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Submitted by Dhiraj Sharma on

Dear Aurelien and Chandan, thanks for this interesting piece. To me, the answer is improvement in investment climate. As Lucas observed years ago, capital from rich countries does not chase high returns in poor countries partly because of political risk. But here, capital is flowing from high and middle income countries to poor countries, only we call it remittance. That it is fueling import of consumption durables and creating bubbles as it seeks safe parking spot is undeniable but it does not have to be so. Given right incentives and legal protections for investment, there is no reason why the capital won't bite. We have an example of it in Nepal already: the Kathmandu to Hetauda tunnel project financed under "people, private, and public partnership (4P)" arrangement.