The Institute for Integrated Development Studies (IIDS) has held the second edition of its Policy Conclave on Friday.
The conclave centered around the theme “Nepal Vision 2100,” addressed Nepal’s critical structural challenges and explored actionable solutions. The event brought together policymakers, scholars, and key stakeholders to engage in discussions on long-term strategies for economic transformation and national growth, according to a statement issued by the IIDA.
The conclave featured insightful panel discussions and presentations aimed at fostering meaningful dialogue and shaping Nepal’s development roadmap. The active participation of all attendees was crucial to the success of the event, contributing significantly to shaping the discourse on Nepal's vision for 2100 BS and the strategies needed to achieve it over the next two decades.
The IIDS Policy Conclave was first launched in 2023 and serves as a platform to present Nepal’s critical structural challenges and explore pragmatic solutions for sustainable development. The 2023 conclave, themed “Structural Reform 2.0,” laid the foundation for initiating second-generation reforms, including governance, economic, education reforms, and digital transformation.
Building on these discussions, this year’s Policy Conclave focused on the theme “Nepal Vision 2100,” outlining a strategic development roadmap for the next two decades as an alternative to the Government of Nepal’s long-term vision embedded in the 15th Development Plan.
The theme “Nepal Vision 2100” is a critical response to 15th periodic plan developed by the National Planning Commission (NPC), which proposes specific targets for various socio-economic and economic indicators for the country to achieve by 2043/44 AD.
The government’s vision seeks to reshape Nepal's economy by reducing agriculture's GDP share from 27% to 9% and expanding industry’s share from 15.2% to 30%, and marginally increasing the service sector’s share from 57.8% to 61% by 2100 BS. This approach is similar to the practices adopted by most economies – transitioning from an agriculture-based economy to a more industrialized one and eventually transforming into a service-based economy in the long run.
However, in the case of Nepal, it is worth noting that there are several structural challenges and geopolitical
constraints that make Nepal an exception from following this model of growth. These challenges include the following:
1. Surging Private Credit: Private credit has expanded to 91.2% of GDP, with overall debt at 134% of GDP in 2024, but much of it is directed to unproductive sectors, posing financial risks.
2. Youth Migration Concerns: Over two million Nepalis have sought foreign employment, and more than three hundred thousand students have gone abroad in the past three years, risking an aging population before achieving economic wealth.
3. Trade Imbalance: Imports dominate 91.3% of trade (30% of GDP), while exports account for only 8.7% of trade (3% of GDP), reflecting weak industrial capacity.
4. Dependence on Remittances: Remittance accounts for 25% of GDP and supports 70% of households but contributes little to domestic capital formation and relies heavily on unskilled labor.
5. Misallocation of Resources: Remittances and credit growth are channeled into imports and real estate rather than domestic industries, while government spending fails to deliver productive outcomes.
Nepal additionally faces several geographical constraints and tensions, low productivity, trade imbalances, reliance on remittances, and high production costs. Despite India and China's remarkable growth, Nepal has seen little to no spillover benefits. India’s reforms and China’s rise as a global factory have transformed their economies, with per capita incomes now at $2,481 and $12,614 respectively, while Nepal lags far behind at $1,456. Further, limited exports, weak industrial output, political instability, and geographic disparities—such as underdeveloped northern Indian states and China’s concentration of infrastructure and economic activity on eastern coastal regions—further isolate Nepal, challenging the notion that proximity ensures shared economic benefits.
The Institute for Integrated Development Studies (IIDS) presents a revised “Nepal Vision 2100,” bridging the gap between aspiration and reality with a pragmatic and alternative strategic roadmap to guide the country’s development over the next two decades.
The IIDS’ Nepal Vision 2100 addresses these by shifting focus from "unlimited potential" to realistic priorities: transforming agriculture, leveraging natural resources, targeting high-value niche industries, and strengthening the service sector for sustainable growth. The service sector export is vital for Nepal's economy as it harnesses the country's unique strengths, including tourism, information technology (IT), Meetings, Incentives, Conferences, and Exhibitions (MICE), and security services, to generate foreign income and create jobs. Expanding service exports not only fosters a knowledge-based economy but also enhances global competitiveness and paves the way for sustainable long-term growth. The alternative roadmap of IIDS addresses the prevailing obstacles in the economy and aims to provide feasible and actionable strategies for Nepal’s sustainable development.
The vision seeks to bridge the gap between aspirations and realities and offers a strategic path to overcoming structural and policy challenges while maximizing the country’s long-term growth potential. A more achievable approach involves setting incremental targets, beginning with a growth rate of 5.5% that is facilitated by structural reforms and gradually increasing to 7.5% over successive periods.
With traditional industrial growth and FDI hindered by high costs and uncompetitive labor, Nepal must tap into key sectors like IT, education, healthcare, hospitality, and security services that offer significant growth opportunities. These industries, which collectively form a Knowledge Economy, can thrive beyond geographical limitations and provide scalable and more accessible services worldwide. Specifically, the IT sector has seen impressive growth in the past few years but contributes only 1.4% to GDP and $515 million to Nepal’s total exports. The healthcare sector faces workforce shortages, particularly among nurses, highlighting the need for
competitive opportunities within the country. The hospitality industry, especially MICE, religious and spiritual, trekking and mountaineering, sports and adventure, wellness tourism, holds untapped potential for high-value tourism. The security services sector, by making use of Nepal's Gurkha legacy, can expand into global cybersecurity and intelligence services. Strategic investments in human capital, digital literacy, and STEEM (Science, Technology, Engineering, English and Mathematics) education are crucial to building a globally competitive workforce and achieving long-term prosperity. A knowledge-based economy, characterized by high value, weightless and borderless, unlocks vast opportunities in sectors fueled by digital transformation and global connectivity. It enables nations to navigate global changes, foster high-value industries, and enhance living standards sustainably.
Focusing on service sector exports and a knowledge-based economy, backed by pragmatic economic policies, can drive sustainable growth by leveraging Nepal’s strengths in various service sectors and niche industries to generate income, create jobs, and reduce trade imbalances.
These strategies align with Nepal Vision 2100 BS by addressing structural challenges, enhancing global competitiveness, and advancing long-term economic transformation.
