Urban Growth and Spatial Transition in Nepal: an Initial Assessment (Directions in Development)

Nepal is one of the fastest urbanizing countries in South Asia. Its spatial transition is characterized by fast-growing population density in the Kathmandu Valley, along the main highways, and close to the border with India. Yet this urbanization has been less correlated with economic growth than in other South Asian countries. Accelerating growth would require broadening the base of economic activities and job creation in urban areas. Nepal's cities have not fully exploited their comparative advantages in strategic sectors like tourism, handicrafts, and agroprocessing. Lack of effective planning and inadequate infrastructure are major constraints for sustainable urban growth and city competitiveness and have increased vulnerability to natural disasters. To unlock urban-based growth and ensure the sustainability of the urban transition, Nepal needs to facilitate the clustering of economic activities, while creating the enabling environment for sustainable urban development and service delivery; promote the development and regeneration of the Kathmandu Valley; and enhance the competitiveness of strategic urban clusters-such as tourism, handicrafts, and agroprocessing-based on a partnership between the public and private sectors.

Urban Growth and Spatial Transition in Nepal carries out an initial assessment of Nepal's urban growth and spatial transformation, with a focus on spatial demographic and economic trends, economic growth drivers, and urban planning and infrastructure challenges. The study aims to stimulate evidence-based policy dialogue on Nepal's urban transition and to assist those working for Nepal's economic development-the government, private sector, civil society, and development partners-in framing policies and interventions for seizing the benefits and addressing the challenges of rapid urbanization.