Kathmandu, April 28:

Dr Sultan Hafeez Rahman, country director of Asian Development Bank-Nepal Resident Mission (ADB-NRM) expressed his pleasure over the the recent political developments here and also hinted at increasing aid to Nepal if the new government placed its priorities on socio-economic development of the nation.

Dr Rahman, while talking to this daily, commented that the forthcoming government has to inform donors about its development priorities, following which international donors can take a coordinative approach. What is crucial is that the government has to work out ‘plans and programmes’ to address the root causes of poverty, said Dr Rahman. He suggested that the government needed to address effectively the issues of social inclusion and lack of good governance, which are underlying causes of conflict. Recent political developments will ultimately bring more opportunities. However, there are difficult challenges as well, said Dr Rahman adding that economic recovery will start picking up in a short period as the confidence level of people here has increased.

Talking about the tremendous potential Nepal has, Dr Rahman said, “There is a need to expand development activities and take reform measures. Immediately, the service sector and the tourism sector will see better days in days to come. “The hardest hit, the manufacturing sector, can now grow at a faster pace as their unused capacity will be fully utilised for better productivity.”

The private sector, he added, needs an enabling environment, as it is the real engine of growth. Dr Rahman hoped that the development expenditure would increase in days to come. If the ceasefire is to hold, Nepal can get back to normalcy in the economic sector.

He said that ADB is waiting for the government which has the job of articulating development priorities. “I hope donors’ group will respond positively,” he added.

ADB had already approved $110 million per year for 2004 to 2007 on a yearly basis through its Country Strategy Paper (CSP). ADB will not lag behind in joining donors’ group to increase aid to Nepal. However, the government has to clearly spell out its programmes and priorities, focusing on poverty reduction strategy, said Dr Rahman.

He said that peace is critical for a strong and sustained economic performance. He expressed confidence that Nepal can register even a seven per cent economic growth at par with other South Asian countries in about three years’ time, provided the security situation in the country remains stable.