Strengthen implementation

It is good that the World Bank, Nepal’s principal donor, has come up with a new Country Strategy Note (CSN) for the next two years, with a pledge to provide assistance of $400 million. But it is bad that both the government and donor agencies seem to have paid little attention to improving Nepal’s stomach-lurching weak implementation capacity.



For years donors have been saying that resources are never a problem for a least developed country like Nepal; rather, it’s the inability to execute agreed development projects that constitutes the stumbling block in extending new development assistance.



At the last two meetings of the Nepal Development Forum, held in Nepal in 2002 and 2004, the donor community strongly urged Nepal to improve its implementation capacity, and successive governments for their part left no stone unturned to assure donors that they were serious about the issue. There were also some concrete responses, with the government introducing many policy changes to quicken the implementation of development projects. Yet, even after years of effort, we believe that the extent of the problem remains more or less the same, though there has been some improvement in foreign aid disbursement.



Arguably, a greater share of the blame goes to the country’s unexpectedly prolonged political transition that, in fact, has derailed much of the reform agenda, a good part of which was successful in producing wonderful results, be it in expanding financial services or in trimming public expenditure.



However, a messy politics focused on grasping for power rather than completing the peace process and writing a constitution has relegated the development agenda to the back burner. Though the country was able to achieve impressive development in the social sector, the CSN has correctly underlined the fact that political transition and attainment of peace have eclipsed the economic issues. As a result, the overall performance of the non-agriculture sector has been pessimistic for years. GDP growth flattened to 3.5 percent last year.



We think we have learnt a lot about development, but with little concurrent effort to improve the implantation capacity of government institutions. This newspaper has questioned many times the poor performance of development-related ministries such as the Ministry of Physical Planning and Works and the Ministry of Local Development, which absorb roughly two-thirds of the development budget. This is one of the major reasons for Nepal’s continuing underdevelopment. There is no record of these ministries ever spending the entire budget allocated to them.



Against this background, we urged both the government and donor agencies to focus on enhancing Nepal’s implementation capacity by introducing a wide range of reforms in the way we do development. As we said earlier, it is not the amount of assistance but its translation into action that will really contribute to building a peaceful, prosperous and just Nepal.

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