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Hotel Marriott

The Regional Launch of 2019 South Asia Economic Focus (Fall 2019) “Making (De) centralization Work”


The World Bank Group and I­nstitu­te for Integrated Development Studies (IIDS) organized the Regional Launch of the South Asia Economic Focus (Fall 2019): “Making (De) Centralization Work” on 19th November at the Kathmandu Marriott Hotel. This biannual report of economic development and outlook for South Asian Region aims to provide background and timely analysis of financial development relevant to the World Bank Group. The latest South Asia Economic Focus on Making (De) centralization work highlights the key policy issues and challenges of decentralization in South Asian region. Mr. Faris Hadad-Zervos, World Bank Country Manager for Nepal gave a brief introduction of the report and further extended his views on the report and how it not only focuses on economics and decentralization in global context but also informs Nepal’s operational opportunities and challenges arising during this nascent federal transition.

Dr. Hans Timmer, Chief Economist of South Asia Region of the World Bank, delivered a keynote on Regional Economic Outlook, Making (De) Centralization Work. He claimed that the GDP forecast for different South Asian Countries were optimistic, and especially so for Nepal, whilst acknowledging the Nepali economy’s peculiar structure. He cautioned on the problems brought about by high growth rates such as pollution and water and energy scarcity, but contended that countries can strive for higher growth by addressing these problem.

Subsequently, the report was launched by Dr. Swarnim Waglé, Chairman of IIDS and former Vice-Chair of the National Planning Commission, Dr. Hans Timmer, Chief Economist for South Asia Region World Bank, and Mr. Faris Hadad-Zervos, World Bank Country Manager for Nepal. The launch was followed by a panel discussion on: “Why it Matters for Nepal’s Sustainable Growth Aspiration”, which was chaired by Dr. Swarnim Waglé, along with four panelists -- Ms. Kantika Sejuwal, Mayor of Channdanath Municipality, Jumla, Ms. Mausami Shrestha Director of Shree Nagar Agro Farm, Prof. Dr. Pushkar Bajracharya, Tribhuvan University and Dr. Hans Timmer, Chief Economist for South Asia Region, World Bank.

Dr. Hans Timmer argued that decentralization makes sense in context of improvement of service delivery but if local units lack institutional capacity then it cannot ensure quality service delivery. Drawing on the report, he claimed that, if countries go for more and more decentralization in such situation, there is a danger and risk of fragmentation. He thus advised for assistance from the central government as many small independent states or sub-region in the country may lack state capacity.

Ms. Kantika Sejuwal, Mayor of Chandannath Municipality, Jumla argued that while the local units have right to make numerous laws and policies there exists gaps in implementation. She shared her dissatisfaction on how due to lack of coordination between three tiers of governments, the sentiment of federalism seems to have failed in local bodies. Similarly, Ms. Mausami Shrestha analogously put forth how running a company is same like running a country. She pointed out four pillars for decentralization namely good communication system, production system, legal system and financial system.

Prof. Dr. Pushkar Bajracharya claimed how Nepal is confused about the concept of decentralization and to what extent Nepal is ready to decentralize; while acknowledging how federalism is a new exercise in Nepal, whereas decentralization is not. He recalled how decentralization was implemented by the Local Self Governance Act (1998) and then by the Constitution in 2015. He noted that lack of coordination in planning among local bodies – across municipalities as well as across the three tiers of government is one of the reasons why Nepal faces implementation challenges. He recognized the need to upgrade institutional deficiencies of the sub-national government, setting up conditional funding from the government along with assistance in terms of supply of human resource and institutional support to local governments.

Mr. Faris H. Hadad-Zervos, Country Manager for Nepal

Dr. Hans Timmer Chief Economist for South Asia Region, World Bank



Chair & Moderator: Dr. Swarnim Wagle, Chairman, IIDS, and former Vice-Chair, National Planning Commission

 Ms. Kantika Sejuwal, Mayor, Chandannath Municipality

Ms. Maushami Shrestha, Director, Shreenagar Agro Farm P Limited, Shreenagar Agritech Industries Private Limited Fresh Mart

Prof. Dr. Pushkar Bajracharya, Professor, Tribhuvan University

Dr. Hans Timmer, Chief Economist for South Asia Region, World Bank 


Book Launch


Download soft copy of the full report below: