Monday, March 28, 2016

Double GDP, investment key to Nepal's graduation

Nepal has to grow at the rate of 7 to 8 per cent – double from the current growth rate – annually not only to graduate to the league of developing countries by 2022 but also to graduate to medium income country by 2030 from the current low-income country status, according to economists.
Speaking at a day-long seminar on 'Envisioning Nepal 2030' organised by National Planning Commission (NPC) and Asian Development Bank (ADB) in Kathmandu today, they also stressed the need to focus on key competitive and comparative advantage sectors for structural transformation and acceleration of economic growth for the graduation.
Addressing the seminar, prime minister Khadga Prasad Sharma Oli said that Nepal needed a long-term strategic development plans and policies to graduate to the status of a developing country from the current least developed country (LDC) status.
Stressing on implementation of those mechanisms to achieve Sustainable Development Goals (SDGs) by 2030, he said that the country has to double annual investment, and build essential infrastructures like strategic road and railway networks, communication, and electricity. "We have shifted our attention and efforts and are gearing toward economic development and prosperity after promulgation of the new constitution," he said, adding that Nepal's unique geographical locations, abundant natural resources, biodiversity and landscapes that widen connectivity across the borders toward a self-reliant economy has been able to reduce poverty, achieve most of the Millennium Development Goals (MDGs) and make significant social development particularly in health and education.
After the promulgation of Constitution, the main task before Nepal is to empower the people through implementation of economic and social agenda enshrined in the Constitution, he said, adding that it would only be possible through structural transformation of existing economic and social institutions, production relations, and social values. "However, focus must be on addressing the crippling energy crises that hold key to unleash rapid growth of many industries, as well as on connectivity to reach all Nepali villages within the country, and the vast markets of the neighbouring countries."
The seminar provided a platform for all stakeholders to contribute and work for climate change, sustainable development activities and renewable energy resources.
Speaking at the seminar, ADB vice president Wencai Zhang hailed Nepal's intent to graduate from LDC status by 2022, and become a middle-income country by 2030, while achieving the sustainable development goals. "However, this calls for a credible vision and a strategy to achieve it by setting out policies, prioritising public expenditure and investments to build physical and human capital, improving governance and the business environment, building a competitive industrial base and enhancing regional cooperation and integration," he said.
Welcoming the guests in the seminar, vice chairman of the National Planning Commission (NPC) Dr Yuba Raj Khatiwada said that Nepal needs higher economic growth to reduce poverty by 2030. "We have to learn how to accelerate the growth from our neighbours," he said, adding that the government will formulate Development Strategy 2030 by incorporating inputs from the seminar.
"Nepal must step-up and sustain a growth in the range of 6 to 8 per cent per year to make meaningful headway in uplifting the living standard of people,” he said, adding, "To achieve this growth rate, we must ramp up capital expenditure and make sure public investment equivalent to 8.5 per cent of the gross domestic product is made every year to bridge the infrastructure deficit."
At the programme, participants and panelists suggested the government to chalk out a national development strategy on the basis of Nepal's competitive and comparative advantages. They also said that Nepal has been trapped in poverty also due to lack of diversification from subsistence agriculture to commercialisation. "The government should provide first movers incentive to encourage entrepreneurs to venture in new areas that can provide impetus to economic growth and create employment," they suggested.
On the occasion, finance minister Bishnu Poudel accepted that the government has a challenge to develop sufficient infrastructures that could propel economic growth.
The seminar is expected to chalk out a blueprint that will basically chart out strategies and action plans to raise Nepal’s per capita income by more than three folds to $2,500 by the next one-and-a-half decades, eradicate poverty and rapidly improve other major socio-economic indicators by ensuring social justice.
The National Planning Commission (NPC) will incorporate recommendations and feedback collected from the conference – where renowned domestic and international economists, policymakers and development experts including Bibek Debroy, Justin Yifu Lin, Joon-Kyung Kim, Ajay Chibber, Nagesh Kumar, Bindu Nath Lohani, Shankar Sharma and Swarnim
Wagle took active part – in preparing the final Vision 2030 document.

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