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Nepal Economic Summit 2014 was held on 24th, 25th and 26th March 2014 at Soaltee Crown Plaza, Kathmandu. The Summit brought together policymakers, private sector representatives, foreign investors and economic growth experts to discuss and debate about Nepal's economic reforms.
NEPAL ECONOMIC SUMMIT 2014
DECLARATION – A COMMITMENT TO ECONOMIC
Upholding the values of a democratic nation dedicated to the creation of inclusive and broad
based economic growth,
Recognizing the need for creating an economic system that enables the private sector to grow
and create wealth,
Sharing the common vision of graduating from ‘Least Developed Country’ status by 2022, of
enabling economic growth to create better opportunities for employment in Nepal,
We, the representatives of, Government of Nepal, private sector, development partners and
civil society have joined hands and deliberated on Nepal’s Economic Reform Agenda on 24 th,
25th and 26th of February, 2014.
Learning from the experiences shared by panel of international experts on economic reform
conducted by various countries around the globe,
Adhering to the principles of creating a level playing field for market participants,
Distinguishing agriculture, tourism and energy as the priority sectors for Nepal’s Economic
Reform, hereby declare that,
We will work together to realize the following overall and sectoral reforms in 2014:
OVERALL REFORM AGENDA
1. In order to create a shared vision and create an environment of policy stability that is
crucial for attracting investment, we propose to get this declaration be a basis for
‘minimum common economic agenda’ of Nepal.
2. In order to improve the overall investment environment, we will prioritize entry/exit
procedural reforms and eliminate regulatory processes that add to the cost of doing
business and do not add value to the regulatory information gathering process
specifically in the sectors of agriculture, tourism and energy.
3. In order to create at least 50,000 additional jobs by the private sector in the areas
related to agriculture, energy and tourism of Nepal by 2015 and gather capital for large
scale projects in agriculture, energy and tourism, we will identify and work with local
and global investors to execute at least 4 different large scale projects in each sector.
4. In order to accelerate the process of reforms, we will work to table draft legislations
related to the economy including Energy, Agriculture and Tourism at the legislature and
work on getting them passed with required adjustments and updates. We will work on
adopting the Energy Development Strategy, Tourism Development Strategy and
Agriculture Development Strategy within the next six months with appropriate action
plans for respective stakeholder agencies.
5. In order to bring in the second generation reforms that will enable private sector led
growth, we will create a high level mechanism including members from the civil service
and the private sector to identify regulatory burdens and propose solutions such that
we can move up 10 places in the ‘Doing Business Rank’ by 2016. The report will be
produced by the end of 2014 and we will work on the reforms proposed by such
mechanism for the next two years to achieve our goal by 2016. Inter-agency
coordination between various government agencies will be crucial for these reforms.
Therefore, in order to carry forward the recommendations made by the High Level
Committee, an Implementation Monitoring Committee comprised of the Secretaries of
the concerned Ministries will be formed under the Chairmanship of the Chief Secretary
of the Government of Nepal.
6. In order to strengthen public institutions, improve the service delivery and facilitate the
businesses institutional reforms will be started immediately.
SECTORAL REFORM AGENDA
AGRICULTURE REFORM AGENDA
7. In order to facilitate economies of scale and thereby providing incentive for private
sector participation and ensuring food and nutrition security in the country by
increasing production and productivity, we will review the existing land management
systems and bring about regulatory framework that allows for contract farming and
effective utilization of land. In terms of using land effectively, priority will be given to
projects that adopt a value chain approach and help reach out a wide network of
beneficiaries in the form of small farmers.
8. In order to facilitate the commercialization of agriculture, we will assess existing policies
and programs on their effectiveness in terms of costs and reach to the targeted
beneficiaries. In doing so, we will work on improving mechanisms such that they do not
distort the market dynamics but create a level playing field. One such measure of
increasing effectiveness may be voucher schemes that target end recipients while
creating a space for private sector participation. High priority will be given to review of
programs, policies and regulatory framework in agricultural inputs and produce market.
9. In order to encourage private sector investment in agriculture, we will work for
increasing public spending in agricultural infrastructure development including but not
limited to irrigation, agriculture roads, warehouse and storage facilities, local market
centers and research and extension targeted to commercial agriculture. While
developing these infrastructures, priority will be given to public private partnership.
Public spending in research of commercial agriculture will be increased and private
sector participation in extension services for commercial agriculture will be facilitated.
Specific expenditure on agriculture infrastructure, research and extension for
commercial agriculture will be made public in the upcoming budgets.
10. In order to develop human resource capacity needed for commercialized agriculture, we
will work on increasing public spending and enabling private sector investment in
technical, vocational and academic education related to the demands of a
commercialized agriculture market. These will translate to specific short term and long
term training programs, additional educational institutions providing agricultural studies
in their curricula and a review and adjustment of the existing agriculture curricula to
meet the future demands of a commercialized agriculture sector. To this end, we will
work on adding adequate additional technically trained human resource through public
spending targeting youth. We will encourage more institutions to run agricultural
courses in the days ahead.
11. In order to increase investment of private sector in commercial agriculture, we will work
on developing and implementing incentive mechanism for high value products where
Nepal can have a competitive advantage.
ENERGY REFORM AGENDA
12. In order to resolve the immediate gap of electricity demand and supply and encourage
efficient use of energy, demand side management will be given priority. Following
Nepal’s commitment to climate change conventions, specific incentive and packages will
be developed and offered to industries that practice energy efficient processes and
technology including industries that practice cogeneration. We will introduce these
incentive packages in the upcoming budget of fiscal year 2015/16.
13. In order to encourage innovation in energy supply and increase in private sector
participation in this sector, we will work on setting up an independent power trading
company. The independent power trading company will provide a platform for trading
energy between individual consumers and suppliers thereby reducing the fiscal burden
of Nepal Electricity Authority (NEA). This kind of power trading company will require
open access to existing transmission lines. Therefore, we will work on introducing ‘open
access’ on existing transmission lines to the extent possible with a ‘wheeling charge’ to
use these facilities. In addition, we will work on expanding transmission lines internally
to help connect projects that are in the pipeline. All forms of energy suppliers including
hydropower and solar power will be invited to participate in this power trading
arrangement. This will also increase grid connectivity and contribution to national
power structure by renewable sources such as solar energy. Construction of cross
border transmission lines and framework for cross border power trade will also be
accorded due priority to help increased exchange of power between Nepal and India.
14. We will expedite the passage of electricity related legislations in the legislature while
incorporating the suggestions from concerned stakeholders that will provide conducive
regulatory framework for the private sector to invest in the sector.
15. In order to increase private sector participation in efficient biomass energy production,
existing incentive schemes will be revised to make them technology neutral. Incentive
schemes will target end users while facilitating innovation in technology development of
plants such as biogas plants and improved cooking stoves. This will help diversify current
reliance on traditional sources of firewood and animal dung to sustainable sources such
TOURISM REFORM AGENDA
16. In order to increase private sector investment in tourism, we will work towards
developing both tourism infrastructures where our performance lags behind
significantly at the moment. We will specifically focus on up-gradation of Tribhuwan
International Airport, construction of regional airports in Lumbini, Nijgadh and Pokhara.
For the airport construction and operation, we will invite private sector participation by
adopting the public private partnership model. These airports construction will be
announced in the upcoming budget and private sector will be invited through open bids
to participate in their construction and management. We will work on inviting the
private sector through open bids for better management of services at Tribhuwan
17. As air safety has become a major issue in the tourism sector, we will work on improving
air safety through regulations and upgrading infrastructural facilities at existing airports.
Specific programs on air safety will also be announced in the upcoming budget.
18. In order to promote conservation and expand tourism products with private sector
involvement, we will work on developing a favorable framework for tourism
development that complements not only conservation and bio-diversity but also allows
us to earn revenue to make the conservation sustainable. This kind of framework will
define specific rules and regulations under which we can invite private sector can
participate in developing high value tourism products in the conservation areas. In
developing such kind of framework, learning from experiences of countries that have
already used this mechanism in tourism promotion will be used.
19. In order to increase our tourism receipts from the current 36 USD per capita to 60 USD
per capita through expansion of products and services, we will work on choosing five
strategic locations to develop them as tourist destinations by the end of 2016. In
choosing these locations, we will work extensively on strategic studies that assess the
market viability of these locations. We will ensure the inclusion of Lumbini, Janakpur,
and three locations from far east and far west region in these five locations. Given our
proximity to India and China and the increase in outbound tourists from these countries,
we will target tourism development to this particular market segment. We will then
work on framing targeted strategies for infrastructure development and market
promotion of these destinations.We will also ensure the inclusion of existing sites that
are vying for United Nations Heritage status in this expansion process and develop
infrastructure to facilitate the process of acquiring UN Heritage status. We will adopt a
value chain approach to the development of these destinations and ensure community
involvement to enlarge the beneficiary group that results from this expansion.
Reiterating our commitment to economic reforms in Nepal, we hereby declare to
institutionalize the Nepal Economic Summit as an annual event to be jointly organized by, the
Government of Nepal and Federation of Nepalese Chambers of Commerce and Industry
(FNCCI). The agenda set by the Summit will be taken forward by the Government and the
private sector through joint forums like the Nepal Business Forum (NBF). We will also jointly
organize Nepal Business Conclave as a medium to promote investment in the Nepalese
Done on the 26th day of February of the year 2014 of the Gregorian calendar in