Kathmandu, Apr.19: Minister for Finance Mahesh Acharya has said that the proposals concerning economic reforms, institutional and policy reforms of the state machinery, the development of private sector presented at the meeting of the Nepal Development Forum had been praised by the donor agencies and countries.

In a direct video press conference organised from Kathmandu by Nepal Economic Journalists Society with the technical cooperation of the World Bank after the conclusion of the Paris meeting, Finance Minister Acharya said that reforms would speed up the pace of development and help in facing the challenges of poverty alleviation.

He expressed the confidence that the Paris meeting would prove to be a milestone in accelerating the pace of economic development.

Referring to issues such as the need for Poverty Alleviation Fund, basic matters pertaining to law and order and human rights, decentralisation, prevention of corruption and good governance raised by the donor countries and agencies at the meeting, Mr Acharya said that the present government is extremely sensitive on development, law and order, human rights and other relevant issues.

Mr Acharya spoke of the need to commercialise agriculture and increase investment in the social sector in order to fulfill the basic needs of the people.

In response to a question, the Finance Minister made it clear that the present government is committed to toning up the administration and improving the election system.

World Bank’s country director for Nepal Hans Rothenbuhler said donor agencies and countries are closely watching how Nepal implements measures aimed to rectify the economy.

Nepal would not have to worry for aid if Nepal could build its institutional capacity while at the same time implement the policy reforms in a scientific manner, he noted. Meanwhile, Nepal’s development partners reaffirmed their resolve to assist Nepal in addressing the challenges 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 the current levels up to us $ 1,250 million.

The development partners emphasized that the levels of assistance will reflect progress in policy and institutional reforms and improvement in aid effectiveness.

This is stated in a press release issued by the World Bank after the conclusion of the two-day meeting of the Nepal Development Forum in Paris today.

Finance Minister Mahesh 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 the reviews.

The 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, he further said.

The development partners commended the serious commitment articulated by His Majesty’s Government to drive forward a comprehensive agenda of institutional and policy reforms.

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.

The forum also agreed that the policy thrusts and public expenditure allocations to support the government’s reform and poverty reduction agenda should be reflected in the next budget.

On the occasion, World Bank vice president Ms. Mieko Nishimizu commended the Nepalese government for having recognized so explicitly and openly all the hard issues.

The representatives of the Asian Development Bank, European Commission, International Agriculture Development Fund, International Monetary Fund, Kuwait Economic Development Fund, Organization for Economic Cooperation and Development, Saudi Development Fund, the Undp and World Bank and those from Australia, Canada, Denmark, Finland, Germany, France, Italy, Japan, the Netherlands, Norway, Switzerland, England and America had participated in the meeting. Rss

Earlier, Minister for Finance Mahesh Acharya, addressing the Nepal Development Forum meeting in Paris Tuesday, spoke at length on the various measures taken by the present Nepali Congress government for implementing a programme of economic reform, bringing corruption under control and eradicating poverty.

Mr Acharya said the government strongly feels that its reform process should focus on materialising the scope of a sound state for sustained growth and tangible progress in poverty reduction.

Minister for Finance Acharya said the ineffectiveness of the development efforts of the past was mainly the result of excluding ordinary people from the development mainstream.

Due to such exclusion, people did not feel that they are an essential ingredient of the development process. Our main efforts therefore, is to rejuvenate the process to make people the centre-piece of development endeavour. For this we have no choices other than to implement policy reforms with greater focus, priority and commitment, he said .

Stating that good governance is the collateral for both domestic and foreign investors as is good economic performance, he said as part of the civil service reform to enhance good governance, the government has already reduced the number of ministries.

The government has also decided to follow specified guidelines in making political appointments to the top positions of the public enterprises, he added.

The reforms undertaken during the early 1990s created, to some extent, an enabling environment for private sector development, he said. In fact, encouraging results in economic growth and microeconomics had then begun to surface. The momentum, however, could not be sustained due to the instability in government that infused differing development priorities, during the previous parliament’s tenure.

He said the government is now preparing a new package of second generation of reform measures in order to revitalise the earlier efforts and introduce further policy steps deemed necessary to achieve development goals.

The government is attempting to build consensus on major issues of development and national importance, he remarked adding, to this end, a cabinet committee is negotiating with opposition political parties and measures to address the development problem are also being discussed with major political parties.

Pointing out that implementation of liberal policies alone was not sufficient to bring desired changes in the economy, he said lack of leadership and ownership in development activities by the government and people of Nepal, lack of focus on use of resources, and less attention to important aspects like governance, corruption and institutional capacity were other reasons for poor economic performance in the past.

The budget formulation process needs to be overhauled, and the absorptive capacity of the public sector has always been weak, as reflected by the level of resource use each year, he added.

In order to address these issues, the government will announce a foreign aid policy shortly, he said adding that the policy while adressing the issues relating to utilisation of foreign aid will also help enhance returns on public investment.

Earlier, vice president of the World Bank South Asia Region Mieko Nishimizu said that the challenge the bank shares in partnership with Nepal is to reduce poverty substantially, in one generation or less, according to the Ministry of Finance.

The number of poor Nepali people has been increasing in recent years and social unrest has also grown, he said adding, these are signs that progress has not been fast enough, and more importantly, fruits of economic growth have not been distributed equitably.

Speaking at a banquet hosted in Paris earlier, Minister for Finance Acharya said the growing expectations of the people following the restoration of democracy could not be matched with government plans and policy due to a host of institutional and structural impediments.

There is a need for substantial changes in administration, extensive improvements in financial sectors and creation of a congenial atmosphere for the private sector he said.

Reform programmes of the government should be sustained in order to consolidate the consensus being developed among the political parties and growing people’s participation in developmental work, he further said.