KATHMANDU, March 14: The World Bank has made public its Nepal Systematic Country Diagnostic (SCD) report, recommending six areas where action is required to give an impetus to growth, to accelerate poverty reduction, to address sources of fragility, and to reduce vulnerability.
The SCD report argues that there is an urgent need to change Nepal’s development model despite the successful and rapid reduction in poverty over the last two decades.
“At this historic moment in Nepal, there is a need for a new approach to achieve faster progress,” said Ruth Hill, a co-author of the report made public amid a ceremony organized jointly by the World Bank and Society of Economic Journalists-Nepal (SEJON) in Kathmandu on Tuesday.
The report also calls for the departure from ‘business-as-usual’ approach that will not address inequalities, reduce poverty rapidly and create enough employment opportunities in the country to achieve faster economic growth.
Among others, the report pointed out 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 accompanied by a meaningful change in the balance of power,” said Hill, adding that real progress in this area of action is not only important but also very possible.
Other 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 for many and have spill-over effects into other sectors.
The World Bank report has 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. “Improving inclusion in acquisition and use of human capital is not only important for taking advantage of opportunities for growth and poverty reduction, it is fundamental to addressing source of fragility,” read the report.
As the progress in the country has often been set back by natural disasters, the report said that there is a need to increase resilience to natural disasters and health shocks. “Resilience is built both by reducing exposure to risk and strengthening coping mechanisms for when shocks do occur,” the report stated.
From migration, Nepal can get more than remittances, according to the SCD report. One of the ways is to tap into the capital and skills that returnees bring, said the report. “Getting more from migration entails addressing constraints remittance recipients and migrant returnees face in pursuing entrepreneurial investments,” the report added.
Speaking at the program, Shankar Prasad Adhikari, secretary at the Ministry of Finance, said that the SCD report could become a good reference for the government in aligning its development plan and programs in the days to come.