Sector: Transport/Road Total Cost: $76 Million Status: Ongoing
Poor connectivity is a major development constraint for Nepal. This project aims to improve the country’s road network by creating a north-south link from the north eastern region to the main East-West Highway (EWH). This will boost major...
Sector: Transport/Air Total Cost: $940,000 Status: Completed
Nepal's civil aviation sector needs to be better equipped and structured for long-term, sustainable development. This technical assistance enhanced capacity of Nepal’s air transport services. It further reassessed the institutional capacity of the...
Sector: Transport/Road Total Cost: $800,000 Status: Completed
This project preparatory technical assistance provided a continuation of the Road Connectivity Sector 1 Project, necessary in the preparation of project design and feasibility studies for the Road Connectivity Project (RCP). The RCP improved...
Sector: Energy Total Cost: $259.56 Million Status: Ongoing
Nepal has abundant hydropower potential but faces chronic power shortages and low grid access to electricity. This loan will help Nepal address its urgent power system needs by facilitating expansion of domestic power transmission capacity, improving...
Sector: Transport/Road Total Cost: $75.90 Million Status: Ongoing
This loan and grant project will upgrade the country's road network to provide a north-south link between the North Eastern Region and the east-west highway, and improve major international trade corridors in the country in conjunction with the...
Nepal is a founding member of the SASEC Program, joining with Bangladesh, Bhutan and India in 2001 to form this project-based partnership. Maldives and Sri Lanka became full members of SASEC in May 2014, following several years as active observers.
Nepal’s new constitution, proclaimed in 2015, paves the way for rapid and inclusive economic growth. The Thirteenth Plan 2013/14–2015/16 aims to decrease to 18% the number of people living below the poverty line. Nepal’s Vision 2030 is working toward graduation from its least developed country status by 2022, achieving the Sustainable Development Goals, and becoming a middle-income country by 2030.
SASEC Projects in Nepal
Since 2005, the Government of Nepal has signed 14 ADB-financed SASEC investment projects worth around $1.8 billion.
Source: SASEC Project Portfolio, as of October 2019
Source: SASEC Project Portfolio, as of October 2019
In addition to the projects, ADB-financed technical assistance has supported SASEC investment projects in Nepal, regional cooperation forums and knowledge-sharing initiatives, and pilot projects since 2001. A total of 12 national technical assistance projects (worth over $9 million) have assisted Nepal in project preparation, strategic planning, and capacity building.
Direction of Intra-regional Trade
The value of Nepal's merchandise exports and imports trade with other SASEC member countries, using International Monetary Fund data from 2017, is captured in the tables below.
Nepal's top import source worldwide is India, with imported goods valued at over $6.3 billion.
India is Nepal's largest export market worldwide, with exports valued at $347 million. Bangladesh is its 11th top export market, with exports valued at $7 million.
Source: IMF Direction of Trade Statistics, as of May 2018
Nepal Trade - ImportSource: IMF Direction of Trade Statistics, as of May 2018
Nepal Trade - ExportSource: IMF Direction of Trade Statistics, as of May 2018
Ease of Doing Business
Nepal ranks 110 out of 190 economies in the World Bank’s Doing Business rangkings. In 2018, Nepal changed regulations pertaining to fixed-term contracts, probationary periods, working hours, paid maternity and sick leave, night work for women, third party approval in case of redundancy and unemployment protection. The country’s tax authorities are considering the use of an e-filing system to make compliance easier for businesses.
Source: Doing Business, accessed December 2018
Note: The World Bank/International Finance Corporation's annual flagship Doing Business Report measures the ease of doing business by ranking economies from 1 to 190, based on quantitative indicator sets that can be compared across economies and over time, with first place being the best and indicating a regulatory environment is conducive to business operation. Of immediate relevance to SASEC aims and goals are indicator sets on Starting a Business, and Trading across Borders.
Logistics Performance Index (LPI)
Nepal's overall LPI score for 2018 is 2.51, a significant improvement from its 2016 score of 2.38 and only slightly below the South Asia regional average of 2.51. The country climbed 10 spots to 114 out of 168 economies, from 124th place in 2016. Improvements in customs efficiency, customs clearance procedures, trade-related infrastructure, and ease of doing cross-border trade account for the improved score for Nepal.
Source: World Bank LPI (accessed December 2018)
Note: The LPI overall score reflects perceptions of a country's logistics based on six core dimensions: (i) efficiency of customs clearance process, (ii) quality of trade- and transport-related infrastructure, (iii) ease of arranging competitively priced shipments, (iv) quality of logistics services, (v) ability to track and trace consignments, and (vi) frequency with which shipments reach the consignee within the scheduled time. The scores for the six areas are averaged across all respondents and aggregated to a single score using principal components analysis. A higher score indicates better performance.
Nepal expanded by 7.1% in fiscal year (FY) 2019, performing better than projected due to production in agriculture, industry, and other sectors having done better than forecast. Growth is expected to remain strong, with the GDP forecast to grow by 6.3% in FY2020. Inflation for 2020 is projected to reach 5.5% on an increase in government expenditure.Source: Asian Development Outlook 2019 Update (ADB)
Economic activity in Nepal remains robust as FY2018/2019 growth reached 7.1%, on the back of growth in tourism, a rebound in the agriculture sector, and the ongoing reconstruction from the 2015 earthquake. Headline inflation rose to 5.3% year-on-year in May 2019. Maintaining the recent growth momentum while fostering an environment for sustained high and inclusive growth is the challenge that Nepal must face.Source: South Asia Regional Update, August 2019 (IMF)