A Vision for Nepal : Policy Notes for the Government, Volume 2. Sector Notes
Nepal needs a new economic model to achieve faster and sustained growth as well as further improvements in human development and poverty outcomes. Economic growth, while ro¬bust at around 4 percent annual average since 2005, is far from the level n...
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2014/01/20155445/vision-nepal-policy-notes-government-three-growth-investment-infrastructure-inclusion-vol-2-2 http://hdl.handle.net/10986/20099 |
| Summary: | Nepal needs a new economic model to
achieve faster and sustained growth as well as further
improvements in human development and poverty outcomes.
Economic growth, while ro¬bust at around 4 percent annual
average since 2005, is far from the level needed to achieve
the government s ambitious targets. The economy, highly
dependent on remittances, lacks the nec¬essary dynamism.
While substantial gains have been made to reduce poverty and
expand access to services, achieving further progress will
require more determined and targeted state intervention. To
redefine Nepal s growth model, public policy should focus on
3 I s: Investment, In¬frastructure, and Inclusion.
Investment is the bedrock of a sustainable growth model but
in Nepal, the state, firms and households critically
under-invest, with gross fixed capital formation between
19.9 and 22.2 percent of GDP over the past decade (compared
to 30 percent or more in fast-growing countries in East
Asia). In order to unlock investment as well as to expand
access to services and opportunities for all, public
infra¬structure is critical, but Nepal is under-connected
and under-powered. Finally, growth alone will not deliver
continued fast progress on inequality and poverty reduction
unless the growth model is calibrated for inclusion, which
in turn can help sustain dynamic growth. |
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