In Nepal, IFC is helping develop the local financial system and physical infrastructure and providing advisory services to help minimize business regulatory constraints.
Recognizing the crucial role of the private sector, the Nepalese government has also initiated an ambitious program to attract investment and create jobs. To support this effort, since 2008, IFC, in partnership with the United Kingdom Department for International Development and the Norwegian Agency for Development Cooperation, has been working on the design and implementation of an effective public-private dialogue platform known as the Nepal Business Forum to promote private sector participation in policy formulation and reform, through a systematic and results-oriented process.
Despite the overall challenging political environment, the forum has been a stable space for the private sector and government to work together to improve the country’s investment climate.
The forum also established the Eastern Regional Business Forum to address sub-national business issues. At a prominent meeting in January, Prime Minister Baburam Bhattarai praised IFC’s work and strategy, which he said was aligned with that of the Nepalese government. He urged IFC to continue its important work in the country and stressed the significance of public-private partnerships to contribute to the country’s aspiration to achieve double-digit economic growth.
With quick wins such as simpler tax systems, greater market access in international markets, enhanced access to infrastructure, and reduction of illegal taxes, the forum has gained the confidence of its participants.
IFC was instrumental in bridging the gap between the government and private sector, because of its strong relationship with both entities. The forum’s recommendations resulted in a $ 4.83 million annual compliance cost savings for the private sector and an estimated $ 5.3 million additional revenue for the government through reduction of electricity theft.
Challenges to development still exist in this fragile and conflict-affected economy. However, according to Anil Sinha, Head of Advisory Services in South Asia, “the Nepal Business Forum is an encouraging feature of a post-conflict developing country environment.”