KATHMANDU, Oct 27: Amid slowing industrial activity in the country, donor agencies have expressed readiness to help enhance the capacity of Nepali private sector to increase contribution of industrial sector to Gross Domestic Product (GDP).
Japan International Cooperation Agency (JICA), the Asian Development Bank (ADB) and International Finance Corporation (IFC), among others, have separately initiated homework to chart out the modalities of support to strengthen the Nepali business community.
Donor agencies are interested in extending support for formulation of Private Sector Development Policy (PSDP), establishing private sector development forum and strengthening relations between the private sector and other stakeholders.
The government is working to bring out a draft of PSDP with support from IFC after almost two decades after the country embraced open market economy.
According to Anil Kumar Thakur, joint secretary at the Ministry of Industry (MoI), the government is closely working with representatives of the Confederation of Nepali Industries (CNI) and Federation of Nepalese Chambers of Commerce and Industry (FNCCI) to chalk out PSDP.
Keshav Acharya, former senior economic advisor for Ministry of Finance (MoF), said it was encouraging that the donors are interested in enhancing the capacity of Nepali private sector at a time when the industrial output is slowing.
Meanwhile, ADB, a regional development agency in the Asia-Pacific, has also started ground work for identifying the absorption capacity of the Nepali private sector.
Efforts aimed at enhancing the capacity of the country´s private sector are being taken at a time when the contribution of the manufacturing sector to the GDP has been decreasing constantly. According to statistics compiled at the MoF, the contribution of manufacturing sector to the GDP has just been 6.2 percent in the fiscal year 2011/12.
“The government should be able to take optimum benefit from donors´ efforts,” said an official at MoI.
JICA is working to establish a private sector development forum. Embassy of Japan in Kathmandu has initiated talks with FNCCI, the apex body of the private sector, aiming to identify possible ways of cooperation.
“Embassy of Japan has expressed interest to facilitate private sector by establishing a bridge between Nepali and Japanese private sector through JICA,” said the FNCCI official. He added that the private sectors of the two countries would have extensive discussions and communications once the proposed forum is established.
Moreover, the Japanese government has also announced that it would provide assistance to the Nepali private sector through its official development assistance (ODA).
At a recent meeting with senior representatives of the Nepali private sector, ambassador of Japan to Nepal Kunio Takahashi had indicated that Japan would initiate support especially to enhance private sector capacity through ODA.