Nepal is undergoing two momentous transformations-from a rural to an urbanizing economy and from a unitary to a federal state. This book aims at understanding the first of these two transitions: Nepal's journey toward becoming a predominantly urban economy. Nepal is urbanizing rapidly-the Kathmandu Valley is one of the fastest-growing metropolitan regions in South Asia, and small towns are mushrooming in proximity to highways and on the border with India. At this critical juncture of Nepal's economic development, managing rapid urbanization is essential to improving the competitiveness of the urban economy, creating jobs, and accelerating economic growth. This growth will ultimately lead to reduced poverty. The study carries out an initial assessment of Nepal's transition from a predominantly rural to an urbanizing economy. This assessment aims at strengthening our understanding of the demographic and economic dimensions of the transition, and exploring the links between urbanization and economic growth in the context of Nepal. This book has five chapters. Chapter 1 presents an overview of the urban and economic transition in Nepal. Chapter 2 discusses the spatial patterns of Nepal's rapid urbanization and internal migration-a driving force of urban changefrom both a demographic and an economic perspective. Chapter 3 presents an initial assessment of the challenges facing Nepal's cities in urban planning and the delivery of infrastructure and services. And it discusses the spatial distribution of public expenditure for local infrastructure based on the results of a public expenditure survey carried out as part of the study. Chapter 4 presents a scoping assessment of the growth drivers of Nepal's urban economies and the main constraints to turning these comparative advantages into competitive advantages. And chapter 5 draws the main conclusions and proposes strategic directions and actions to accelerate urban-based economic growth and foster sustainable urban development. This initial assessment relies primarily on existing data sources and stakeholder consultations. The demographic analysis of the spatial transition is based on the population census statistics, including the 2011 Population and Housing Census data. The migration analysis relies on the latest data from Labor Force Surveys. The spatial economy analysis largely draws on the last two rounds of the Census of Manufacturing data made available for the study by the Nepal Central

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printed on recycled paper 1 2 3 4 5 07 06 05 World Bank Working Papers are published to communicate the results of the Bank's work to the development community with the least possible delay. The manuscript of this paper therefore has not been prepared in accordance with the procedures appropriate to formally-edited texts. Some sources cited in this paper may be informal documents that are not readily available. The findings, interpretations, and conclusions expressed herein are those of the author(s) and do not necessarily reflect the views of the International Bank for Reconstruction and Development/The World Bank and its affiliated organizations, or those of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply and judgment on the part of The World Bank of the legal status of any territory or the endorsement or acceptance of such boundaries. The material in this publication is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. The International Bank for Reconstruction and Development/The World Bank encourages dissemination of its work and will normally grant permission promptly to reproduce portions of the work. from 20 East Asia and Pacific (EAP) countries gathered in Manila for the second meeting of the East Asia and Pacific Infrastructure Regulatory Forum (EAPIRF). Regulators came from the infrastructure sectors of energy, telecommunications, transport, water and sanitation. The Manila meeting was hosted by the Asian Development Bank (ADB) and co-funded by the World Bank, the ADB, and the Public-Private Infrastructure Advisory Facility (PPIAF). The role of infrastructure regulators in involving consumers in the regulatory process was discussed and debated in the first half of the meeting. The findings of a World Bank survey of EAP regulators were first presented. Participants and invited speakers then shared their experiences of how infrastructure regulators can most effectively interact with users of utility services, especially low-income customers. This report presents the results of the survey of EAP regulators and discusses lessons of experience in consumer participation that emerged during the Manila meeting. The East Asia and Pacific Infrastructure Regulatory Forum was launched in 2003 with support from the World Bank, PPIAF and the ADB. The objective of the Forum is to promote good regulatory practices in infrastructure in the region by creating a cross-sectoral and multi-country platform in which regulators can share and learn from each other's experiences and knowledge. Experience of recent similar networks of infrastructure regulators supported by PPIAF, such as the South Asia Forum of Infrastructure Regulators (SAFIR) in South Asia and the African Forum of Utility Regulators (AFUR) in Africa, suggests that such fora ...

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