Print Edition - 2014-06-21 | MONEY
Political stability crucial for boosting investment, says Minister Mahat
Jun 20, 2014-
Finance Minister Ram Sharan Mahat has said the country is heading towards political stability and it could play a pivotal role in boosting domestic as well as foreign investment.
Speaking at the launch of the World Bank’s Country Partnership Strategy (CPS) for Nepal (Fiscal Year 2014-2018), Mahat said the global lender prepared the CPS for a full four-year period after being assured by the improvement in the country’s political situation.
Earlier, the bank prepared three three-year Interim Strategy Notes considering Nepal’s fragile political situation. The minister stressed on the need for focusing on economic growth amid improved political situation, stating it is necessary to graduate Nepal to a developing country by 2022 from the current least developed country status.
According to the National Planning Commission, Nepal’s economy should grow by more than 8 percent annually until 2022, to achieve the target.
“For this, there should be increased private sector investment, including foreign direct investment,” said Mahat, assuring the government was ready to remove any bottleneck to increase FDI. He also praised the World Bank for introducing the CPS which has focused on limited areas as desired by the government.
The CPS states it will focus on larger programmes that seek nationwide impact,
such as attracting active private sector participation in developing the hydroelectricity sector.
According to the CPS, the World Bank’s main focus will be on energy and transport sectors, creating conducive environment for private sector investment, agriculture commercialisation, education and improved social safety net.
These areas will be included under two broader pillars—increasing economic growth and competitiveness and increasing inclusive growth and opportunities for shared prosperity. In the education sector, the WB will shift its focus to skill building from the current broad enagement in primary, secondary and tertiary education and vocational training.
The multilateral lender has also planned to increase its aid to Nepal. According to the CPS, in the next four years, Nepal can potentially get assistance of about $200-300 million a year under the International Development Assistance (IDA), which was $210 million earlier, according to the CPS.
The bank’s private sector arm International Finance Corporation could also provide assistance to the hydropower sector to the tune of $300-800 million over the next four years, depending on the availability of viable investment, and improvement in business climate.
During the event, World Bank Country Director Johannes Zutt stressed on the need for increasing investment in infrastructure and inclusion, stating energy could be an enormous game changer for Nepal. Praising Nepal’s progress in reducing poverty, Zutt warned vulnerability still remains high in rural areas.
Published: 21-06-2014 09:12