Mobilization of resources for Economic Transformation of Nepal

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While the entire nation is struggling due to Lockdown and increasing corona positive cases. There, on the other hand, the nation is suffering from an economic & political crisis. It’s a double-edged sword situation across nations. In a developing nation like ours, leaders must step up. Here are key components nations can look into so that economic damage can be controlled also if executed well can transform the nation’s future.

The following are nine components that bring economic transformation in Nepal.


Investments in youth—particularly health and education—foster opportunities for developing a skilled and healthy labor force. Through strengthening health programs to address the full range of child, youth, and adult needs, children can grow into healthy adults who can contribute more significantly to economic growth. Education allows young people to learn skills to take on higher-quality jobs in a changing and growing economy. Through these investments, nations develop a labor force well equipped to move into new opportunities that emerge from a demographic dividend.

Three key areas of investment support young people’s needs now and lead to a well-prepared and productive labor force in the future:

Strengthening Health Programs: Improvements in health programs can foster the development of a population that is healthy and capable of contributing to economic growth.
Expanding Educational Opportunities: Improvements in the quality of education and school completion prepare young women and men with the abilities they need to move into formal-sector jobs, earn higher wages, and contribute to a demographic dividend.
Creating Jobs: Identifying sectors of the economy that can expand and foster job growth is essential to absorbing the incoming numbers of youth entering the workforce. All these investments are necessary to harness the potential of Nepal’s young people for social and economic development—fostering increased prosperity for the country. They pay off in improving the health and well-being of current populations, and they help position countries to achieve the accelerated economic growth resulting from a demographic dividend.


Human capital is a key component in policymaking. The role of knowledge, skill, and technology ideas is vital in human capital formation. Besides investing more in the active factor of production (human capital) within the country, we are eager to make the best use of knowledge of those who love Nepal, whose blood is Nepali, and whose heart is Nepali. Undoubtedly, NRNs and Diaspora are in a unique position in enriching the quality of our human capital. We take every measure necessary for their meaningful engagement. Undoubtedly, knowledge, skills, technology, and capital from NRNs and Nepali Diaspora will provide a much-needed impetus for economic development.

Allow me to spell out me of our priority areas where you can make a visible difference.

Technologies and techniques for high-yielding agro-varieties that are exemplary in Israel and Australia;
Agro-mechanization as can be found in Japan or USA; commercial, educational and governance digitalization as practiced in Korea;
Education and human resource development strategies as those of Singapore and Australia;
Infrastructures like that of China, development of alternative energies alongside hydropower, science, and technology as well as best practices in environmental protection.


Nepal is lagging far behind the rest of the world in technological research. There have been no investments from the public or private sectors. We mainly consume technological products rather than conducting our own research. We are fully dependent upon others for any technological advancement. Nepal also lacks human resources and investment to leapfrog past its global peers by adopting cutting-edge technologies. New technologies, such as digital mobile communications, drones for precision agriculture, and decentralized renewable energy systems that provide electricity in rural areas far from the grid, open up opportunities for leapfrogging. As developing countries have limited capabilities, opportunities for leapfrogging in these countries are presented primarily through the adoption of technologies. Innovation policies can help developing countries foster and facilitate the deployment of frontier technologies and their adaptation to meet their needs, to promote sustainable development.

Information and communication technology (ICT)
Talent youth’s inclination towards ICT
ICT solutions and BPOs (Business Process Outsourcing )
Service sector modernization.
Use of advanced technology on production and delivery of services – Research, innovation, and development
Increase access to banking and financial services

Available Fiscal Space (since we are low debt economy):

In comparison with other countries, we have very less amount of loan and we can be eligible for taking a facilitative loan in a very low interest provided by ADB, WB, and with the available fiscal space, it can help in economic transformation.


Harnessing Hydropower to Kick-start Growth in Nepal” focuses on how Nepal can prioritize the energy sector and make major investments in hydropower generation. This can lead to improved infrastructure in the country as well as help in the economic development of the country.

Opportunity: – 83,000 MW (43,000 economically viable)
Potential to export to India (power bank), Bangladesh, etc.
Agreement/MOU/Initiatives – SAARC, BIMSTEC and bilaters
Status: – Current production – 1073 MW(Tentative)
Far low production and improper management – experiences of long hours of a power outage (in the previous years)
Successful elimination of power outage within a short span of initiatives – Imports from India leverages the supply-side constraints

Under construction:
Plans – Production targets: 3,000 MW, 5,000 MW and 15,000 MW within 3, 5 and 10 years respectively.
Significantly reduces the transmission and distribution losses – Export to India, Bangladesh, and other countries


Nepal offers a unique comparative advantage for profitable and impactful investment in diverse areas of the tourism sector, including adventure, cultural, religious, and MICE (meetings, international conferences, and events) tourism.

Panoramic nature, geographical, cultural and biological diversity
Proximity to one of the largest and fast-growing economies
Policy: Increase tourists arrivals from 1 million to 2.5 million in 2025
Strategies – Develop tourism infrastructure
Airports – Upgrade of existing airports – Regional international airports (Pokhara and Bhairahawa going to complete soon)
Nijgadh International Airport – the potential for a regional hub
Connecting Indian and Chinese tourists and pilgrims through railways connectivity – Diversify destinations, products and enhance quality tourism


During the past five years, Nepal’s transport sector has grown at an average rate of 6.9 %. Currently, the sector accounts for 10.6% of Real GDP. Over the next five years, the government hopes to mobilize US$ 8.2 billion for road infrastructure, rail connectivity, and transport sector management. According to a national study for the National Planning Commission, to achieve its development targets, Nepal has to invest between 8 to 12 percent of GDP until 2020, which amounts to over a billion-dollar annually to adequately develop its infrastructure.

Roadways – Kathmandu Tarai Madhesh Expressway – East-west and North-South
Highways – Tunnel ways
Railways – Kerung (Tibet)-Rasuwagadhi-Kathmandu-Pokhara-Lumbini – Raxaul (India)- Birgunj-Kathmandu – East-West – Metrorail, Monorail


Nepal’s manufacturing sector is rich in potential, for both large-scale projects and innovative small-scale projects. The government is committed to supporting industrialization by promoting investment in the manufacturing sector. Industrial Districts and SEZs have been created to ensure a competitive and investment-friendly environment and to simplify administrative procedures. Some main areas of investment are FMCGs, garments, cement, pharmaceuticals, and metal and metal products. With a population of around 28 million, rising disposable incomes, rapid urbanization, untapped but growing rural areas, and a favorable regulatory environment, Nepal possesses huge potential for fast-moving consumer goods (FMCGs).

Industrial estates: 10 are in operation and 9 are under development
Special Economic Zone (SEZ): Bhairahawa SEZ shall in operation soon and 8 are under development
Economic corridors in major highways
Industrial villages in each local government (753 units)


From the economic perspective of benefits provided by biodiversity, direct use involves the selection and extraction of its ‘tangible’ elements (the goods or products) that can be consumed or traded in markets in exchange for other capital assets. The indirect or ‘non-use’ benefits are ‘intangible’, which cannot be traded (but there are being some efforts to explore the market potential for environmental services (In addition to valuable commodities such as timber. Well known forest environmental services include watershed protection, biodiversity conservation, and Carbon sequestration)

Following the promulgation of the new Constitution, the time has come to address the socio-economic aspirations of the Nepali people and investing in improving the lives of the general people. Nepal envisions a socioeconomic transformation that enables it to meet the goals of graduating from the LDC status by 2022, achieve the SDGs, and become a middle-income country by 2030. First is the identification of key growth drivers (KDGs) that can produce the required growth. KDGs could be agriculture and forestry, education, health, tourism, energy, transportation, small and medium enterprises (SMEs), information and communication technology (ICT), and urban development for Nepal. Foreign direct investment (FDI) also has a major impact owing to technology transfer and the influx of required investment. Industrial development in terms of forming a supply chain for multinational corporations and attracting light industries could be another KDG for Nepal.

Second, Nepal needs to identify and work on Major Transformation Initiatives that are able to remove institutional weaknesses and structural hindrances that deter the growth in KDGs. Major Transformation Initiatives could include knowledge and technology, decent job creation and skills development, social inclusion, competitiveness and innovation, reduction of disaster and other risks, reduction of income disparity, and effective public service delivery.

Productivity growth can be another Major Transformation Initiatives that Nepal needs to address.

About the Author

Ms. Khatiwada is the CEO of the company NRN Infrastructure & Development Limited and is currently a Ph.D. Scholar in Rural Development. She has experience of working as Chief Operating Officer at NRNIL for five years. Earlier she acted as HR & Admin Manager at Sanima Life Insurance Ltd. for 1.5 years, Senior HR & Administrative Officer at Sanima Mai Hydropower Ltd. for two years, and HR officer in Sanima Hydropower Ltd. for five years. She participated in several training programs and seminars in Nepal and abroad. She attended UNESCO sponsored training programs in water management in The Netherlands. She was invited as a speaker at the Hydro Vision International Conference in the USA in 2016, 2018, Hydro-2015 at France in 2015, and many other International conferences in Srilanka, Vietnam, etc. She has been awarded World-Changing women 2020 by Conscious Company –USA along with the most influential women of Nepal by RSTCA in 2020.

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