Private Sector-led Economic Recovery from COVID-19
Employment & economic development
Business support & economic inclusion
Public sector policy
- World Bank - International Development Association
Major drivers of economic growth in Nepal like agriculture, tourism, and migrant remittance-fuelled consumption are expected to stall due to the economic impacts of COVID-19. This not only risks the loss of development dividends gained in the recent years but also exposes the country to a potentially long and difficult recovery period. With both supply and demand sides impacted by the current crisis, the private sector faces a tough challenge to withstand and re-emerge from the economic fallout from the COVID-19 pandemic.
Additionally, the drop in migrant remittances and tourism incomes, two of the major sources of foreign exchange, have exposed the country to risks of deeper economic instability. With a narrow-export basket and a heavily import-reliant economy, large drops in foreign reserves can turn into a balance of payments crisis. Without investment inflows to counter some of the impacts of this shortfall of remittance and tourism incomes, vulnerabilities to exogenously induced balance of payments crisis remain.
|Objectives||Private investments, supported by an enabling investment climate, contribute to Nepal’s recovery from the adverse economic impacts of COVID-19.|
|Target groups||Affected private sector players across the country with a special focus on Micro, Small, and Medium Enterprises (MSMEs). Indirectly, beneficiaries include affected people across the country, including disadvantaged groups. Federal and Provincial governments benefit from institutional development and capacity building components.|
Outcome 1: The Government of Nepal has a strong sectoral investment strategy in place to effectively support Micro, Small, and Medium Enterprises’ economic recovery in key priority sectors.
Outcome 2: Provincial and federal governments undertake investment climate reform initiatives to improve national doing business scores
Outcome 3: Key institutions effectively promote public-private dialogue, in both policymaking and investment, and awareness on investment climate reform.
1.1. Sector implementation plans are developed by the Government of Nepal, including key strategies, related investment climate reforms and investor prospectus
1.2. Operational guidelines and a Fiscal Commitment and Contingent Liability Framework are developed to support the Government of Nepal in effectively identifying and managing investments that are suitable for a Public-Private Partnership financing structure
2.1. The doing business national level action plan targeting COVID recovery priorities is developed by the Government of Nepal
2.2. The World Bank conducts quarterly business-pulse surveys and extends capacity building support to the Government of Nepal for future implementation.
2.3. Doing Business reports targeting COVID-19 priorities are completed in up to 3 provinces
3.1.The ‘Doing Business Promotion Coordination Centre’ is operationalised with staff, IT and M&E expertise
3.2. The ‘Industry and Business Promotion Advisory Council’ is re-established and repurposed with a private sector COVID-recovery mandate
3.3. A communications strategy for key reform implementation at national and sub-national level is designed in close collaboration with public officials and private sector representatives
Results from previous phases: This is a single-phase project.
|Directorate/federal office responsible||
International Financial Institution (IFI)
|Coordination with other projects and actors||Synergies with Swiss projects: Support to Relief and Recovery from COVID-19, Nepal Agriculture Market Development Program, Enhanced Skills for Sustainable and Rewarding Employment, Provincial Support Programme.|
|Budget||Current phase Swiss budget CHF 2’000’000 Swiss disbursement to date CHF 1’800’000 Budget inclusive project partner CHF 4’000’000|