Nepal's development hampered by instability, poor infrastructure: Report
Nepal's efforts to accelerate economic growth and reduce poverty are being
hampered by political instability, poor infrastructure, and other critical
obstacles, a new study has found.
The study, 'Nepal: Critical Development Constraints', is a collaborative
effort by Asian Development Bank (ADB), UK Department for International
Development (DFID) and International Labour Organization (ILO), that
examines the main factors holding back the country's development progress.
It notes that the unstable political environment, infrastructure
shortcomings, labor market rigidities, industrial relations problems, and
inequitable access to opportunities have undermined growth and poverty
reduction.
The report suggests stronger governance, accelerated infrastructure
development, particularly in the power, road and irrigation sectors, labor
market reforms and greater efforts to ensure all sectors of society have
access to productive assets, education and other key social services, can
help address these obstacles. At the same time it cautions the international
community not to burden the government with excessive demands given its
limited resources and the political transition the country is going through.
It notes that priorities for reform must be determined by the government and
the Nepalese people themselves.
"Nepal needs accelerated inclusive growth to create jobs and maintain
stability in the long term but its difficulties are mainly to do with
internal, structural issues and it can address these issues if the desire
and political will is there," said Ehsan Khan, ADB senior economist and
the report's main author.
While Nepal has made solid progress in cutting poverty over the past
decade, its growth performance has sharply lagged its South Asian
neighbors, with development constrained by an internal conflict that
began in 1996.
"We hope the report will be the start of a process of raising the debate
on what's needed to accelerate inclusive growth in Nepal," said Sarah
Sanyahumbi, DFID Nepal Head of Office. "Improving and promoting inclusive
growth and creating more jobs, is a key focus of our programme in Nepal
for the next few years and vital for peace and development in Nepal."
The study highlights the need for an improvement in the country's
industrial environment, pointing out that labor strikes, transport
strikes,
unauthorised levies on businesses and other constraints have led to
frequent disruptions in production and exports, under-utilization of
capacity, higher costs, a loss of competitiveness and the closure of
factories. nepalnews.com June 11 09
