The Nepal Institute for Policy Research (NIPoRe) and the Asia Competitiveness Institute (ACI) at the Lee Kuan Yew School of Public Policy, National University of Singapore, unveiled the Nepal Competitiveness Index 2024 Report on February 22, 2024. This collaborative venture between NIPoRe and ACI meticulously scrutinizes the socio-economic competitiveness of Nepal’s provincial units.

The comprehensive report evaluates Nepal’s provinces across 64 indicators spanning four crucial domains: macroeconomic stability, government and institutional framework, financial landscape, business environment, workforce conditions, quality of life, and infrastructure development. This edition marks the second release of the report, following its debut in 2022. Additionally, the report includes an addendum focusing on the digital competitiveness of the seven provinces.

The publication of the Nepal Competitiveness Index 2024 Report signifies a significant milestone in understanding and assessing the socio-economic landscape of Nepal’s provinces. The collaboration between NIPoRe and ACI underscores a commitment to meticulous analysis and informed decision-making.

Upon examining the report’s findings, it is apparent that Bagmati province leads the pack, setting a high standard of competitiveness across all domains. Following closely is Koshi province, displaying commendable performance. In contrast, Sudurpaschim and Karnali Provinces face challenges in their rankings, highlighting areas that may require targeted attention and strategic interventions to bolster their competitiveness. Acknowledging the disparities among provinces is imperative, urging endeavors to bridge these gaps for a more balanced and sustainable development trajectory for Nepal as a whole.

Key Findings of NCI 2024 for Overall Competitiveness Ranking:

1. Bagmati province secures the top position across all four domains, closely trailed by Koshi.
2. Sudurpaschim and Karnali Provinces rank at the bottom.
3. Koshi and Gandaki provinces exhibit improved overall standings, while Lumbini experiences a decline.
4. Madhesh province demonstrates notable progress in government and institutional settings but encounters challenges in macroeconomic stability, quality of life, and infrastructure development.
5. Lumbini maintains its rankings or experiences a decline across all domains.

Regarding digital competitiveness performance, Bagmati emerges as the most competitive province, followed by Gandaki, Koshi, and Lumbini. Sudurpaschim and Karnali rank as the sixth and seventh best performing provinces respectively. Surprisingly, Madhesh ranks as the fifth competitive province despite having more potential for performance across this competitiveness analysis given the province’s geography and its closeness to major urban towns in India. Madhesh particularly struggles in terms of core digital inputs despite its favorable geographical location for technological infrastructure and its proximity to India, a rapidly advancing technological nation.

The NCI 2024 publication also features two guest perspectives from senior Government of Nepal officials. Kabinra Nepal, an Under-Secretary at the Ministry of Federal Affairs and General Administration (MoFAGA), sheds light on the key challenges Nepal faces in governing its federalism more effectively. Similarly, Chakrapani Sharma Poudel, a former Under-Secretary at the Office of the Prime Minister and Council of Ministers (OPMCM), highlights the vital initiatives undertaken by the federal government, including the formulation of pertinent plans and policies, to ensure the smooth operation of Nepal’s federalism.

Additionally, NCI 2024 briefly explores how Nepal’s urban centers influence the competitiveness of the country’s provinces. While previous studies have shown a positive correlation between the number of urban centers and a province’s competitiveness, this correlation does not currently hold true in Nepal. For instance, despite Bagmati having 43 urban centers, it ranks as the best performing province across all environments and competitiveness metrics. In contrast, Madhesh ranks fifth despite boasting the highest number of urban centers, namely 77. This anomaly primarily arises from the fact that many of Nepal’s urban centers are still in nascent stages and undergoing further development, particularly in terms of economic activities.

In conclusion, the report underscores the significance of narrowing the gap between Bagmati province and other provinces to foster sustainable development across all competitiveness measures. Moving forward, the Nepal Competitiveness Index stands as a valuable resource for policymakers, researchers, and stakeholders to identify strengths and areas for enhancement, contributing to the collective goal of nurturing inclusive growth and prosperity across all provinces of Nepal.

By Jaya Jung Mahat*

*Author Bio – Jaya is the Founding Director of the Nepal Institute for Policy Research (NIPoRe). He is also the project head and the lead researcher of the ongoing Nepal Competitiveness Index works in Nepal.