Intervention by Prime Minister of Nepal Rt. Hon. Pushpa Kamal Dahal ‘Prachanda’ as the Chair of the Group of LDCs at the High-Level Dialogue on Financing for Development 2023
New York, 20 September 2023
Ladies and Gentlemen,
I am making this intervention in my capacity as the Chair of the Group of LDCs.
We are convening this year’s dialogue as global economic growth is slowing.
In 2022, inflation worldwide was the highest in two decades.
FDI flows to LDCs contracted significantly in 2022, which had already decreased compared to the baseline of 2015, the halfway point of the Istanbul Programme of Action.
Against this backdrop, LDCs need massive mobilization of every possible resource avenue -domestic and international, and public and private.
Financing SDGs through private investment is an idea that is yet to materialize, especially for the LDCs.
Concerted efforts from governments, the private sector, and other stakeholders can help turn things around.
First, governments have the primary responsibility to create an sustainable enabling environment by reforming the business, investment, and industrial architecture in their countries. Many LDCs including Nepal have made utmost efforts to attract FDI by duly reforming their policies, laws, and institutions.
However, FDI flows to LDCs have not been adequate for various reasons – both internal and external. We need to focus on addressing this gap.
Second, LDCs have not seen any significant mobilization of blended finance. In theory, projects with sustainable dividends can be de-risked, insured, and made bankable with some public and philanthropic resources, so that private flows can be leveraged and crowded in.
In practice, it is perhaps time to demonstrate that this works by undertaking some model projects in LDCs.
Third, Integrated National Financing Frameworks can help better allocate resources and identify projects for private investments. We urge our development partners to assist us in preparing such frameworks.
Fourth, due to the lack of resources, our countries have not been able to project themselves as a better destination showcasing the products and potential. We need specific support to this end.
Strong partnership between multilateral development banks and national public development banks is a goal long overdue.
For LDCs, this should result in increasing access of micro, small, and medium enterprises to credit, business innovation support, and other services.
Financial inclusion of individuals, through the latest innovations and fintech helps generate savings and investable capital. We hope to build such infrastructure with the support of our development partners.
We also call for the early establishment of an international investment support center to promote FDI in LDCs as stipulated in the Doha Programme of Action.
Before I conclude, Mr. President, let me spend a minute to touch upon my national context.
We prepared an SDG Costing and Financing Strategy in 2018, which showed a huge financing gap from both public and private sectors.
This gap has only increased with the serious socio-economic repercussions of the COVID-19 pandemic and other crises.
We are preparing an Integrated National Financing Framework, hoping to devise holistic strategies to leverage investments and prioritize allocations.
Once completed, the INFF can complement an already strong investment architecture with FDI, trade, and industrial policies offering various incentives.
I am confident that this will facilitate increased foreign investment in the productive sector.
Thank you for your attention.