Finance Minister Dr. Ram Sharan Mahat has urged the donor community to provide budgetary support to meet the immediate liquidity crisis.

Addressing a meeting with donors at the Finance Ministry at Singha Durbar Wednesday afternoon, the minister urged Nepal’s bilateral and multilateral donors to revive projects either terminated or downsized in the past citing security reasons. He also sought support from the donor community to launch relief and rehabilitation of conflict victims and for their reintegration in the society.

Dr. Mahat said a new investment package would be needed with emphasis on public works and implement infrastructure and income-generating projects.

The Finance Minister said the principal agenda for the Seven Party Alliance (SPA) government was political—that is to find a complete solution to the decade-long conflict, among others. He, however, said the economic agenda was equally important.

Dr. Mahat said the country was on the verge of facing serious economic crisis. Referring to the White Paper presented by him before the House of Representatives on Monday, the minister said in the past four years, security related expenditures were systematically raised, which had now exceeded 3.4 percent of the Gross Domestic Product (GDP). This is very high level for a country having annual revenues around 13 percent of GDP. Most of the liabilities created in this front have long-term implications, he added.

Dr. Mahat said this year the revenue shortfall could be around Rs eight billion. He said the only positive sign in the economy was the rise in remittance inflow. Trade deficit has increased by over 37 percent in the first eight months of this fiscal year compared to the same period of the preceding year.

The Nepali Congress lawmaker warned that democracy and peace might be at risk again in people saw that nothing was happening on the development side. He urged Nepal’s development partners to come forward generously in supporting the government’s peace, development and development endeavours.

Members of the donor community assured of their continued help to Nepal but asked the government to set its priorities first. They said they were ready to help Nepal based in its performance towards economic reforms and restoring peace in the country.