Decentralize the national economy: experts

Kathmandu, Jan. 23: Former finance minister Surendra Pandey Monday called for decentralising the national economy in order to achieve inclusive development and growth.

Addressing a seminar on 'Inclusive economic growth' organised by the Society of Economic Journalists - Nepal (SEJON) here he said, "Most of the economic activities are centred in the Kathmandu Valley and a couple of cities. Except teachers, all other government employees, including army and police personnel, mainly live in the Valley which has long been resisting the distribution of economic activities and budget allocation in other areas."

According to Pandey, it would be better to enhance economic areas before making programmes for inclusiveness.

"We need to enhance productivity for the rapid economic growth. For the equal distribution of the resources, we should have higher economic growth to ensure the availability of required resources," he said.

He urged for the development of entrepreneurship programmes and opportunities for the youth to achieve inclusive development.

 "To achieve higher growth-trajectory, we need to create entrepreneurship-based economy rather than job-based economy. So, the youth should be motivated to take up their own business initiatives, and opportunities should be created for the youth returning from the Gulf countries and elsewhere," said Pandey.

Dr. Swarnim Wagle, member of the National Planning Commission (NPC), said that the country made haste in bringing the inclusion to the front.

"There is more publicity of inclusiveness while we are lagging behind in creating environment for investment and wealth creation. As a result, we are running short of budget to address all inclusive and welfare measures," he said.

According to Dr. Wagle, 2-5 per cent of annual economic growth was not sufficient to pull the nation out of poverty trap.

In the past 26 years, the country had only once achieved the growth rate of 7 per cent. It achieved 7.6 per cent of growth in the fiscal year 1993/94.

He said that Nepal was yet to initiate structural transformation for the rapid economic development.

Country director of Asian Development Bank (ADB) Kenichi Yokoyama pointed towards three critical challenges for the growth – insufficient infrastructure and human capital, and lack of economic structural transformation.

"Nepal should focus on employment growth through entrepreneurship development. We would like to partner with the government in those areas," he said.

He suggested Nepal double investment in infrastructure projects.

"In addition to it, if the country focused on high value products rather than traditional agriculture products, it will play an important role in poverty alleviation and inclusive development," he said.

Joint secretary of the Ministry of Finance Baikuntha Aryal said that it was unfortunate that inequality was rising despite a tremendous improvement in the area of social development.

"Some of the problems are due to centralized allocation of budget and lack of coordination between the development projects. This has resulted in higher cost and time consumption in completing the infrastructure projects," he said.

Economist Bina Pradhan said that the reproduction sectors should be included in the economic sectors.

"Women contribute 52 per cent to the gross domestic product (GDP) but it is not calculated as the economic development," she said.

Former finance secretary Rameshwor Khanal said that infrastructure development and adoption of high-end technology were key to enhancing productivity.

SEJON president Gokarna Awasthi said that the country had the challenge to keep the foreign job seeking youth inside the country by creating entrepreneurship opportunity here.