Abstract
The paper views urbanization as a driver of economic growth as well as poverty alleviation in Nepal. Nepal has natural resource advantage; but this is not fully used due to lack of market coordination and low productivity. The only way to raise and sustain economic growth is to enhance the competitiveness of cities using their comparative advantages. Nepal has not been able to make use of such advantages due to infrastructure deficit and institutional constraints. Cities are suffering from acute shortage of infrastructure and services. This has limited their competitiveness; and hindered the economic transition of the country. There is a lack of inclusiveness in service delivery as evidenced by poor services in slum areas. It has become difficult to sustain the inclusive nature of traditional towns. There is an increasing exclusion of the poor from service delivery. There is a lack of a holistic approach to positioning cities as engines of economic growth, business incubation, and skills enhancement. Urban infrastructure is not adequate to sustain the growth impulses, which has led to the erosion of competitiveness of cities. There are problems related to fiscal sustainability. Failure to mobilize the private sector has slowed down economic growth. The purpose of the paper is to address such issues and challenges of managing urbanization in Nepal. It aims to explore ways and means of transforming Nepal’s economy through increased investments in the lead activities of her urban regions that have comparative advantages.
The paper will begin with an analysis of the trend of urbanization in Nepal and explain its economic causes and implications. The pace of urbanization is highest in Nepal among the countries of South Asia. Urbanization in Nepal has led to economic growth. There is a high correlation between the two. It has helped to reduce poverty. The contribution of the urban sector to GDP is increasing fast. However, the access of the poor to services has decreased over the years. The paper will discusses the inclusive nature of traditional towns of Nepal and explore the economic causes of increasing exclusion. It will explore the implications of urbanization on the increasing trend of exclusion in service delivery. It will discuss the impacts of global economy and exposure to outside culture on livability. It will assess the extent of exclusion of slum areas and poorer people in the urbanization process. It will explore ways and means of halting the trend of increasing disparity with regional imbalances and formation of slums and squatters. Due to constraints in connectivity and power shortage, it has become difficult to use the linkage opportunities and growth impulses. The sudden openness after the change of 1990 and the growing remittance led to increase in dependency on outside economies. This led to import-intensive activities, real estate development, and housing at the cost of basic industries that enhance economic resilience. As a result, cities’ competitiveness has decreased. The paper will investigate how infrastructure can be better planned to sustain growth impulses making cities economically more competitive. It will deal with how to make cities more competitive in attracting investments. It will discuss the products of urban planning efforts and show how these can be made more useful in sustaining economic development through the delivery of infrastructure and services for housing and business. The growing economic role of the cities with the use of their comparative advantages has been threatened by the growing infrastructure deficits. Recognizing this, the paper will deal with how to make investments in infrastructure more result-oriented. It will show how infrastructure should be managed to enable cities to attract investments.
The paper will identify urban regions of Nepal. It will then explore the causes of failure to utilize their comparative advantages for development. In order to use the opportunities created by urbanization, it is necessary to invest in their lead activities. It will assess the impact of planning efforts on shaping the urbanization. Urbanizing rural areas in a planned way is the shortest way to urban growth and to sustain national productivity. It will try to show how to foster and sustain the growth of Nepal’s urban regions and enhance their competitiveness in ensuring sustainable development. It will suggest strategies to increase their competitiveness. It will work on how to make a breakthrough in creating more resilient and more self-reliant urban economies. This will be directed towards making economic transformation through the creation of export base. Finally, the paper will make an analysis of institutional set-up. It will deal with the required changes in institution related to governance and financing. It will suggest strategies for improving fiscal sustainability.