Kathmandu, 12 Sep: Finance Minister Dr. Swarnim Wagle has said the government is preparing to introduce five special economic packages simultaneously, with the aim of ending the slowdown in the economy and increasing investment, production and employment.
Speaking at the 28th Annual General Meeting of the Society of Economic Journalists-Nepal (SEJON), he said the government has identified post-disaster reconstruction, capital market reforms, private-sector recovery, efforts to remove Nepal from the Financial Action Task Force (FATF) grey list and mobilization of international finance as the key pillars of economic recovery.
Describing the next five months as crucial for Nepal’s economic recovery, Wagle said the government was moving ahead with work on five packages to make the economy more dynamic.
The first package being prepared by the government focuses on recovery and rehabilitation following the Bhotekoshi floods. He said the government has already assessed the situation of industrialists, business owners and ordinary citizens affected by the floods and has prioritized relief, rehabilitation and reconstruction.
Wagle said the government’s approach is not limited to immediate relief and that it is also preparing to use post-disaster reconstruction as an opportunity to build climate-resilient infrastructure.
He said data from studies conducted by the National Disaster Risk Reduction and Management Authority, the World Bank, the National Planning Commission and the Ministry of Finance on reassessing the damage and reconstruction needs were broadly consistent.
Finance Minister Wagle also said the government plans to announce a 10- to 12-point policy reform program for capital market improvement within a week.
He said the government wants to develop the capital market not merely as a platform for monitoring daily fluctuations in share prices, but as a mechanism for mobilizing long-term productive finance.
Third Package to Focus on Private-Sector Recovery
The third package will focus on revitalizing the private sector, Wagle said. He said the government is preparing a special package to restore confidence in a private sector that has remained weak for a prolonged period, restart industries that have been shut down or operating below capacity, and encourage new investment.
He clarified that the package would not be limited to large corporate houses. The government plans to cover farmers, small and medium-sized enterprises, startups, self-employed youth, tourism entrepreneurs, information technology companies, cottage and small industries, diaspora investors and foreign investors.
Government Industries to Be Handed Over to Private Sector
Wagle said the government has adopted a policy of handing over the operation of state-owned industries that have remained closed or troubled for decades to the private sector rather than operating them itself.
He said detailed due diligence assessments (DDAs) of seven public enterprises, including Gorkhakhali Rubber Industry, Hetauda Cement and Udayapur Cement, have already been completed.
The government plans to manage the assets and liabilities of these enterprises and then hand over their operation to the private sector through a defined process.
“There is an impression that the government has started running the industries, but we have merely dusted them off. We will take them to a certain point and then hand them over to the private sector,” Wagle said.
Wagle said an economy worth around NPR 7 trillion cannot be made dynamic through the government budget alone.
He said the government’s total capital expenditure stands at around NPR 437 billion. Although the amount would increase when spending by provincial and local governments is included, he said public resources would still be insufficient to meet the country’s huge investment requirements.
He also said the government has moved forward with the long-discussed process of issuing diaspora bonds to channel the savings of Nepalis living abroad into productive sectors.
Similarly, he said work to issue bonds denominated in Nepali rupees to international investors is being advanced with support from the Asian Development Bank and the International Finance Corporation.
FATF Grey List and International Financing
The government’s fourth package is linked to Nepal’s international financial credibility, Wagle said. He said the government is giving high priority to efforts to remove Nepal from the Financial Action Task Force’s (FATF) grey list.
He added that mobilizing international financial resources for the reconstruction of damage caused by the Bhotekoshi floods has been taken forward as the government’s fifth economic recovery package.
At the program, Federation of Nepalese Chambers of Commerce and Industry (FNCCI) President Anjan Shrestha said the Bhotekoshi floods had caused unprecedented damage.
He urged the government to introduce a special package for affected industrialists, business owners and traders and take measures to promote and support the private sector.
