Delay in budget to affect development assistance

Delay in budget might affect assistance of the donor agencies hurting the development activities.
"If the current impasse continues, it will hit the development activities in the long-run," said Sultan Hafeez Rahman, director general, South Asian Department at the Asian Development Bank (ADB) talking to the journalists here today.
"The delay will not only slow down development activities, new projects could also not formed," he said, adding that this is not the situation that will help the country to go forward.
Though, ADB -- that contrbutes to around $270 million to $300 million to Nepal makin it one of the largest donors -- has not yet figured out the magnitude of serious consequencies, it is hopeful that "the leaders will understand the urgency. Nepal has no luxury of time, and everyday lost is a loss of livelyhood of people and economy."
At a time, when ADB has doubled the assistance, the government has not been able to bring budget that can propel the development activities.
However, Rahman is still hopeful that the economy can take off. "Despite uncertainties economic activities have been continuing after the Comprehensive Peace Accord in 2006," he said, adding that Nepal didnot face recession and the growth rate has been hovering around three to four per cent that is satisfactory. He, though, termed the growth as a 'conflict-rate of growth'.
"Agriculture and construction will continue to do well," he said, adding that manufacturing and energy sectors have been however sluggish. "Exports needs to be revived and macroeconomic situation has to be managed well."
He blamed the manetary expansion in last few years for escalating inflation. "However, it is not overly alaming," Rahman -- who used to head ADB Resident Mission in Nepal during 2003-2006 -- said, "Lack of monetary discipline is the cause of inflation."
The condusive political climate and good macro-economic management can fix these problems, he observed.
The ADB is also planning to help Nepal improve mobility to make the economy more competitive and easy movement of goods and services. "North-South connectivity can help increase the movement by bridging the gap between produces and market," he added.
"The international community has a tremendous good-will for Nepal," he said appreciating the peace process that has been going on despite difficulties. "The ADB will continue to work closely with Nepal and its stakeholders in helping to reduce poverty and promote inclusive growth."
ADB's commitment to assist Nepal is line with its Country Partnership Strategy 2010-2012 for Nepal that is anchored in the four pillers of broad-based inclusive growth, social development, governance and capacity building, and climate change.
Rahman is on Nepal visit from October 27 and is consulting the government agencies and development partners.