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Nepal Sector Competitiveness Notes (English)

The Government of Nepal (GoN) needs to foster new drivers of economic growth and competitiveness if it is to meet its objective of achieving middle-income status by 2030. The GoN laid out an ambitious plan for economic development in the 2016 Nepal trade integration strategy (NTIS). The NTIS prioritized twelve sectors positioned or with the potential for export-led growth. Objectives and priority actions were identified for each sector, including for cross-cutting issues affecting all sectors. Nepal has the potential to tap into growing world demand for medicinal and aromatic plants (MAPs) given the natural endowments in terms of endemic MAPs and the country’s long history of traditional medicine. The sectoral analysis suggests that there are several cross-cutting constraints faced by firms in Nepal across sectors that need to be addressed. Foreign direct investment (FDI) inflows in Nepal are amongst the lowest in the region and are hindered by restrictive policies on entry and operation as well as complex procedures and inadequate investment facilitation. The GoN has several ongoing initiatives to improve the investment climate and enhance competitiveness. The three notes provide policy recommendations to address the cross-cutting as well as sector-specific constraints that concern trade costs; export promotion; investments in skills and firm capabilities; the quality infrastructure; improve the business climate; and the regulatory environment for FDI.




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Nepal Sector Competitiveness Notes (English). Washington, D.C. : World Bank Group.