Reform process getting slow: Ohashi

March 25, 2006
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Country director of the World Bank for Nepal Ken Ohashi has said that the reform process is getting slow, due to various reasons including political instability and intensified conflict.

Speaking at a talk programme on ‘Political Economy of Reforms’, jointly organised by Management Association of Nepal-Management Development Centre (MAN-MDC) and The World Bank, in the Capital on Friday, Ohashi said, “The bank is concerned about the country’s low growth rate and has made a slight shift towards growth agenda.”

“Though reforms in the medium term expenditure framework (MTEF) through pro-poor spending has risen from 28 per cent in 2003 to 31 per cent in 2005 and 34 per cent in 2006, there are some negative developments such as dissolution of elected local bodies (2002), dissolution of the parliament (2002), intensification of the conflict, February 1 move, control of press freedom, slowing of reforms in 2004-05, tendency for central control and lack of focus on the development agenda after February 1,” he added.

He further said that WB may lend about $100 million every year starting from 2006 to 2008, which is likely to be linked with reforms in sectors like higher education, poverty alleviation, irrigation, agriculture, HIV/ AIDS, community electrification, infrastructure and social sector operation.

Dr Bimal Koirala, former chief secretary and chief of MAN-MDC, presenting a paper on the political economy of reforms discussed about reforms before 1985 and after.

He said that the state has failed to build infrastructure which has become a big burden for national treasury.

Dr Koirala also said that politics of uncertainty has gripped the country since the elected local bodies and parliament were suspended in 2002. “It not only hindered reforms, but also arrested development,” said he.

He stressed for negotiated settlement of conflict in order to attain harmonious balance among peace, democracy and development.

Talking about the slow reform in the two largest banks of the country, Koirala said, the government has failed to clarify with whom it stands – thousand of depositors or a handful of defaulters when talking about reforms in the largest banks – Nepal Bank Ltd (NBL) and Rastriya Banijya Bank (RBB).

Dr Shankar Sharma, vice chairman of National Planning Commission and Madhukar SJB Rana, former Finance Minister also shared views at the program.