Urgency Of Local Economic Development – The Rising Nepal

Report on Local Economic Development in Nepal and Alignment with Sustainable Development Goals

Economic Context and the Imperative for Sustainable Growth

An analysis of Nepal’s current socio-economic landscape reveals that economic factors are primary drivers of political and social dynamics. Public discontent, exemplified by recent youth-led movements, is strongly correlated with a failure to deliver inclusive and sustainable economic benefits. This situation underscores the urgent need for a development model that directly addresses the core tenets of the Sustainable Development Goals (SDGs).

• SDG 8 (Decent Work and Economic Growth): The nation’s high unemployment rate is a critical challenge. Nepal’s per capita income of approximately $1,500 and a GDP of $43.13 billion are below regional averages, indicating a significant deficit in achieving sustained, inclusive, and sustainable economic growth.
• SDG 1 (No Poverty): With its status as the second-poorest country in South Asia, Nepal faces substantial hurdles in eradicating poverty. The current economic model, which is highly dependent on remittances and has focused on resource distribution over production, has proven insufficient to enlarge the national economy and lift citizens from deprivation.

Local Economic Development (LED) as a Strategic Framework for the SDGs

To address these challenges, a strategic shift towards Local Economic Development (LED) is essential. LED is a process that empowers local governments, in collaboration with the private sector and community stakeholders, to build local economic capacity. This approach is fundamental to achieving equitable progress and is intrinsically linked to multiple SDGs.

• SDG 10 (Reduced Inequalities): LED promotes inclusive growth that can liberate socio-economically marginalized populations from destitution and discrimination by providing equitable opportunities.
• SDG 11 (Sustainable Cities and Communities): By focusing on building local capacity, LED directly contributes to making communities more inclusive, safe, resilient, and sustainable.
• SDG 17 (Partnerships for the Goals): The core of the LED model is the partnership between public, private, and community actors, embodying the collaborative spirit required to achieve the 2030 Agenda.

Components of an Implementable LED Plan

An effective LED plan serves as a roadmap for local governments to systematically implement initiatives that align with national aspirations, such as the “Happy Nepali, Prosperous Nepal” vision. Such a plan must be comprehensive and actionable.

1. Strategic Vision: A long-term economic vision that is aligned with national goals and the SDGs.
2. Situational Analysis: A thorough assessment of the local economy’s political, economic, social, technical, legal, and environmental context, identifying strengths, weaknesses, opportunities, and challenges.
3. Priority Actions: Clearly defined strategies and activities for key areas such as business development, skill enhancement, and sectoral growth.
4. Resource Allocation: Detailed budgets and timelines associated with each priority activity.
5. Monitoring and Evaluation: Measurable indicators to track progress and ensure accountability in achieving development outcomes.

Strategic Pillars for LED Implementation

Local governments can pursue several integrated strategies to stimulate economic dynamism and advance specific SDGs.

Business and Enterprise Development

Fostering an entrepreneurial society is pivotal for local revenue generation and job creation, directly supporting SDG 8. Key actions include:

• Creating a conducive environment for new business formation.
• Implementing policies to attract new investment to the locality.
• Building the capacity of existing local businesses to expand and upgrade.

Infrastructure and Locality Development

Developing a business-friendly locality is a foundational responsibility that underpins industrial growth and community well-being. This pillar is crucial for SDG 9 (Industry, Innovation, and Infrastructure) and SDG 11.

• Economic Infrastructure: Investment in local roads, electricity, and drainage systems to reduce transportation costs and support industry.
• Urban Planning: Strategic development of central business districts, effective land use zoning, and townscaping initiatives to create attractive and functional public environments.

Human Resource Development

Investing in human capital is essential for a productive workforce and ensuring that economic benefits are widely shared. This strategy is directly aligned with SDG 4 (Quality Education) and SDG 8.

• Skills Training: Promoting technical and vocational education through institutions like the Council for Technical Education and Vocational Training (CTEVT) to equip citizens with in-demand skills (e.g., plumbing, welding, carpentry).
• STEM Education: Encouraging a focus on Science, Technology, Engineering, and Mathematics to prepare the workforce for future economic opportunities.

Governance and Partnerships for Sustainable Development

The success of LED hinges on strong governance and multi-stakeholder collaboration, reflecting the principles of SDG 17. The Government of Nepal, through the Ministry of Federal Affairs and General Administration, supports these efforts via conditional grants like the Innovative Local Economic Development (ILED) programme. It is imperative that development partners also align their support with LED initiatives to ensure their interventions contribute effectively to sustainable and legitimate local progress.

Which SDGs are addressed or connected to the issues highlighted in the article?

1. SDG 1: No Poverty

   • The article directly addresses poverty by stating that Nepal is the “second-poorest country in South Asia” and that inclusive growth can “liberate socio-economically backward people from extreme forms of destitution, deprivation, and discrimination.”

2. SDG 8: Decent Work and Economic Growth

   • This is the central theme of the article. It highlights the “high level of unemployment,” the need to “create jobs and employment for the youth,” and the low “per capita income.” The proposed solution, Local Economic Development (LED), is focused on fostering “business development,” creating an “entrepreneurial society,” and achieving “inclusive growth.”

3. SDG 4: Quality Education

   • The article emphasizes “human resource development” as a key strategy. It specifically mentions the importance of “skill development, technical and vocational education,” and a focus on “Science, Technology, Engineering, and Mathematics (STEM)” to ensure people have relevant skills for employment, noting that skilled individuals are “less likely to be unemployed.”

4. SDG 9: Industry, Innovation and Infrastructure

   • The article discusses the need for “building economic infrastructure, such as local roads, electricity, and drainage” to support “local industrial growth.” This directly relates to developing reliable and sustainable infrastructure to foster economic development and support businesses.

5. SDG 10: Reduced Inequalities

   • The article calls for “inclusive economic benefits” and “inclusive growth that improves the livelihood of people equitably.” It aims to provide “equal opportunities with a level playing field” and liberate people from “discrimination,” which are core principles of reducing inequality.

6. SDG 11: Sustainable Cities and Communities

   • The focus on “Local economic development (LED)” and “locality development” connects to this goal. The article mentions strategies like “land use zoning,” “townscaping,” and “neighbourhood improvement” which are essential components of planning and managing sustainable local communities.

7. SDG 17: Partnerships for the Goals

   • The article highlights the importance of collaboration, stating that LED is a process where the “local government, in partnership with the private sector and community, works to build local economic capacity.” It also mentions the role of “Development partners” and central government support through conditional grants, emphasizing multi-stakeholder partnerships.

What specific targets under those SDGs can be identified based on the article’s content?

1. SDG 1: No Poverty

   • Target 1.2: By 2030, reduce at least by half the proportion of men, women and children of all ages living in poverty in all its dimensions according to national definitions. The article’s goal to liberate people from “extreme forms of destitution” aligns with this target.

2. SDG 8: Decent Work and Economic Growth

   • Target 8.1: Sustain per capita economic growth in accordance with national circumstances. The article’s concern over Nepal’s low per capita income of “$1,500” directly relates to this.
   • Target 8.3: Promote development-oriented policies that support productive activities, decent job creation, entrepreneurship, creativity and innovation. The entire discussion on LED, “business development,” and building an “entrepreneurial society” supports this target.
   • Target 8.5: By 2030, achieve full and productive employment and decent work for all women and men, including for young people. The article’s focus on the “Gen Z revolution” driven by “high level of unemployment” and the need to “create jobs and employment for the youth” is a direct link.

3. SDG 4: Quality Education

   • Target 4.4: By 2030, substantially increase the number of youth and adults who have relevant skills, including technical and vocational skills, for employment, decent jobs and entrepreneurship. The section on “human resource development” through “skill development, technical and vocational education” is a perfect match for this target.

4. SDG 9: Industry, Innovation and Infrastructure

   • Target 9.1: Develop quality, reliable, sustainable and resilient infrastructure, including regional and transborder infrastructure, to support economic development and human well-being. The article’s mention of “building economic infrastructure, such as local roads, electricity, and drainage” is a direct reference.

5. SDG 10: Reduced Inequalities

   • Target 10.2: By 2030, empower and promote the social, economic and political inclusion of all, irrespective of age, sex, disability, race, ethnicity, origin, religion or economic or other status. The call for “inclusive growth that improves the livelihood of people equitably” and liberates “socio-economically backward people” aligns with this target.

6. SDG 11: Sustainable Cities and Communities

   • Target 11.3: By 2030, enhance inclusive and sustainable urbanization and capacity for participatory, integrated and sustainable human settlement planning and management in all countries. The article’s description of an “LED plan” that includes “land use zoning” and “townscaping” reflects this target.

7. SDG 17: Partnerships for the Goals

   • Target 17.17: Encourage and promote effective public, public-private and civil society partnerships, building on the experience and resourcing strategies of partnerships. The article explicitly mentions partnerships between “local government, in partnership with the private sector and community.”

Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

1. SDG 1: No Poverty

   • Implied Indicator: Poverty rate. The article’s statement that Nepal is the “second-poorest country in South Asia” implies that the national poverty rate is a key metric of its economic condition.

2. SDG 8: Decent Work and Economic Growth

   • Mentioned Indicator: Per capita income. The article explicitly states Nepal’s per capita income is “$1,500.”
   • Mentioned Indicator: Gross Domestic Product (GDP). The article mentions the annual volume of GDP is “$43.13 billion.”
   • Mentioned Indicator: Unemployment rate. The “high level of unemployment” is cited as a primary cause of the “Gen Z revolution.”
   • Implied Indicator: Number of new businesses created. The strategy to “develop new businesses” and “attract new businesses” implies that tracking their creation is a measure of success.

3. SDG 4: Quality Education

   • Implied Indicator: Number of individuals enrolled in or completing technical and vocational training. The focus on “skill development” and “technical and vocational education” suggests that tracking participation in these programs would be a relevant indicator.

4. SDG 9: Industry, Innovation and Infrastructure

   • Implied Indicator: Investment in local infrastructure. The call for “building economic infrastructure, such as local roads, electricity, and drainage” implies that the extent and quality of this infrastructure are key measures.

5. SDG 10: Reduced Inequalities

   • Implied Indicator: Income growth for lower economic strata. The goal of improving the livelihood of “socio-economically backward people” implies a need to measure their economic progress relative to the national average.

6. SDG 11: Sustainable Cities and Communities

   • Mentioned Indicator: Existence and implementation of a Local Economic Development (LED) plan. The article states that an “implementable LED plan clearly outlines the strategies, priority activities, associated budgets, timelines, and measurable indicators of success.”

7. SDG 17: Partnerships for the Goals

   • Implied Indicator: Number of public-private-community partnerships. The article’s emphasis on this collaborative model suggests that the formation and success of such partnerships are a key indicator.
   • Mentioned Indicator: Amount of conditional grants for LED. The article mentions grants from the Ministry of Federal Affairs and General Administration, indicating that this funding is a measurable input.

SDGs, Targets and Indicators

Source: risingnepaldaily.com