Opening remarks by ADB Vice-President Wencai Zhang at the Envisioning Nepal 2030 Seminar on 28 March 2016 in Kathmandu, Nepal.
Right Honorable Mr. K.P. Sharma Oli, Prime Minister, Government of Nepal,
Honorable Mr. Bishnu Prasad Paudel, Minister of Finance,
Honorable Dr. Yuba Raj Khatiwada, Vice Chairman, National Planning Commission,
Honorable Ministers, Government of Nepal and Members of Parliament
Distinguished guests, participants, ladies and gentlemen,
It is a great honor for me to join this important seminar to start the preparation of Envisioning Nepal 2030. At the outset, On behalf of the Asian Development Bank, I would like to congratulate the Government of Nepal for the promulgation of the new Constitution under the leadership of the Right Honorable Prime Minister, and for pursuing a full consensus and initiating its implementation. Political and social stability is the foundation for long-term development. The new Constitution has indeed paved the way to a new era for Nepal, to meet the people’s aspirations of perpetual peace, development and prosperity, good governance, and social justice to ensure equitable development, as enshrined in the new Constitution.
In this context, ADB appreciates the recent decision by the Government of Nepal to establish a long-term socio-economic development vision and strategy. This is expected to set out clear pathways for achieving the country’s aspiration of graduating from the least developed country status by 2022, achieving the Sustainable Development Goals and becoming a prosperous middle-income country by 2030. We are happy to facilitate its preparation, together with other development partners. We are encouraged that strong political and bureaucratic leadership is already here to drive this process.
Long-term vision and strategy to drive accelerated and inclusive economic growth
Looking back at the past 50 years or so, Asia has made remarkable progress in economic development and poverty reduction. Rapid growth initially took place in Japan, and was followed by South Korea and the Asian tigers. Then it took place in the People’s Republic of China, and now it is emerging in India. For the example of Korea, its per capita GDP stood at about mere $100 in early 1960s but now reaches above $27,000. In the case of China, its per capita GDP increased from less than $200 in 1980 to more than $8,000 today.
In many of these countries, the remarkable progress made has been underpinned by rapid structural transformation of the economies from low-value to high-value industries. This process often came about as a result of deliberate and determined economic reforms and investments, which were led by a clearly stipulated vision and actionable strategies. Transformations took several phases, normally starting from initially an agriculture-based economy to export-oriented and labor-intensive manufacturing, and gradually to high-value industries. The governments played an important role during the process with strong leadership, by enhancing infrastructures, promoting private sector development, emphasizing human capital development, and attracting foreign capital inflows to finance investments. In ADB’s experience with the developing member countries in the region over the last 50 years, having a clear vision and strategy for the future can be an important step to initiate a rapid economic growth and structural transformation process in any country. The successes of China, Korea as well as Malaysia and Singapore, among others, are testament to this.
Contexts for Nepal
Turning our eyes to Nepal, the country has made commendable socio-economic development progress. Poverty decreased from 31% in 2004 to 25% in 2011, and is declining further. Inequality also declined. Nepal also achieved a majority of the Millennium Development Goals. However, to achieve SDGs and middle income country status by 2030, the country’s economic growth rate needs to be much higher than the 4.1% recorded over the last decade.
Since I assumed as ADB’s Vice President in December 2013, I am impressed by a number of studies available on Nepal, such as growth diagnostics, and various sector strategies and plans. Thus, we are clear about (i) country’s key growth constraints, such as infrastructure, human capital, policy uncertainties, and enabling business environment; and (ii) development potentials, including high-value agriculture, hydropower, tourism, and other competitive services and industries. Necessary steps to address the constraints and tap the opportunities have also been studied, with various degrees of specificity and time frame of actions.
In my view, these serve as building blocks for formulating a clear and inspiring vision for the nation and its key result areas; strategic directions and actions in those defined areas; and prioritized programs and projects, which can guide the nation to achieve the vision.
As regional cooperation and integration is one of ADB’s key strategic agendas in our charter and corporate strategy, I would like to underscore the importance of regional dimension in this country specific long-term strategy. Given the landlocked and relatively small market and the limited economic base, positioning itself into broader and deeper regional cooperation and integration would be particularly important for Nepal to turn itself from a landlocked country into a land-connected country, and unleash its huge growth potential.
Conclusion – International Seminar on Envisioning Nepal 2030
Excellencies, distinguished delegates, ladies and gentlemen, ADB is pleased to be assisting the National Planning Commission in organizing this international seminar on Envisioning Nepal 2030 strategy, inviting a group of highly renowned and respected scholars and policy makers. Your advice for Nepal on ways to accelerate economic structural transformation, and sharing of experience from other Asian economies which Nepal can learn from, would be extremely valuable. I look forward to in-depth discussions on identifying Nepal’s mid and long-term growth drivers and priority sectors, sequence of reforms, roles in regional connectivity and global value chain, and ways to catalyze private investments. I am sure that your insights can be embedded to make the country’s new longterm strategy truly inspirational and innovative, and yet well suited to the today’s context of Nepal.
In conclusion, I would like to express ADB’s willingness to further assist the government in formulating Envisioning Nepal 2030 strategy along with other development partners. This is indeed a first vital step towards achieving Sustainable Development Goals and becoming a middle income country by 2030, thereby accomplishing the aspirations of the Constitution. ADB also stands ready to help strengthen implementation capacity at both the central and local levels, which is critical to the success of the long-term strategy toward a prosperous future for the country.