Statement delivered by Ghulam M. Isaczai, UNDP Deputy Resident Representative for Programme on the workshop-`Long Term Project Based Financing’ organized by Nepalese Young Entrepreneurs’ Forum

20 Jun 2007

Statement delivered by Ghulam M. Isaczai, UNDP Deputy Resident Representative for Programme on the workshop-`Long Term Project Based Financing’ organized by Nepalese Young Entrepreneurs’ Forum
Wednesday, 20 June 2007

Mr. Radesh Pant, President of Nepal Bankers Association,
Mr. Saurabh Jyoti, President of Nepalese Young Entrepreneurs Forum,
Ms. Rita Thapa, Founder of Tewa
Mr. Yogendra Shakya, Chairman of Hotel Ambassador
Other Distinguished Guests, Ladies and Gentlemen

It is indeed a pleasure for me to deliver remarks on an occasion such as this one.

First of all, let me begin by saying that `peace’ and `security’ are vital elements for the development of a private sector in any country. It is becoming increasingly clear that business has a role to play, not only to contribute to economic growth, but also to social development. It is only when the country can provide enough employment opportunities; it can talk about `sustainable development’ and `poverty alleviation’ while it is also essential that the government provides suitable policies and environment for the private sector to flourish.

Building successful and competitive private enterprises is a joint effort of the private sector, the government and not forgetting to mention here the important role of Public Private Partnership. While support from the International Community through aid, debt relief and fairer trade is essential, at the same time there are growing international demands for companies to be more transparent and more accountable for their economic, social and environmental impacts everywhere they operate.

The Millennium Development Goals, pledged to achieve by all the world leaders including Nepal by 2015 will look like a distant dream if all the sectors, most importantly, if the private sector does not come forward strongly.

The Millennium Development Goals Needs Assessment Report for Nepal 2006 shows that the Government must make a public investment of US$ 12.6 billion over the next decade if the Goals are to be reached. More than half that money must be channelled to reducing hunger, improving education and, critically, developing infrastructure. A poor transport network, lack of market access and limited electricity is hindering growth, especially in rural areas where most Nepalese live. The Report shows that donors must double their funding for development in Nepal over the next ten years.

UNDP is increasingly working on how we can further facilitate business to play a role in achieving the Millennium Development Goals (MDGs) as the businesses have a broader responsibility, not only to shareholders, customers and employees, but also to society at large. An example of this is the Global Compact—the Global Compact is a UN initiative to encourage the business community to contribute to UN, Government and civil society efforts to promote sustainable development, especially in the areas of human rights, labour, the environment, and anticorruption. The Compact essentially asks the private sector to identify, embrace and disseminate a set of clearly spelled out core values -- drawn mainly from internationally agreed treaties -- in the broad areas of human rights, labour and environment. Already over 4000 companies have signed up. Last year, we held a couple of meetings with some leading Nepalese business organizations which led to several Nepalese companies joining the international Global Compact Network. Now there are 20 companies which have registered themselves as Global Compact members. The underlying idea is that business creates employment and income, provides technical skills, and can bring marketbased solutions to pressing social and environmental problems. However, the business growth without a morale compass is not good enough

One of the policies of UNDP is promoting the Public Private Partnership in developing countries. Our Public Private Partnership for Urban Environment (PPPUE) project has successfully supported municipalities to work in partnership with the private sector and civil society to improve the urban poor’s access to basic services.

While Public Private Partnership is been able to provide relief to the central government and local authorities worldwide, the need to address pro-poor concerns is the challenge of the day. The quality of life in Nepal’s towns and cities is deteriorating due to rapid unplanned growth. The pressure on urban areas has greatly increased as the conflict led to an influx of people or the Internally Displaced People (IDPs) into municipalities which already lack the funds to improve access to drinking water, sewage and waste disposal services. The population of urban poor is estimated to be about 1 billion in 2001 and expected to reach approximately 2 billion by 2030.

It is generally taken for granted that urbanization and development go hand in hand but many simply miss the underlying fact that a large proportion of the urban population consist of the urban poor. As we accept that the local authorities have a resource problem due to the increasing demand, the urban poor are found to be the victims of resource limitations. It is generally presumed that the poor have no access to such services but in reality, access to urban utility services is not an option but a necessity. Thus, the poor are left to make alternative arrangements or availing services at a price much higher than that paid by the rich.

To site another example of UNDP partnership with the private sector—in 2006, negotiations between UNDP and Himal Power Limited went ahead towards initiating UNDP’s first partnership with a private sector organization in Nepal. The project will soon be implemented which aims to build a hydropower plant on the Khimti river to provide electricity to over 3000 households.

In Nepal, UNDP has been promoting the Public Private Partnership concept since few years through its project ‘PPPUE’. There has been progress in making legislative and administrative arrangements by Government of Nepal. Some operational Public Private Partnership projects are in practice now. But the major work is yet to be accomplished— that is creating an enabling environment for the financial institutions to come forward and provide loan facilities to investment type Public Private Partnership projects. Such projects are required in Nepal in the post conflict context and during reintegration and recovery. Infrastructure development is going to be a major thrust which again re-emphasizes the important role of private sector through Public Private Partnership arrangements.

Realizing the potential role of the private sector in financing central and local level infrastructure and urban utility services, many governments of developing countries in the Asian subcontinent have embraced the concept of Public Private Partnership.

I believe Nepalese Young Entrepreneurs Forum is indeed ‘forward looking’ by undertaking the responsibility of putting this agenda on the table today. I am sure that the deliberations will generate active discussions that will pave way for effective partnerships to build a new Nepal. I congratulate Nepalese Young Entrepreneurs Forum on this and wish a grand success of the event.

Thank you.