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Land-based Investment along National Corridors in Nepal
Unlike the general principles of four major components of industries: land,
labour, capital and organization, the Weberian theory of industrial location explains
that firms and industries are located based on the locations of market, sources of raw
materials and sources of labour, and the interplay of the respective costs of transport
of raw materials, labour and finished product. A firm or industry would thus be
located in the source area of raw materials, labour, market or somewhere else where
the total cost would be the minimum. However, the concept of regional development,
which was a planning concept to development, introduced, elaborated and advocated
that economic growth (and development) can be induced with an investment in
selective propulsive industries in selected advantageous and dynamic cities, from
where growth would ‘trickle-down’ to the hinterlands of the city and the periphery of
the region. In a broader focus, the growth pole strategy took the role of the national
spatial policy and at the first step in implementing the strategy, beyond the
conventional politico-administrative divisions countries were divided into regions, a
second-level hierarchy from top and each region contained one major regional urban
centre representing a growth pole with several growth centres, along with major
national corridors of national highways. The theoretical base of ‘corridor’, which was
interchangeably used as ‘development axes’, was materialized as part of spatial
planning and one of the 11 typology of independent or complementary national
urban development strategies (NUDS) as presented by Richardson.
The complexity of the spatial development could not be addressed by the
implemented regional and subsequent spatial development policies and strategies
including the urbanization strategies. Particularly, to integrate periphery and central
as well as rural and urban regions, it was at the first instance necessary to establish
physical and functional linkages of places, people and activities through policy
intervention and would emerge from various critical linkages: physical,
technological, economic, economic services, support services, social services,
governance (political, administrative and organizational), and population. They are
the fundamental prerequisite and means of the broad-based regional and spatial
perspective to development. These linkages create necessary nodes, corridors,
networks, hierarches, and surfaces to materialize movement, flow and diffusion of
the elements of development to achieve tangible results and multiplier effects. This
node-corridor-network-hierarchy-surface spatial system is the thrust to the
movement-flow-diffusion-access system of the elements of development, including
investments in industries and their establishment in one of the wings of the spatial
system.
One of the four regions defined by Friedmann and Alonso is the development
axes, which “are enclosed corridors along principal transport routes linking two or
more metropolitan regions.” According to Richardson these development axes
corridors create mutually reinforcing cities along transportation corridors and
resulting to reduced transport costs, providing better connectivity and strengthening
inter-city linkages. In addition, according to Friedmann and Alonso “Their prospect
for development may be said to be roughly proportional to the size of the centres
they link and inversely proportional to some function of the distance separating
them.” though it requires high investment to develop major transportation corridors
throughout the country.
Nepal with the major objectives of reducing interregional disparities, integration
of the national economy and breaking the vicious circle of poverty followed the
regional approach to development since the Fourth Plan in 1971 after the completion
of three periodic plans and yet the country still trapped in underdevelopment, with
disintegrated national economy and regional economy in remoteness and isolation.
The country then divided into four development regions which were extended to five
in 1975. Each region incorporated the three longitudinal distinct physiographic
divisions of Nepal, i.e. (i) mountains zone in the north, (ii) hills and intermittent river
valleys zone in the middle, and (iii) plains in the south. In addition, given the
topographical features and the pattern of settlements, the prevailing population
movement and the need for integrating cross-sectional population along the
ecological zones, a north-south growth axis (development corridor) was designated
in each region linking the diverse zones, along with a “growth pole” located in the
middle hills, approximately at the geographic centre of each development regions.
According to Harka Gurung a number of “growth centres”, with at least one in each
ecological zone, were designated in “a series of north–south growth axes or
development corridors, linking diverse regions from the southern border to the
northern border of Nepal. The designation of these common development corridors
was expected to juxtapose a wide range of resources (the terai, hills and the
Himalayan mountains) and permit economic viability and generate greater interregional circulation of goods, services and people”.
In the above context of justification, this study with unorganized information and
limited secondary data will analyze the land factor for the investment along the
limited national corridors in Nepal. For reference, information and data would be
utilized from five corridors namely Biratnagar-Itahari corridor, Birgunj-Pathalaiya
corridor, Bhairahawa-Butwal corridor, and Nepalgunj-Kohalpur corridor along with
Hetauda-Bharatpur-Butwal extended corridor. These corridors except the HetaudaBharatpur-Butwal extended corridor fall under Vence Mercantile Model of urban
development, and the larger city developed as break-of-bulk-points along Indian
boarders and adjacent to the Indian rail-head, developed as the centers of import of
manufacturing and consumers goods and export of some primary products as well as
imported goods from elsewhere. The inner centres are the nodes along the national
trunk route of the Asian Highway No.2. However, the Hetauda-Bharatpur-Butwal
extended corridor falls entirely on the Asian Highway No.2 and this study has
considered this corridor as the prospective corridor of new economic establishment
with major investments of both domestic and foreign. These corridors house more
than the total 655 industries located in 11 industrial estates of Nepal.
In a state of neglected policy provisions for integrated human settlements system,
particularly urbanization and industrialization, this paper will discuss on the
background of the existing regional setting and the new federal structure of the
country the possibilities of new industrial estates, clustering of industries, location of
special economic zone, transport network, the India-China land-link concept and the
prospect of cross-border corridors in the wider context of large-scale land-based
investments. The demand for industrial land particularly large plots of land is
increasing for economic activities, but the government provision in providing land
for industries is not only conservative but also cumbersome process to acquire
private or public lands.
Unlike the cooperation corridors as one of the comprehensive national spatial
strategies in Japan; developing new regional growth poles corresponding to major
industrial centres and along national corridors outside the major metropolitan
regions in the Republic of Korea; designation of major economic corridors across the
country, key land transport corridors as one of the eight major spatial elements, and
port-hinterland corridors in Thailand; and the setting up of a National Industrial
Corridor Authority with an aim to coordinate the development of industrial corridors
with smart cities linked to transport connectivity in India, Nepal has not developed
any responsible land governance system with exclusive policy on national transport
and/or industrial corridors, nor the land use policy has explicitly provisioned lands
for economic activities along national transport and/or industrial corridors. Lands
along the said corridors are not only mostly privately owned, but also are basically
small plots and many of them as housing plots which further complicate to
acquisition process. There are other options for land acquisition, but the mismatch of
interest, preparedness and actions towards the provision of land among the
government agencies, investors and entrepreneurs, and the land owner would
unnecessarily delay the process if not jeopardize at the last moment. In addition,
when the establishment would be a foreign investment it may create further
complication, resulting to a state of uncertainty for the investor. The interest and
reaction of the local community is to be managed in advance as the past experiences
on land management are not so encouraging.
In the above context of discovery, the result of the analysis is expected to bring
out various facets of land-based investment in economic activities along the
established corridors as well as salient features of the overall land-based locational
insight of economic activities along the existing and prospective transport and
industrial corridors. As a task ahead, the paper will present a national corridor
development framework within the node-corridor-network-hierarchy-surface spatial
system of development.
Key words: corridor, industry, land, investment, regional, Nepal