ADB adopts wait, watch policy

Kathmandu, November 27:

The historic transition that is taking place in Nepal is more than welcome by the donor community and the Asian Development Bank (ADB) in particular. But the transition is going to be a challenging one in terms of implementation of the ongoing projects and the implications of the reform action taken by the interim government.

This was echoed by the Asian Development Bank’s (ADB) deputy director general for South Asia, Dr Sultan Hafeez Rahman, speaking to the press in Kathmandu today.

The Manila-based ADB official is here on a four-day long visit to discuss the rehabilitation and reconstruction process in Nepal.

While Rahman expressed his happiness on behalf of the bank on the recent developments in the country and outlined support for reconstruction process, he maintained that a lot would depend on the performance and intent of the government itself.

“We will wait for the interim plan to be prepared by the government, see how they fix their priorities and deliver on them, only then we will make an assessment of the cost of reconstruction,” said Rahman.

If ADB was not satisfied with the level of comfort with the new government, it might be forced to review its plan, said Rahman candidly.

The ADB, he said, has already approved a very large programme of assistance for Nepal amounting to $170 million for 2006.

While monetary support in 2004 had been worth $120 million, it was practically withdrawn in 2005 taking into account the situation of the country.

Rahman conceded that disbursements in the last few years had slowed primarily because of the frequent changes in the government. But ADB’s recent assessment of Nepal appears very encouraging.

“We are pleased to note that economic activity has revived and tourism has picked up. Even though agriculture has not performed that well, a good winter crop can offset the deficit created by a bad monsoon,” pointed out the Asian Development Bank official.