Foreign investors might lose confidence on Nepal due to World Bank's relocation of country director

At a time when the country is in dire need of foreign investment, the relocation of World Bank country representative might further erode confidence of foreign investors, and of course bilateral donors.
“The relocation might send a wrong signal to the foreign investors and bilateral donors as the presence of multilateral agencies like World Bank, Asian Development Bank and International Monetary Fund will boost their confidence on Nepal,” said former finance secretary Rameshwor Prasad Khanal.
After four decades of its diplomatic partnership with Nepal, the World Bank has decided to relocate its country representative to Dhaka to reduce cost of operation, though the current office would still be functional in Kathmandu.
The incumbent World Bank country representative Susan Goldmark is completing her term on June 30 and after her departure, the Nepal office will have no country representative.
Earlier, International Monetary Fund has also shifted its office to New Delhi.
“The investors might not feel comfortable in absence of ‘strong’ presence of multilateral agency like World Bank in the country and that too in the transition phase,” he said, adding that the bilateral donors might also shift their strategy to off budgetary aid than on budgetary aid.
“They might seek alternative mechanism by channelling their aid through I/NGOs or UN systems instead of through government as psychologically they will loose confidence on government agencies.”
However, the relocation of senior staff will not hit the World Bank aid to Nepal. “Its financing to Nepal is not dependent on what level of management is heading Bank’s Nepal office,” Khanal, who has a long experience of working with multilateral donors said, “aid volume goes up or down on the basis of Nepal’s development policy, performance and economic management. The World Bank does Country Policy and Institutions Assessment (CPIA) every year and the score Nepal gets on this drives the level of World Bank aid.”
Similarly, the key role of World Bank that is to regularly advise Nepal either voluntarily or when sought, will also continue, according to the World Bank Kathmandu office sources.
The multilateral agency except also offers technical advises apart from the financial aid. “It has a pool of best economists in the world and they are involved in policy research to support governments continuously.
“However, there will be no difference in its advisory role, too,” Khanal said.
“A country director in Dhaka will be looking after Nepal,” according to the World Bank. “After the relocation of country representatives, there will be only four country representatives in the eight nations of South Asia.”
Currently, a country representative of Pakistan looks after Afghanistan and a country representative of Sri Lanka looks after Maldives, whereas there is country representative in India. The World Bank head office in washington looks after Bhutan directly.