Policy Dialogue on Local Economics and Investments: Status and Possibilities

 

Policy Dialogue on Local Economics and Investments: Status and Possibilities

Dr. Nahakul K.C. former Vice Chairman of Planning Commission and Expert

(This paper was shared during the policy dialogues which was organized by the Lumbini Province Planning Commission on 14th Mangsir 2082)

1. Opening 

Honorable Chair, dignitaries, Secretary, former Mayor, representatives of private sector, and development partners—
Today’s policy dialogue allows us to reflect on the current economic status of Lumbini Province and explore practical pathways to expand local investment, generate jobs, and strengthen our economic foundations.

2. Current Status of Lumbini Province Economy

• Lumbini’s economy is gradually progressing, but growth remains irregular across sectors.
• Youth out-migration is still high despite the unemployment rate improving to around 8%.
• Infrastructure expansion is notable, yet project execution and absorption capacity remain challenges.
• Private sector enthusiasm is rising, especially in tourism, agriculture, and services—but capital inflow remains lower than the province’s potential.

3. Key Policy Priorities of the 2082/83 Budget

a) Growth and Production

• Strong push for agriculture modernization, value-chain development, and branding of local products.
• NPR 1.50 billion allocated for agriculture and land management.

b) Investment and Private Sector Promotion

• Startup ecosystem, innovation culture, and investor-friendly policies strengthened.
• Growing emphasis on tourism infrastructure and heritage sites with NPR 80 crores investment.

c) Youth Employment and Human Capital

• Gen-Z entrepreneurship program, skill development, internships, and returnee migrant reintegration.
• Practical, skill-based education promoted through “Padhdai, Sikdai, Kamaudai” initiatives.

4. Emerging Opportunities for Local Economic Growth

4.1. Agricultural Transformation

• Mechanization, contract farming, agro-cooperatives, and youth-led agribusiness.

4.2. Tourism and Cultural Economy

• Leveraging Lumbini’s global religious tourism brand, eco-tourism, adventure tourism, and cross-border mobility.

4.3. Infrastructure-Led Development

• Expanding connectivity in hills, plains, and Rapti Valley to support economic corridors.

4.4. Digital Economy & Gig-Based Employment (New – Key Addition)

• A fast-growing opportunity for youth to earn within Nepal without migrating.
• Areas such as freelancing, digital marketing, online services, content creation, e-commerce, and remote tech work are expanding rapidly.
• Lumbini can promote digital skills training, innovation labs, and youth gig work platforms to tap into global online markets.
• With improved internet access and targeted digital literacy programmes, the digital economy can become a major new source of youth employment.

4. 5. Private Sector Engagement

• Stronger public–private cooperation can unlock enterprise growth, startup accelerators, and co-investment in priority sectors.

6. Major Challenges That Must Be Addressed

a) Weak Implementation Capacity

• Delays in procurement, slow project execution, and low budget absorption.

b) Limited Fiscal Space

• Reliance on federal grants restricts scale and sustainability of programs.

c) Skill Gaps & Out-Migration

• Local industries face labor shortages while youth leave for foreign employment.

d) Digital Divide

• Unequal access to quality internet and digital training limits youth participation in the digital economy.

7. Immediate Priorities for Action

1. Fast-track high-impact projects in agriculture, tourism, youth skills, and infrastructure.
2. Establish a Provincial Investment Facilitation Desk for one-stop investor support.
3. Expand digital skills, freelancing training, and tech-enabled entrepreneurship.
4. Strengthen returnee migrant support through credit linkages and enterprise mentoring.
5. Improve monitoring systems to track job creation, enterprise success, and project outcomes.

8. Closing

Lumbini Province holds immense potential across agriculture, tourism, industry, digital services, and youth innovation. By improving implementation, strengthening partnerships, and investing in both physical and digital infrastructure, we can unlock a more dynamic, inclusive, and youth-friendly provincial economy.

Today’s dialogue is an important step toward converting policy commitments into real jobs, real investment, and real prosperity for the people of Lumbini.

Thank you.