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VOL. 03, NO. 02, June 16, 2009 (Ashadh 02 2066)
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Hampering Development
A study conducted by Asian Development reveals that political instability hampers Nepal’s development process
By A CORRESSPONDENT
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.
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Finance Secretary Khanal: Launching book
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Conducted by ADB’s senior economist Ehasan Khan, the country reveled that the most immediate and urgent constraint is a cluster of interrelated governance factors that are directly political in nature: political instability, crime and insecurity.
After the start of conflict, Nepal’s position was deteriorated. In 1996, Nepal was ranked above the South Asian Average in 4 of the 6 governance related indicators that the World Bank monitors. However, its rank has since slipped in all indicators except regulatory quality report says.
“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.
Launching the report, Finance Secretary Rameshwor Prasad Khanal said Nepal has made certain progress in economic sectors despite continual political instability. “Nepal needs to carry out the reform process to accelerate the economic growth,” said finance secretary Khanal.
The study, Nepal: Critical Development Constraints, is a collaborative effort by Asian Development Bank (ADB), UK Department for International Development (DFID) and International Labor Organization (ILO), that examines the main factors holding back the country’s development progress.
“The publication of this study is both timely and relevant as both government and development partners’ work to adjust their strategies and programs to respond to the recent developments in Nepal’s transition to peace and nation building, “said Barry J Hitchcock, country director, Asian Development Bank. “We are hopeful that the report will help shift public policies towards inclusive growth and put the concept of inclusive growth into the Spotlight when the government prepares its economic plans for the future.”
“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 program in Nepal for the next few years and vital for peace and development in Nepal."
Despite uncertainties, there is sign of optimism. “I am optimistic that the situation will change and the poor people of Nepal will get benefits,” said Sanyahumbi.
“The priority of the ILO’s Decent Work Country Program for Nepal is to generate productive employment for building sustained peace through labor market reform and this research will no doubt accelerate the process of the ILO’s ongoing reforms which encourage investment, as well as stressing the importance of social protection of workers,” said Shengjie Li, Director of ILO for Nepal.
