Jan 16, 2017

Local Donors Meeting - a mechanism for regular dialogue between development partners and the government – was held at the Ministry of Finance on 21 May 2014.

Local Donors Meeting - a mechanism for regular dialogue between development partners and the government – was held at the Ministry of Finance on 21 May 2014. This was the first meeting of this kind after Finance Minister Hon. Dr. Ram Sharan Mahat assumed his Offi ce. The meeting also served as a prebudget consultation with development partners. The meeting was kicked off with welcome remarks by Joint Secretary Mr. Madhu Kumar Marasini followed by opening address by Hon. Finance Minister Dr. Mahat, presentation by Finance Secretary Mr. Yubaraj Bhusal on current economic scenario and status of budget preparation, remarks by Dr. Yubaraj Khatiwada, Governor, Nepal Rastra Bank and Hon. Vice Chairman of Nationla Planning Commission Dr. Govinda Pokhrel.

Delivering his remarks, Hon. Finance Minister gave a snapshot of the current macroeconomic situation, which portrayed a combination of economic challenges and strengths. Strengths as Hon. Minister rticulated were around positive scenario in terms of economic growth, infl ation, surplus in balance of payment and foreign exchange reserves. Despite these strengths, Hon. Minister enunciated he challenge of achieving higher growth rate at around 8 percent per annum, particularly in the face of Nepal’s determination to graduate from the status of Least Developed Country by the year 2022. According to him, this was further aggravated by other challenges, such as, low investment, high liquidity, slower implementation of the rojects, trade defi cit, high cost of capital formation, low capital spending and high recurrent spending.

Hon. Minister expressed happiness over the results that Nepal has already achieved in social indicators such as in longevity, average literacy, maternal mortality and infant mortality, among thers. Observing infrastructure gap and policy barriers as major bottlenecks to growth, Nepal’s policy and priority for the next year would focus on attracting investment to accelerate economic growth, particularly through investment in physical infrastructure development. Sectors like hydropower development including construction of transmission lines, expansion of road connectivity, improving rural infrastructure, agriculture development, and tourism sector would be priority sectors. Hon. Minister also stressed on social sectors including education, health, drinking water, and human development as being the foundations of democracy. Hon. Minister also highlighted on the need of a transparent and tangible cooperation that helps build a self-sustaining fi nancial and institutional base to meet ever increasing demand of eNepal’s development fi nancing. New policies and programs will be focused on creating an environment conducive to welcoming more investments, including attracting FDI.

Finance Secretary Mr. Yubaraj Bhusal, during his presentation, elaborated on the current strengths and challenges facing Nepal. He communicated to the development partners the tentative framework of major priorities, policies and programs that the government was preparing. Dr. Yubaraj Khatiwada, Governor, Nepal Rastra Bank informed about fi scal space, monetary space and fi nancial space supported by increasing revenue, comfortable reserves and fi nancial position, respectively. Comments and suggestions from development partners revolved around inclusion agenda, human capital, peace process, implementation challenges, need of long term development strategy, reform agenda, partnering with private sector, need to convene the meeting of Nepal Development Forum (NDF) and process of drafting new Development Cooperation Policy as well as some inherent issues.

Hon. Finance Minister while responding to the comments and suggestions from the development partners expressed his commitment to convene the meeting of NDF in 2015. He assured that the government was open for strategic dialogue for development issues. Clarifying some provisions in the draft development cooperation policy, Hon. Minister emphasized on transparent, responsible and accountable aid that the draft policy intended for. He further highlighted the need to reach mutual consensus on the use of technical assistance and international expertise could be rationalized.