IIDS Policy Conclave concludes with focus on knowledge economy

Kathmandu / Dec 30: The Institute for Integrated Development Studies (IIDS) organized the second edition of its Policy Conclave 2024 themed “Nepal Vision 2100”, addressing Nepal’s critical structural challenges and exploring actionable solutions on Friday in the capital. The event brought together policymakers, scholars, and key stakeholders to engage in discussions on long-term strategies for economic transformation and national growth. The event concluded with an appeal to focus on transforming Nepal into a knowledge economy.

Speaking at the program, Bal Krishna Joshi, founder of Xuno, underlined Nepal’s potential to transition from labor export to service export, particularly in the IT and fintech sectors. He pointed out the need for policy reforms and educational alignment with global standards to harness this potential. “We need to leverage the contributions of the Nepali diaspora and climate finance while advocating for clear governance and balanced policies to foster innovation and inclusivity,” he said.

IIDS chairman and member of parliament Dr Swarnim Waglé called for pragmatic strategies that align growth with global economic trends, emphasizing high-value agriculture, trade liberalization, and diversified tourism, including medical and dental tourism. He advocated for institutional reforms, FDI liberalization, and addressing elite policy capture to unlock Nepal’s potential.

Similarly, Dr Shiva Raj Adhikari, vice-chair of the National Planning Commission (NPC), advocated for a paradigm shift in development planning by linking resource allocation to municipality rankings and development indices. He emphasized the need for technically sound decisions and realistic growth targets. Dr Adhikari highlighted coordinated governance and equitable resource allocation as critical for achieving sustainable progress.

The IIDS Policy Conclave was first launched in 2023 as a platform to present Nepal’s critical structural challenges and explore pragmatic solutions for sustainable development. The 2023 conclave, themed “Structural Reform 2.0,” laid the foundation for initiating second generation reforms, including governance, economic, education reforms, and digital transformation, the organisers said in a statement.

According to the IIDS, the theme of Nepal Vision 2100 is a critical response to the 15th periodic plan developed by the NPC, which proposes specific targets for various socio economic and economic indicators for the country to achieve by 2043/44. The government’s vision seeks to reshape Nepal’s economy by reducing agriculture’s share to the GDP from 27% to 9% and expanding industry’s share from 15.2% to 30%, and marginally increasing the service sector’s share from 57.8% to 61% by 2100 BS.

Through the conclave, IIDS highlighted multiple drawbacks in the government’s plan including surging private credit, youth migration, trade imbalance, dependence on remittances, misallocation of resources, geographical constraints and tensions, low productivity, and high production costs. IIDS’s Nepal Vision 2100 attempts to address these problems by shifting the focus from “unlimited potential” to realistic priorities: transforming agriculture, leveraging natural resources, targeting high-value niche industries, and strengthening the service sector for sustainable growth.

Through the conclave, IIDS emphasized the development of key sectors like IT, education, healthcare, hospitality, and security services, which collectively form a ‘Knowledge Economy’.

As per the IIDS, these industries can thrive beyond geographical limitations and provide scalable and more accessible services worldwide. At the conclave Dr Kushum Shakya highlighted the importance of transitioning Nepal into a knowledge-based economy over the next two decades. She stressed the need for intergovernmental coordination and collaboration between experts and the government. Drawing lessons from Switzerland, she emphasized exporting high-value services and maximizing resource utilization to generate employment and drive economic growth.