Based on the need to accelerate pro-poor growth and other related priorities identified in the Tenth Plan, and extensive consultations with experts in the public and private sectors, four cross-cutting themes are identified for policy dialogue and analysis. The identified areas are

Macroeconomic management;

Economic policy on international trade, investment, and employment;

Economic policy on infrastructure development; and

Economic policy on tourism, agriculture, and regional development.

1. Macroeconomic management


A stable and consistent macroeconomic policy framework is critical for sustainable poverty reduction and economic growth. Sound macroeconomic management will also help strengthen financial markets and stimulate private investment. The worsening conflict situation and declining revenue growth have serious implications for the national budget. Improving fiscal management, sustaining monetary and external stability, and developing the financial sector are major challenges.


2. Economic policy on international trade, investment, and employment


Nepal's growth potential is closely linked to the global economy. The economic policy network will support the Government's recently approved Trade and Competitiveness Strategy by undertaking research on specific implementation issues and creating awareness among stakeholders of the key components of the strategy. Foreign direct investment in agriculture, industry, and service sectors, including tourism, has a critical role in this regard, as it is a principal instrument of technology transfer and improved management practices. Avenues for employment generation through medium, small, and micro enterprise development, with focus on women entrepreneurship, need to be explored.


3. Economic policy on infrastructure development


Poor infrastructure is a key constraint on economic growth. Integrated infrastructure development linked to balanced regional development could serve as a powerful instrument of poverty reduction given the close connection between poverty and excluded development. Improving rural infrastructure through access to transport, communications, market places, rural electrification and other infrastructure has a key role in building rural-urban linkages and alleviating poverty. In the process of decentralization, responsibilities for infrastructures such as roads and water are being shifted from the central to the regional government bodies. It is therefore imperative that such reforms are backed by sound economic policies to ensure a harmony between regional and national interests and an equitable distribution of the benefits.


4. Economic policy on tourism, agriculture and regional development


The Tenth Plan identifies agriculture and regional development as the key intervention areas for broad based rural development and poverty alleviation in the country. Likewise, tourism has also been given high importance for poverty reduction by virtue of its potential for realizing multiple objectives, including increased income and employment opportunities particularly in the hills and mountain areas; strengthening and expanding of the transportation network; development of regional markets and new tourism products; and the opening up of new areas for rural tourism. Research in these areas should include studies for addressing the productivity growth in agriculture, enhancement of income and opportunity in backward regions, effects of continued conflict in the tourism sector and exploring uniformity in the approach and policies related to agriculture and tourism in various regions of the country.