Also the WB says “No more grants”. Let’s have a combo approach for prosperity and wellbeing.

Another little good news for Nepal: the World Bank, WB joined the Asian Development Bank, ADB in suspending grant support to the country. The decision was announced during the recent meeting of the Board of Governors of the Bank held in Washington DC. Once again the Government, represented by Finance Minister Ram Sharat Mahat tried to persuade the WB that Nepal, given the transitional phase is experiencing, is still in need of grant support.

As I advocated earlier (see ADB please say no, 22^nd august, http://sharing4good.org/article/adb-please-say-no ) I believe it is a great deal for all of us to hear for the second time in a row that Nepal now falls in the group of nations with low risk of debt distress.

Of course there is still a long way before Nepal can raise money on its own through the global finance markets as few African countries have been doing recently but, at least, we are starting a new path.

Yet both banks will still give Nepal a special treatment because all the future loans will be “soft”, with a very low interest rate.

At same it is unfortunate to read recent news that the bills aimed at revitalizing the investment climate are still blocked in the parliament. People were hoping that the Nepali Congress would implement its pledge to kick off new dynamics into the national economy.

The intentions are certainly there but probably the government is struggling to keep pace with all the innumerable (here I am not referring just to the economic sector), priorities while finding a consensus on the new constitution seems impossible.

Certainly stalling the proceedings in the parliament or loosing precious time in procedural matters related to intra parities coordination mechanisms do not help.

The consultations on reforming the labor market are stuck on a couple of very sensitive issues like “no work, no pay”. A similar frustration happens with the proposals to revolutionize the social security system that could be instrumental in raising the living standards for millions of citizens.

Yet it is a missed opportunity. The political uncertainties should not slow down the much needed political will to forge ahead a consensus on implementing an agenda for economic transformation of the country.

Without neglecting core social sectors like education and health still in need of massive investments, the Government should come up with a strong and ambition strategy to harness foreign aid to boost economic growth. Significantly some donors are moving in the right direction with new initiatives creating economic opportunities and jobs at local level. Yet a smart mobilization of foreign aid won’t be enough though. We need a Grand National Plan but please something tangible, concrete nothing like the usual job offered by the National Planning Commission.

If the conditions are not there for making this “grand plan” possible, then minister of finance must show his authority and statesmanship by offering small but incremental signs of change.

Here we have a great opportunity to merge economic interests with social ones. More and more attention at global level is given on how business opportunities can also generate strong social “returns”.

Indeed Nepal should attract not only more foreign direct investment but also “impact” investments that are, according to the Global Impact Investing Network, GIIN, (http://www.thegiin.org) :

“Impact investments are investments made into companies, organizations, and funds with the intention to generate social and environmental impact alongside a financial return. Impact investments target a range of returns from below market to market rate, depending upon the circumstances.”

Plenty of investors, all over the world, are ready to combine the pursuit of profit together with the goal of improving living conditions of millions of the people who are the bottom of the pyramid.

Interesting enough also the traditional not for profit sector, both national and international, could introspect and re-think a bit their strategies and working modalities and embrace, at least, partially, the new wave of social investments. Education and health sectors could also attract “social” impact investments. Certainly in a country like Nepal there is space to socially innovate in these two key areas.

Imagine a national chain of private but highly affordable kindergartens or primary education institutions offering high quality education at affordable cost; think about a network of health clinics that do generate profits but also are able to meet the social needs of local communities by offering “fee plans” specifically designed for the poor. These are just few examples but the literature is rich in proving how to make money while meeting social goals.

Last but not the least we should not forget that the environment conducive for impact investments should be nourished within a broader framework that fosters social innovation.

Recently Unicef came up with Idea Studio as a national pitching competition to award the most promising ideas. Just imagine if more resources would be pulled to really foster new and bold ideas either in the not for profit and for profit sectors or at the intersection of the two.

So kudos to ADB and WB for their decisions but as you can see, to really graduate the country to a next level of development and most importantly to a new height of people wellbeing, you need a web of synchronized actions played through synergies among actors, new partnerships forged on the ground and a lot of “out of the box” thinking.

Only a “combo” approach with state, private and not for profit sectors and development partners united can bring the country to a new level of prosperity.