December 17, 2001

KATHMANDU: For the first time after slapping an emergency to clamp down on a bloody six year communist insurgency, Prime Minister Sher Bahadur Deuba met donors and representatives of multi-lateral agencies to ask for additional funds to maintain Nepal’s development programmes.

The government is feeling a financial crunch to meet additional financial demands for a military operation to quell the rebellion that has claimed more than 2,200 lives. PM Deuba, who is also Foreign Minister, summoned the Kathmandu based representatives to the Foreign Ministry while asking for additional financial assistance, Nepali diplomats said.

The response was positive, a Nepali source said. Government faced a dilemma whether to divert funds earmarked for development for administrative purposes to finance operations against rebels after the breakdown of peace talks with Maoists on November 23.

Deuba told donors the government has adopted austerity measures to curt government expenditure. “Declaring the emergency was a difficult decision which was unavoidable after Maoists broke off peace talks unilaterally,” Deuba told the donors.