Nepal faces significant challenges in realizing the full potential of its population due to insufficient investment in human capital, according to an opinion piece by Faris Hadad-Zervos, World Bank Country Director for Nepal, and published in the Nepali Times on August 13, 2025. The article highlights that many young people in Nepal lack access to quality education, healthcare, and skills necessary for success in today’s economy, particularly those living in poorer or remote areas.
The recently released Nepal Human Capital Review by the World Bank reports that a child born in Nepal is expected to reach only 51 percent of their productivity potential by age 18. This gap is attributed to limited access to essential services such as education and healthcare. The report also reveals stark regional disparities: children born in Bagmati are projected to achieve 58 percent of their productivity potential—comparable to upper-middle-income economies—while those from Karnali are expected to reach just 46 percent.
These differences arise not only from geography but also from unequal access to quality public and private services. “They reflect a public system struggling to deliver quality services for all, and one that families with more resources are often able to supplement through private investments,” the article states.
Labor market conditions further compound these issues. Despite some individuals managing to build their human capital, few find jobs that match their skills. Between 2010 and 2018, only four out of ten new entrants into the workforce secured paid employment; most jobs remain informal and low-paid. Youth unemployment is high, with over a third of people aged 15-24 not engaged in education, employment, or training. Women’s participation in the labor force stands at just 29 percent.
The authors call for increased public investment in education, health, and social protection—especially targeting underserved communities—to close gaps in access and outcomes. “Closing the gap in access to quality services—especially for those who rely exclusively on public provision—must be a top priority,” they write.
Nepal will need an estimated 6.5 million new jobs over the next three decades simply to keep pace with its growing working-age population. The piece argues this will require long-term strategic investments both in people and systems as well as policy reforms designed to attract both domestic and foreign investment.
To improve youth employability, stronger connections between training programs and labor market needs are needed along with expanded reskilling opportunities and enhanced public-private partnerships. The authors stress that technical education, digital skills development, and lifelong learning should become central components of Nepal’s educational framework.
“The future of a Nepali child should not be determined by whether they are born in Karnali or Bagmati,” the article concludes. “Investing in people is not just the right thing to do; it is the smartest strategy for creating jobs, driving growth, and building a more inclusive economy where all young Nepalis can thrive.”
Sislen is the World Bank Division Director for Maldives, Nepal, and Sri Lanka.