Reforming Investment Climates:
Public-Private Dialogue/Creating Common Ground

Transitioning to peace and democracy after more than 10 years of conflict poses many challenges for Nepal—none greater, perhaps, than creating jobs and sparking new economic growth.

But deep divisions mar the country, slowing the pace of private sector development. A lack of unity makes it hard for industry groups to come together to address important cross-cutting issues and identify key pro-business reforms that still must be made to rebuild the economy and reduce poverty.

Overcoming this breakdown is crucial to improving the investment climate, and greatly helped by the presence of a trusted international partner. This is the goal of the Nepal Business Forum, a new initiative drawing on IFC’s extensive experience supporting public-private dialogues in low-income countries. Bringing government and business together under the Prime Minister’s leadership, it targets key sectors such as agriculture, tourism, infrastructure, and others, with IFC facilitating a more open exchange of ideas than has been possible until now, steering talks toward specific, noncontroversial reform measures that can work for everyone.

“If we want to bring about a change in the economic map of Nepal, just as there has been in the political map, then it is vital that there is a change in the way we formulate and implement economic policy,” says a key participant, banking leader Anil Shah. Supported by our British and Norwegian donor partners, the forum applies the World Bank Group’s experience with 30 similar initiatives worldwide. Bringing many stakeholders together to define and solve common business problems, these have led to 400 reforms to date: lower port fees in Cambodia, simpler taxation of coffee growers in Laos, and establishment of a primary skills development authority in Bangladesh. With an 88 percent approval rating in public opinion polls and a strong track record of seeing its reform ideas adopted, the Bangladesh Better Business Forum stands as an especially good model for Nepal.