Until about 1997, the relationship between Nepal and the World Bank was very 'traditional.'Lending seemed to be the central concern on both sides. This relationship changed significantly with the 1998 CAS, which placed poor governance at the center of the strategy and linked the lending level firmly to credible progress on the overall quality of governance. As a result, for four fiscal years (FY09-02), the
Nepal program was put under a 'low case' scenario, and the lending volume fell to
US$95 million for the four years, as compared to about US$100 million per year that the International Development Association (IDA) had committed in the period immediately preceding this tightening. In the meantime, maintaining that Nepal was in a base case and claiming that the governance situation was no worse than other countries in the region, the Asian Development Bank (ADB) continued to maintain strong lending, overshadowing the Bank with annual lending of about US$l 00 million. This reduced the fiscal pressure that Nepal might have felt from the lending reduction by the Bank, and may also have led to some distancing from the Bank on the part of the government.
By 2001, however, the government began to feel renewed fiscal pressures from the escalation of the Maoist conflict and the stagnation of the economy. The conflict has also raised serious concerns among some technocratic leaders about the failure
of development. This has led to an emergence of several reform leaders at the civil service level and increasingly strong bonds were formed between them and the Bank team. The reformers have in fact appreciated the disciplined lending stance the Bank had taken and began to use our position to push back the political resistance to reforms. The Bank team's relationships with the National Planning Commission (NPC), Ministry of Finance (MOF), Ministry of Education and Sports (MOES), and some other key departments have been exceptionally strong. (In this regard, significant continuity
of personnel in the positions of the NPC Vice Chairman and Finance Secretary between
2001 and 2006 was very helpful.) Given the instability at the political level, more
stable and strong ties at the technical level has been critical in giving some key reforms the much needed continuity. By now, it is widely accepted that the Bank takes tough positions on key policy issues, but only because of its genuine concerns for long-term development of Nepal. Technocratic reform leaders see us as real partners.
#WorldBank #Nepal #Relations #2007
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Publisher:
World Bank
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(2007
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Type / Script:
Publication
in English
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Keywords:
BANKING LAW, BANKING SYSTEMS, BANKS, FINANCIAL STATISTICS, BANKING, INTERNATIONAL FINANCE, PERSONAL FINANCE, PUBLIC FINANCE, BUDGETARY POLICY, CREDIT POLICY,
FISCAL POLICY, MONETARY POLICY, EDUCATIONAL FINANCING,PUBLIC ADMINISTRATION,
TAX LAW, PUBLIC LAW, NATIONAL BUDGETS
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Thematic Group:
WB
:
World Bank
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Thesaurus:
02.11.00
- Banking And Investment
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Reference Link:
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