KATHMANDU: Samantha Custer, Director of Policy Analysis, USA has suggested Nepal engage local government and local communities in the process of identifying and financing infrastructure priorities, as well as monitoring progress and impact.
Presenting her document at an interaction on ‘Responsible Infrastructure Development: How Nepal can structure foreign investment to ensure sustainable economic growth’ jointly organized by the Institute for Strategic and Socio-Economic Research (ISSR) and the US Embassy at the Pavilion Hall in Kathmandu, she emphasized lowering transaction costs and barriers to encourage the private sector investment.
Also a Professor Faculty at the College of William and Mary at Williamsburg of Virginia, Samantha said that the Nepal government’s fiscal management has kept debt levels low.
Stating that the chronic under-spending of the budget constraints infrastructure development, she said Nepal needs to direct 10-15 percent of its GDP annually towards infrastructure to put itself on a path to graduate from LDC status by 2022.
Nepal, she suggested, should invest in planning processes that fully account for total costs and benefits across the life cycle of the project.
Likewise, she also made it a point to suggest strengthening procurement processes to spark a free and open competition, transparent selection and budgeting.
“There is a growing recognition that infrastructure is critical to sustainable, balanced and inclusive growth,” she said adding, “An estimated US$6 trillion per year is needed in infrastructure investment globally.”
According to her, 30 percent of the total benefits of public investments are lost due to process inefficiencies.
Likewise, acquainting the participants on sustainable economic growth, Chairman of ISSR, Prof Biswambhar Pyakurel emphasized the need to restructure policies that are linked to Sustainable Development Goals (SDGs) to ensure Nepal’s mission of elevating the country to middle income by 2030.
“There is a greater need for transparency, especially with regards to the flow of foreign assistance because the major task is synchronizing policies with the federal governance structure,” he said.
He made it a point to state that Nepal’s revenue surplus has never been adequate to finance development expenditure.
Stating that Nepal suffers from a huge investment deficit gap, Prof Pyakurel said, “The investment requirement is 10-15 percent of GDP in the next 10 years.
Meanwhile, according to World Bank estimates, beginning 2011 through 2020, Nepal’s infrastructure requirement amount to 13 to 18 million dollars. “It raises a question about LDCs graduation by 2020 unless major policy changes are adopted and successfully executed,” he added.
He also referred to a study of the World Bank (Half Glass Full) that states South Asia requires large-scale resources, estimated at about $2.5 trillion by 2020 and $4-5 trillion by 2030.
Likewise, Sushil Bhatta, a member of the National Planning Commission (NPC), said that developing a sustainable project has been the government’s priority.
He stated that they have been prudent in identifying responsible infrastructure projects to ensure sustainability.
Former Finance Minister Surendra Pandey suggested that both the donor agency and the concerned authority need to be transparent to ensure corruption-free infrastructural development or projects.
“Reducing corruption has been a major challenge in the country,” Pandey said.
Meanwhile, Vanessa Colon, Political and Economic Officer at the US Embassy in Kathmandu; Jeffery Jamison, Senior Officer, US State Department; diplomats, lawmakers, professors, among others were also present on the occasion.
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