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Development Partners Endorse Nepal's Comprehensive Reform Agenda; Reaffirm Support for Poverty Reduction
Nepal's international development partners met with representatives of His Majesty's Government in Paris April 18-19, 2000 to discuss Nepal's reform agenda and plans for renewed efforts to reduce widespread and severe poverty in Nepal. The Nepal delegation to the Development Forum was led by Minister for Finance Mr. Mahesh Acharya. Ms. Mieko Nishimizu, World Bank Vice President for South Asia, chaired the Forum which was attended by delegations from twenty three countries and international organizations .
The development partners commended the serious commitment articulated by His Majesty's Government, in the preparation of and at the Forum, to drive forward a comprehensive agenda of institutional and policy reforms. The government's reform agenda, tabled for discussion at the meetings, outlines priority actions in the areas of macro-economic stability, civil service reform, anti-corruption initiatives, decentralization, financial sector reform and private sector development, aid effectiveness and the role of civil society in national development.
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Sharing the government's sense of urgency, the development partners advised that the actions envisaged in the government's reform agenda would call for enduring political will, building broad consensus and deeper partnerships with civil society and the private sector to sharpen the focus on poverty reduction. Nepal's development partners congratulated His Majesty's Government for leading an innovative process to identify the key constraints to Nepal's development agenda through interactions with civil society in Kathmandu, preparatory to the Nepal Development Forum 2000. They suggested that His Majesty's Government build upon the lessons of this exercise in implementing the reform agenda.
"I must admit it frankly that I was a little hesitant and there was some degree of uncertainty in my mind on the way to Paris," said Minister Acharya in his concluding address. "I thought perhaps our growing challenges and enormity of tasks which has engulfed our partners that they might not come out of their shell of frustration. But you have proved me wrong. I question myself as to what I would have done had you remained hesitant in supporting my Reform Agenda. An answer always kept coming from my heart - I would have marched ahead on this reform path alone because this is our Agenda of Reform - an agenda of my people and my country. This Reform Agenda is not designed to muster donor support in the first place, it is fundamentally designed to drastically improve our institutions, change the quality of life of our people and enhance human dignity."
"I want to commend the government for having recognized so explicitly and openly all the hard issues. It takes integrity and courage to come out of the darkness of a denial mode, and to acknowledge politically difficult issues frankly," said Ms. Nishimizu. "It is the first critical step in capturing the moment and seizing the right footing for a better future - for then and only then one discovers an increasing circle of like-minded change agents, and gives voice to the silent majority of the poor and marginalized people," she said.
It was noted that Nepal's socio-economic indicators remained at very low levels (as reflected in the documentation prepared for the Forum), despite all past development efforts. Nepal's development partners stressed the need for realism and prioritization and added that effective implementation would be the true test of the government's reform agenda. The development partners agreed to the government's proposal that the primary focus of the reform agenda would call for bold and decisive actions on a range of key institutional areas to ensure good governance and anti-corruption action.
The Development Forum agreed that Nepal could do much better in improving revenue and public expenditure management, as well as the effective use of development assistance, and ensuring that economic growth is broad-based and equitably distributed. The Forum agreed that the policy thrusts and public expenditure allocations to support the government's reform and poverty reduction agenda should be reflected in the forthcoming budget.
His Majesty's Government also outlined its plans to design an enhanced poverty reduction strategy for Nepal and to establish a Poverty Alleviation Fund as a mechanism to expand grassroots-led development activities and to fund special targeted development outreach in the remote areas. The development partners emphasized the link between peace and development, and the government recognized the need for respect of human rights in assuring security as a basis for effective poverty reduction efforts.
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The Forum agreed that redesigning the government's poverty reduction strategy would call for a serious assessment of past failures to achieve poverty reduction targets (including limited success in slowing down population growth), wide consultations at the grassroots, and closer linkages between development and social inclusion, as well as a review of the institutional aspects. The Forum also agreed that the government should take full ownership of Nepal's development agenda. They must lead, proactively, a transparent and participatory process of realigning development resources, including foreign assistance, more sharply with Nepal's poverty reduction priorities, in a framework of closer cooperation with the development partners.
Nepal's development partners reaffirmed their resolve to assist the people of Nepal in addressing the challenge of poverty reduction and economic growth, in line with performance on accelerated policy and institutional reforms. The level of assistance in 2000-2001 will range from current levels up to US $ 1,250 million. The development partners emphasized that actual levels of assistance will reflect progress in policy and institutional reforms, improvements in aid effectiveness, and they noted that aid levels could even be higher if the pace of reforms is accelerated. Minister Acharya informed the Development Forum that the government would establish a mechanism to regularly monitor progress and outcomes on the reform and poverty reduction agenda and invite the development partners to share the findings of these reviews.
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There was general agreement that the intensive dialogue between His Majesty's Government and the development partners in preparation of the Forum should continue, including regular meetings of the Nepal Development Forum. His Majesty's Government expressed the wish that the next NDF be held in Kathmandu.
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* Attending the Nepal Development Forum 2000 were representatives of the Governments of Australia, Canada, Denmark, Finland, France, Germany, Italy, Japan, the Netherlands, Norway, Switzerland, the United Kingdom and the United States. Also represented were the Asian Development Bank, the European Commission, the International Fund for Agriculture Development, the International Monetary Fund, the Kuwait Fund for Economic Development, the Organization for Economic Cooperation and Development, the Saudi Fund for Development, the United Nations Development Programme and the World Bank.
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