Bolster fiscal, financial capacity of local govts: Goldstein

KATHMANDU, Sept 25: As local governments are best placed institutions to deliver services according to local needs and preferences, countries in South Asia must bolster fiscal and financial capacities of local bodies in order to enable them fulfill their responsibilities effectively, said Ellen Goldstein, the World Bank´s country director for Nepal and Bangladesh.



Goldstein was speaking at a three-day program on Strengthening Local Government Finances for Better Service Delivery and Greater Accountability that kicked off in Kathmandu on Tuesday. The program is being organized jointly by the Swiss Development Cooperation (SDC) and the World Bank with a motive to share cross-country experiences in reform processes at the local, state and federal levels with regard to local finances and good practices and instruments.[break]



More than 80 policy makers and local finance practitioners from central, state and local governments across various Asian countries are participating in the program, according to a press statement issued by the World Bank.



Goldstein highlighted three challenges in bolstering the financial capacity of local governments. “First is inter-governmental fiscal frameworks need reform, so that functional responsibilities are clearly defined and funded and fiscal transfers are received in adequate amounts and on time,” she stated.



Secondly, local governments need to mobilize new resources and increase their capacity to borrow responsibly for investments in local services, said Goldstein, adding that local governments, finally, need to seek ways of attracting private participation in the financing and delivery of local public services.



Goldstein also highlighted the World Bank´s support for local governance programs across South Asia, including Emerging Towns Project in Nepal, under which the Bank has been supporting intergovernmental frameworks and strengthening infrastructure and services in small and medium sized municipalities.



“To exercise autonomy, local governments need to generate their own revenues through taxes, fees, user charges and other forms of cost recovery and borrowings,” the statement quoted Goldstein as saying.



Goldstein said two key challenges confronting South Asia with regard to local finances are the dominance of central transfers and low capacity to generate revenues at the local level.

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