Prime Minister Pushpa Kamal Dahal ‘Prachanda’ highlighted the economic challenges Nepal faces despite efforts to boost inclusive growth. He noted fiscal constraints, deficits, and rising debt servicing obligations, which create a significant resource gap for financing Sustainable Development Goals (SDGs), Nationally Determined Contributions (NDCs), and infrastructure development.
Inaugurating the 21st Replenishment Meeting of IDA (IDA21), PM Prachanda emphasized, “Our domestic resources alone are insufficient. Therefore, we aim to leverage private capital, attract Foreign Direct Investment, generate additional employment opportunities, accelerate economic activities, and enhance domestic revenue mobilization, while considering a change in the financing landscape after graduation from LDC status in 2026.”
Statement by PMPrachanda on the Opening of the IDA21 Replenishment Meeting:
Honourable Deputy Prime Ministers, Honourable Ministers, Senior Managing Director of the World Bank, Independent Co-Chair, Distinguished Delegates, Participants, Ladies, and Gentlemen,
Namaste and a warm welcome to all the delegates and members of the World Bank management.
Hosting this significant IDA21 meeting in Nepal is an immense honour. Nepal, renowned for its natural beauty and development potential, is pleased to extend heartfelt greetings to all esteemed IDA Deputies, Borrower Representatives, World Bank management teams, and the entire IDA family. This gathering symbolizes our collective commitment to sustainable development and acknowledges the challenges of securing essential development finance for the next three years.
Nepal has been an active IDA borrower for over six decades, celebrating 60 years of impactful collaboration. The support from IDA has been instrumental in achieving significant outcomes in infrastructure building and social development, including post-earthquake reconstruction efforts in 2015.
Despite capacity constraints, low project execution performance, and reduced spending, we are determined to restructure our policy frameworks. However, democratic systems necessitate patience and support in implementing these changes to continue our development aspirations and maximize the impact of IDA resources.
The proposed focus areas of IDA21—human capital, environmental sustainability, poverty reduction, energy access, connectivity, and digitalization—align perfectly with Nepal’s priorities. Addressing gender, jobs, fragility, and private investments are also crucial to our development agenda. The IDA21 policy package offers a strategic and outcome-oriented approach to international development, aiming to maximize the impact of investments.
For Least Developed Countries like Nepal, concessionality is vital. We face multiple crises, and our development gains are at risk. Climate change exacerbates our vulnerability, and we advocate for climate justice to compensate for losses incurred due to global circumstances.
Nepal, now politically stable, is on a path to economic development, leveraging our strategic location, hydropower resources, tourism, agribusiness sectors, and young workforce. However, challenges such as natural disasters, pandemics, and global economic headwinds have hindered our progress.
To ensure sustainable and resilient growth, Nepal adopts the Green Resilient Inclusive Development (GRID) approach, focusing on ten key transition sectors over the next decade. Our development priorities align with the World Bank evolution roadmap and global challenge programs. IDA’s support in strengthening country-driven models will empower nations to own their development agendas and build robust systems.
Reflecting on the Industrial Revolution, advanced economies benefited significantly, while Least Developed Countries were left behind due to inadequate infrastructure and political instability. It is time to address these disparities through collaboration, equitable access to resources, technology, and investment, promoting inclusive growth and global stability.
Despite our efforts to accelerate inclusive growth, fiscal constraints and increasing debt servicing obligations create a substantial resource gap. Our domestic resources are insufficient. We aim to leverage private capital, attract Foreign Direct Investment, generate employment, accelerate economic activities, and enhance domestic revenue mobilization, anticipating changes after our graduation from LDC status in 2026.
Investing in human capital, particularly in health and education, developing resilient infrastructure, and transforming lives are our priorities. Emphasizing digitalization, productive sector investment, entrepreneurship, and skill development is essential for creating jobs, promoting inclusivity, and accelerating growth. Climate action, addressing fragility, supporting small states, and ensuring water and food security are our responsibilities.
I am confident that this gathering will build a strong consensus among donors and borrowers on policy priorities and result frameworks for the next three years. I believe we will agree on record-high pledges to address the unprecedented crises of our time. The impact of IDA resources is vital for countries like Nepal to realize their full potential.
Before concluding, I wish this meeting a grand success and hope you have a pleasant stay in Nepal. Our beautiful country will surely leave you feeling that one visit is not enough. With the spirit of our culture “ATITHI DEVO BHAWA,” you will be well taken care of. The Government of Nepal is committed to ensuring the success of this important event.
Finally, I express my sincere gratitude to the World Bank Group management and the IDA family for their trust in Nepal and longstanding cooperation in our development endeavors.
