Keynote Address by Shixin Chen, ADB Vice President (Operations 1), at the Nepal Investment Summit 2019 on 30 March 2019 in Kathmandu, Nepal
Distinguished Guests, Ladies and Gentlemen,
Many thanks for inviting me to give a special address on the interesting session: experience sharing.
I understand that this summit is not only for showcasing investment opportunities, but also for promoting knowledge and experience sharing.
ADB’s Experience of Investing in Nepal
To begin with, let me share with you a few words about how ADB invests in Nepal. The key is infrastructure investment, which accounts for about 70% our support.
First of all, to address the bottleneck of economy, we invest on energy, transport, water supply and other urban infrastructure services, education, and agriculture and irrigation.
Second, to bring about transformative impacts, ADB supports a number of “national pride” projects in Nepal, such as Melamchi Water Supply, and Gautam Buddha International Airport.
Third, to promote inclusive and balanced growth, we invest in the basic needs of people, such as rural roads, water supply and sanitation in small towns, microfinance, earthquake-damaged schools, climate change mitigation and adaptation, not to mention leveraging private sector investments in hydropower projects and tourism etc.
Key Priorities for Accelerating Investment in Nepal
Having said that, let me share ADB’s opinion about the priorities to speed up investment in Nepal.
First, building a robust and inclusive Federal System.
To fully unleash the potential of the federal system, clarity in the mandates and responsibilities of different levels of government; more resources for subnational governments to perform; reforms of state-owned enterprises; enhancement of government agencies’ capacity; and coordination among the three tiers of the government under the framework of national plans, are all required.
In the to-do list, I would like to highlight the importance of a sound budgetary process. Nepal can further strengthen the linkages between national plans, a medium-term expenditure framework, and annual budgets, to enable more longterm capital expenditure.
Second, engaging development partners.
To support Nepal’s ambitions of achieving the SDGs and becoming a prosperous country, it will need support from development partners and forge greater partnership with the private sector. Even countries that are now relatively developed in Asia and the Pacific made good use of development assistance in their early stages of development.
With continuing reforms, there are scopes to leverage more financial resources, technical know-how, and knowledge based on international experience.
Third, fostering private sector development.
In Nepal, recent improvements in the economy and reform initiatives signal progress in the enabling environment for private sector development. Greater private sector participation is essential to mobilize resources, introduce innovation and technology, bring better management, and most importantly, ensure sustainable development results.
Fourth, promoting regional cooperation and integration.
Nepal is situated between two large and fast-growing economies, India and China. While landlocked, Nepal can make itself a land-linked country by enhancing transport connectivity, developing regional energy markets, promoting tourism industry, and implementing trade facilitation measures. A number of regional forums, such as SASEC, SAARC, BIMSTEC, and BRI can be used to integrate Nepal’s economy into regional and global value chains.
Last but not the least, improving project preparation and implementation.
It is encouraging to note that the Government has taken bold legal and regulatory reforms to promote investment, such as the recently enacted PPP and Investment Act. However, a lack of investment-ready projects remains one of the key reasons behind low capital investment.
On project implementation, we highly commend the government’s initiatives to fast-track the execution of national priority projects. Ensuring timeliness, efficiency and quality in project implementation remains a challenge in Nepal. We hope such efforts can be fully integrated into the government’s public management system and build the confidence of investors.
ADB’s Commitment and Conclusion
Ladies and Gentlemen, to conclude, I would like to reiterate that this is an opportune moment for Nepal to focus on speeding up economic development. Nepal has large investment needs to develop itself into a middle income country, to achieve the SDGs by 2030, and to fulfill its ambition of becoming a prosperous country in 2043.
This is also an opportune moment for investors and development partners to contribute good ideas of promoting investments. I look forward to hearing from the panelists and the audience their experience and thoughts about investing in Nepal. All of us will benefit from the discussion.