Monday, September 1, 2008

Double digit growth in Nepal: How and from where?

The Confederation of Nepalese Industries (CNI) just held an economic summit, with focus on garnering a national commitment for achieving double digit growth, in the next ten years. Before speculating and commenting on whether Nepal can really achieve double-digit growth and increase income per capita, I want to read the whole paper presented in the summit. Given the success of India, China, Vietnam, and other countries that initiated economic reforms in the past decades, I am positive that Nepal can also attain a double-digit growth rate. But, it might come at a price: high inflation rate, investment volatility, strain in the pegged exchange rate and high risk and uncertainty filled with sectoral bubbles.

...Annual national investment has to rise to Rs 400 billion from Rs 176 billion in the next 10 years to increase per person monthly income to Rs 12,000 from the existing Rs 3,500.

...the summit was organized in a bid to explore ways to arrange additional Rs 225 billion annually, besides seeking political commitment and necessary policies to incorporate such investments in future.

...hydro power, tourism, agriculture and industrialization as tools for economic development.

Here is a good Op-Ed written by Binod Chaudhary, the head of CNI clarifying his position and the summit's intention. Sorry it is in Nepali!

On a different note, here is an interesting interview about corruption in water sector and a humanitarian disaster following flooding in Bihar and Eastern Nepal.