National 5 (Spotlight Weekly)

WORLD BANK’S CAS
Sign of Progress

World Bank’s Country Assistance Strategy for Nepal (CAS/N) discloses certain progresses in Nepalese economy

By A CORRESPONDENT

Despite the ongoing Maoist insurgency and political instability, Nepal has made certain progress in the economic sector as well as in the areas of poverty reduction.

The Country Assistance Strategy for Nepal (2004-2007) gives Nepal credit for carrying out the reform programs providing cautious hope for the future of Nepalese economy.

Self-employed woman : Support for poverty alleviation

“The challenges Nepal faces in taking the reform process forward are formidable. The cost of a failure, however, is nothing short of widespread internal conflict, likely resulting in the breakdown of the development process. The current reform leaders are very conscious of the risks and the high stakes. In essence, implementing reforms with more speed and vigor is their strategy to reduce the risk of reversal, and ultimately achieve peace and poverty reduction,” states the report.

Published in 1998, the last Country Assistance Strategy for Nepal identified poor governance as the fundamental constraint restricting Nepal’s development.

“As reported in the CAS Progress Report of November 2002, despite this instability and uncertainty – or perhaps because of it –over the last two years, Nepal has begun implementing an impressive and far-reaching reform program. Notable progress has been made in financial sector reform, public expenditures management, changes in public service delivery modalities, the fight against corruption and the infrastructure regulatory environment,” disclosed the report.

Despite so many positive aspects in the report, it also expresses the concern over successful implementation of the program in future and achieving the poverty reduction targets. The report stresses the need to resolve the present insurgency and achieve political stability.

“If Nepal continues to face the insurgency and political instability, it will be very difficult to achieve the growth target,” said Ken Ohashi, World Bank Country Director for Nepal.

From financial sector reforms to poverty reductions, the country has shown serious concern. In the National Development Forum Meeting in 2001, all the political parties have expressed the need to improve the governance and other areas. Thanks to the commitment, then elected government had introduced two separate anti-corruption bills in the parliament. The government also took several key issues in the areas of financial reform.

Following the dismissal of the elected Deuba government, the new government appointed by King has also carried forward many other reform initiatives including in the areas of privatization. “The deepening crisis, however, has also created the space for the reform minded political and technocratic leaders to begin a renewed drive to build an economic and social foundation for sustained peace and poverty reduction,” added the report.

‘If we want to have sustainable economic growth, we must continue to follow the economic reform programs,” said finance minister Dr. Prakash Chandra Lohani.” This government will continue to pursue the economic reform and poverty reduction program.”

Although there are still many hindrances in implementing the poverty reduction strategy in rural parts of the country since the Maoist insurgency has escalated into the rural hinterland, the government is taking different courses to reach the rural population.

“We will implement effective target oriented programs to reach the rural population. National Planning Commission has already prepared different strategies,” said vice chairman of National Planning Commission Dr. Shankar Prasad Sharma.

From social exclusion to gender discrimination and other civil service reforms, there are many other areas that need to be tackled. “We have taken many steps to improve the performance of civil service and accommodate the population for social inclusion,” said chief secretary Dr. Bimal Prasad Koirala.

However, in absence of democratically elected government accountable to the people, there are always problems in implementing programs and projects targeting the large number of population.