Small and Successful
Poor productivity continues to hobble the Nepalese economy in spite of three decades of experimenting with a variety of development strategies. During this period, the country's national output has risen an average of 2 percent annually, the lowest in South Asia, and even today, the industry (including construction) accounts for a mere 13 percent of the GNP. No doubt that the country's disadvantageous terrain and poor resource base are largely to blame, but it is also true that a lot of good money has been wasted on unfeasible aid projects that petered out about the same time as the donor's money did.
A bright exception is the GTZ-spon-sored Small Business Promotion Project (SBPP), founded in 1983 as an outgrowth of the Bhaktapur Development Project (HIMAL, May 1987). In six years, the SBPP has exceeded virtually every one of its output targets, and established itself as Nepal's foremost business promotion center. In doing so, it has demonstrated the vibrance of small business as a sector of national development which might serve as a model for how aid can be channelled more productively.