London, with a GDP of $565 billion out of the United Kingdom’s $2.6 trillion total GDP, and New York with a $1.1 trillion GDP out of the United States’ $18.57 trillion total GDP, are classified as Alpha cities by the Global and World Cities Research Network. London and. New Work stand as testaments to human civilisation, especially the ever expansive global economy and world trade network that binds the world together. Author Parag Khanna, in Mckinsey & Company, writes, “The 21st century will not be dominated by America or China, Brazil or India, but by The City”.

Cities are more important than they have ever been in terms of economic and political influence. Today, if we take New York out of the US, London from the UK, Mumbai from India and the Pearl River Delta megalopolis from China, the economies of these countries will come to a standstill, as these urban areas are the prime drivers of economic growth in their respective countries.

In Nepal, the Kathmandu Valley consists of 40 percent of total jobs generated in urban areas, followed by Biratnagar and Birgunj with 17 percent and 15 percent respectively. Nepali cities and towns now contribute 33.1 percent of Nepal’s total GDP. Nepal is also urbanising at an ever increasing rate. There are six metropolitan cities in Nepal (Kathmandu, Patan, Pokhara, Bharatpur, Birgunj and Biratnagar), and among these six, the Kathmandu Valley and Pokhara are the largest cities in hills whose altitude is above 1,000 meters above sea level; the remaining four are from the Terai region.  Among 11 sub-metropolitan cities, nine of them belong to the Terai (except for Hetauda and Dharan).

Surprisingly, the Government of Nepal’s strategic focus has been to ask for official development assistance for the Himalayan and hilly region by capitalising on the progress of the Terai. Manufacturing, services and construction are booming in the Terai, providing heavy returns for the national GDP of the country. Among the 10 largest GDP-contributing districts, Kathmandu’s share alone is 15.8 percent, and among these 10, seven belong to the Terai.

This data clearly shows that Nepal is on the path to an urban-centric economy. Yet, our approach, understanding, narratives and vision remain rural, which by far contributes much less to the national economy. Not only is the city becoming the engine of economic growth, it is also a melting pot for intellectuals, businesspersons, and entrepreneurs since urban areas, with their dense populations and range of activities, are great platforms for information sharing and networking.

Rural-urban divide

For decades, development agencies and the government have been pouring billions of dollars into Nepal’s rural areas. Unfortunately, roads, basic health and education facilities built in rural area tend to go to ruin after the life of the project ends. The area youth ultimately migrate to the city in search of better opportunities. It is thus necessary to expand cities and bring them to rural areas instead of building up rural areas themselves to become urban. For instance, expanding Kathmandu to Dhulikhel as part of a ‘Greater Kathmandu’ would be much more efficient than developing Dhulikhel itself as a separate urban entity. This is due to the fact that, the ‘urban force’ of Kathmandu will attract Dhulikhel and integrate it into Kathmandu’s great supply chains.

The reasoning behind expanding urban areas is to extend supply lines to a greater population. Each rural Karnali youth wants to make it to Birendranagar or Nepalgunj or Kathmandu. Birendranagar provides fine manufactured goods and services to high altitude places like Humla and Dolpa and in return, Birendranagar takes all the surplus value of these areas, including its human resources. Thus, we need well-managed settlements from the mid-hills down to the southern plains. Similarly, Birgunj-Hetauda-Kathmandu, Nepalgunj-Kohalpur-Birendranagar, Siddharthanagar-Kapilvastu-Butwal, and Biratnagar-Itahari-Dharan can all be developed as new urban economic corridors due to the fact that their integrated supply chains would reach a greater population.

If we are to learn from the booming cities in the Terai and the power of cities in building the national economy, the government needs to develop a strong strategic focus on urbanisation. This means a departure from the rural-led hills/Himalayas development discourse towards a mid-hill and Terai discourse. We need to integrate an urban development framework by developing city corridors and merging rural municipalities into city corridors that are situated in the same area. Nepal must therefore capitalise on its urban centres and promote urbanisation as a new strategic focus for growth.

Pant is an IR analyst