Focuses on high‚ sustained‚ inclusive economic growth
KATHMANDU: The World Bank (WB) today launched a two-pillar Country Partnership Strategy (CPS) for Nepal, focusing on increasing economic growth by raising investment in key sectors and making growth more inclusive by equally sharing opportunities across different groups and communities.
To meet the objectives of the five-year strategy, which will be in place from 2014 to 2018, the multilateral donor agency will concentrate on increasing hydroelectricity generation, enhancing transport connectivity, improving the business environment, boosting the productivity of agriculture sector, and equalising access to healthcare, skills development and social protection.
Although exact funds required to meet these objectives have not been mentioned clearly, the International Development Association of the WB Group will extend an aid of $222 million in 2014 and $200 to $300 million each in 2015, 2016, 2017 and 2018.
Also, the International Finance Corporation, the private sector lending arm of the WB, is expected to extend $300 to $800 million to the hydropower sector and $20 to $40 million to financial institutions, manufacturing sector, agro businesses and services sector.
Calling the five-year strategy ‘excellent’, Finance Minister Ram Sharan Mahat said the primary focus at the moment should be on increasing economic growth.
“To boost economic growth, we must increase investment as well as efficiency of investment,” Minister Mahat said.
The WB’s strategy also acknowledges growth as an important requirement for Nepal to further reduce extreme poverty and increase shared prosperity.
But most binding bottlenecks to growth and investment are poor and insufficient infrastructure, the WB has said, stressing on the need to develop energy and transport sectors.
“Nepal is sitting on enormous resources of clean energy, but that potential has not been tapped,” WB Country Director Johannes Zutt said.
In this regard, WB is mulling over increasing private sector participation in developing the potential for the country’s hydro-electricity generation. “And to lay the foundation for a more long-term engagement in hydropower, WB will also support to improve the governance, operational efficiency and financial performance of the energy sector,” says the strategy.
Over long-term, WB will focus on developing Nepal’s hydropower sector ‘with the goal of developing markets for power exports’.
Along with focus on hydro sector, WB has also pledged to help the country to improve its transport connectivity by strengthening rural transport network and improving connectivity to India, its largest trading partner.
Also, the WB will provide both long- and short-term support to improve the business environment, reduce the barriers to investment in key priority sectors such as tourism, agriculture and infrastructure, and support the financial sector to address economic risks stemming from the sector’s rapid expansion and associated distress in the banking sector, says the strategy.
“The WB along with the government is aiming to prioritise its engagement and move to a more limited number of large projects and programmes. This will allow for more attention to details through programmatic approaches, where technical assistance, knowledge provision and policy reforms are linked to or come ahead of any large investments,” says the strategy.
Among others, WB will extend support in improving agricultural productivity with a stronger focus on commercialisation, providing equitable access to quality education and relevant skills development programmes, increasing access of the poor and disadvantaged to improved health and nutrition services, and strengthening social protection programme, including management information and payment systems.
Source : The Himalayan Times