Integrated Agriculture and Manufacturing Sectors for Speedy Growth

This chapter examines the issue of jobless and lower-than-expected economic growth in Nepal, which has averaged below four and a half percent over the past two decades. Despite the potential for faster growth, Nepal not only falls behind its neighbors, China and India, in terms of economic growth but also faces the problem of youth flight due to a lack of industrial diversification and significant reliance on agriculture. Agriculture employs a large portion of the population but contributes less to the GDP, while the manufacturing sector remains underdeveloped. This chapter discusses the importance of adopting an integrated approach that combines agriculture with manufacturing to address slow jobless growth. For this purpose, the ARDL approach of cointegration is employed after the examination of the time-series properties of the data from 1990 to 2023. The results suggest that by leveraging agricultural resources and pairing them with manufacturing, Nepal can generate more job opportunities, enhance productivity, and stimulate economic activities to enhance economic growth as in the cases of the countries like Indonesia, Thailand, and Vietnam, which have shown positive impacts on job creation and economic growth through agrarian transformation and agro-industrial integration.