Kathmandu, June 2: The eagerness of the Danish government to increase its development assistance to Nepal has been witnessing a set back as Nepal has not been able to utilise fully the assistance already disbursed.

“Nepal has been able to utilise only 80 per cent of the US $ 25 million being provided annually,” Lars Faaborg-Andersen from the Danish Ministry of Foreign Affairs told a press conference at the Danish Embassy today.

He said that the number of staff vacancies yet to be filled at the Ministry of Population and Environment and the Finance Ministry along with the frequent politically motivated transfer of staff were factors that had been slowing down project delivery in the targeted areas of co-operation.

Andersen, who is the Deputy head of Asia Department held annual consultations on bilateral development co-operation between Nepal and Denmark on June 1, 2000.

The bilateral consultations confirmed that Denmark is willing to contribute approximately 795 million Danish kroner (equivalent to 7.298 billion rupees) for the next five years.

Technical assistance through long-term Danish advisers, training, fellowships as well as support through mixed credits, the private sector development programme and Danish NGOs in Nepal are over and above this bilateral agreement.

The Nepalese delegation participating in the consultations was headed by Dr. Bimal Prasad Koirala, Special Secretary, Ministry of Finance while the Danish delegation was represented by Mr. Andersen and permanent Danish envoy to Nepal Mr. Lars Hormann and senior officials from both sides.

The consultations centered around co-operation to reduce poverty, achieve economic growth, administrative reform and a sound macro-economic policy.

The Danish assistance to Nepal is focussed in four main areas: Basic and Primary Education, Energy, Natural Resource Management and Environment.

The cross cutting issue of gender, environment, and democracy and human rights are integral in all development activities. In accordance with the agreed strategy for Danish-Nepalese development co-operation, support to good governance and decentralisation is also a major theme in the co-operation programme.

Dwelling on the positive steps taken by the government of Nepal, Andersen said that Finance Minister Mahesh Acharya informed the House of Representatives about expediting civil service reforms as agreed during his participation in the city meeting of the donor countries in Paris.

“The recent pay hike announced by the government of Nepal will hopefully help in combating corruption and initiating steps for civil service reforms,” Andersen said.

He said that the salary hike was only one step forward towards civil service reforms, which needs to be followed by better management practices and implementation of the Decentralisation Act.

Andersen said that the government had also taken a bold step to expand revenue mobilisation to 30 per cent from the existing 10 per cent, which is a bold step to increase domestic resource mobilisation.

Mr. Lars Hormann, permanent Danish envoy to Nepal said that impact of the Danish Assistance in areas of community forest and improvement of environment had been very glaring.

Nearly two million people have benefited through the community forestry programmes and the Basic and Primary Education Project has benefitted a large cross section of the society, Hormann said.

He said that the Maoist insurgency had been disrupting development projects in 13 VDCs.

“The root cause of the Maoist problem lies in the social situation and deprivation, the government would find it easier to resolve the problem by directing its efforts in eliminating frustration and engaging in peaceful negotiations,” Hormann suggested.

He said that the Danish Embassy was disturbed to learn that the government had decided to ban new registration of the electrically operated SAFA tempos.

The Danish government has earmarked 300 M rupees for the improvement of the environment of the valley and this assistance has prioritised the manufacture and introduction of SAFA tempos.

“If the government does not withdraw its decision to ban the registration of SAFA tempos then we will be forced to think over the assistance set aside for the improvement of the valley environment,” Hormann said.

Nepal is one of the 20 priority countries for Danish Development Assistance. By a decision of Parliament, the size of Danish Development assistance is kept at the level of one per cent of the Gross National Product (GNP) which makes Denmark with only five million citizens the ninth biggest donor in the world. And compared to GNP Denmark is by far the world’s largest donor country.