Nepal | January 26, 2020

Finance Minister Khatiwada throws transparency norms to the wind

Holds a meeting with development partners and donors, but publishes press note in form of an ad with selective info

Himalayan News Service

Kathmandu, April 19

The Ministry of Finance has given transparency, which is considered a key element for prudent public finance management and effectiveness of foreign aid, a short shrift.

The MoF organised a local donors’ meet yesterday in which Finance Minister Yubaraj Khatiwada himself addressed development partners and held an interaction with donors. The government briefed development partners regarding the economic situation, priorities of the government and expectations from development partners in terms of aligning resources with the government’s priority.

But, the ministry has tried to keep the discussions secret, as the finance minister instructed that the issues discussed with donors should not be made public, according to finance ministry sources. “Guided by a conservative mindset, Khatiwada is reluctant to disclose information, which is quite an atypical behaviour in a democratic society,” a source told THT.

However, MoF seems to have been in a bind because of the commitment made to donors regarding information disclosure, which is mandatory for obtaining foreign assistance. Following the meeting with local donors, MoF published a formal press note in a national daily that was written in poorly worded English in the form of an advertisement. The same could have been issued as an official media release for the press.

“Publishing the press release as an advertisement shows that the government is just trying to take the development partners into confidence that they are abiding by the global principles of transparency and accountability while mobilising foreign assistance,” said Tara Nath Dahal, an activist of right to information. “It is a clear example of curtailing information. The MoF has published a press note as an advertisement since it fears that the media will publish everything in detail.”

One of the representatives of a development mission in Kathmandu, who participated in the meeting, said on condition of anonymity that the finance minister urged donors to align their resources with the government’s priority, as the country’s spending needs had increased in the new administrative set-up.

The ‘confidential’ presentation made by the MoF to donors and obtained by THT asked development partners not to hand-pick any project from the provincial and local governments, stating that the MoF was the focal point for all kinds of development cooperation.

It also seems that development partners have some differences with the government, as the ‘advertisement’ of the MoF published today quotes Veronica Cody, ambassador of the European Union, that she expressed concern about the development finance mobilisation mechanism in the federal set-up on behalf of development partners.

In the meeting, the MoF expressed concerns about aid fragmentation. Stating that a large chunk of aid is being mobilised from outside the budget, MoF asked the donors to channelise aid through the government’s budget. As per the MoF, one-fourth of the aid disbursement is outside the budgetary system.

The MoF asked development partners to cooperate with the government on procurement issues and reduce the volume of direct payments and commodity grants. It also asked donors to align their assistance with the government’s priority and scale up assistance to post-earthquake reconstruction.

Khatiwada said the government’s white paper reflected the actual status of the economy and urged development partners to assist the government.


A version of this article appears in print on April 20, 2018 of The Himalayan Times.

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