmandu, March 13

Experts and stakeholders have said that a new and different approach is needed for the country to accelerate its economic growth, rapidly reduce poverty and boost shared prosperity.

Speaking at a panel discussion titled ‘A New Approach for a Federal Nepal’ organised jointly by the World Bank Country Office and Society of Economic Journalists-Nepal (SEJON) here today, they said that there is an urgent need to change Nepal’s development model to make sure that opportunities for faster growth and poverty reduction are not missed.

“At this historic moment in Nepal, there is a need for a new approach to achieve faster progress,” said Ruth Hill, co-author of ‘Nepal Systematic Country Diagnostic’ report by World Bank (WB), which was unveiled during the programme. The SCD report also calls for departure from the ‘business-as-usual’ approach that will not address the inequalities, reduce poverty rapidly and create enough employment opportunities in the country to achieve faster economic growth.

“Private-public partnership is going to be critically important as the government cannot alone make the huge investment needed in the country. The government should join hands with the private sector for development,” said Suraj Vaidya, president of SAARC Chamber of Commerce and Industry.

Jiwan Bahadur Shahi, a member of provincial assembly of Karnali Province, said that the inequality between the provinces should be addressed. “The first step for addressing the inequality between the provinces is to distribute the resources from the central government in an equitable manner,” he added.

Kewal Prasad Bhandari, joint secretary at the Ministry of Finance, said that focus should be placed on agricultural development, as the country may not be able to immediately compete in the manufacturing sector with China and India.

Min Bahadur Shrestha, former vice president at the National Planning Commission, said that the government should facilitate in attracting private sector investment, both domestic and foreign, to create mass-scale employment opportunities.

Among others, the SCD report pointed out the six areas where action is required to take advantage of opportunities for growth and poverty reduction, to address sources of fragility, and to reduce vulnerability.

The SCD report has said that there is a need of encouragement, of political inclusion and eliminating ‘clientelism’.

“The current transition to federalism is a potential game changer if it is accompanied by a meaningful change in the balance of power,” said Hill, adding that real progress in this area is not only important but also very possible. Another area of action recommended in the report is private sector investment. According to the report, addressing constraints to private investment is essential for individuals to become more productive employees and entrepreneurs.

The report has also recommended the need to harness the potential of natural resources. Stating that the constraints to

private investment are apparent in natural resource development, it said that unlocking such constraints means getting more from natural resources, which will improve employment opportunities and have spill-over effects in other sectors.

The World Bank report also called for addressing the barriers to health and education posed by remoteness, low income, and norms to ensure that all Nepalis are equally able to invest in and use human capital.