Finance Minister Madhukar SJB Rana assured Nepal’s development partners that the government would meet the latter’s basic operating guidelines. The assurance comes at a time when people from different quarters have criticised government’s bloated security expenditure and its failure to meet development targets. At the Local Donors’ Meet on Tuesday, Rana sought donor support for development arguing that Nepal is at a vulnerable point. Escalating security expenditures, he said were investment for peace and that Nepal’s state of economy was sound. In pledging the State’s cooperation, Rana was seeking support for the coming budget.
The guidelines form the fundamental framework for the State and the donors in pursuing their targets. If the latter do not function in a vacuum, the government cannot give unfettered access and leverage to them in return for their ideas, assistance, suggestions or other services. That is not to say the donors assistance has to be unconditional. Security has been a major concern for the donors in the last few years. But the threat from the Maoists has dwarfed whatever inconveniences the State may be having as it pursues its development goals. However, the donors’ major concern seems to have emanated from the diversion of resources from development to security purposes. Ten per cent annual hike in defence budget is the trend. The Ministry of Defence has asked for Rs 18 billion in the coming fiscal, which is twice the amount approved last year. Not all the donors are likely to swallow this substantial jump.
The finance minister, therefore, had a mighty lot of explaining to do. Howsoever justified Rana was in portraying the economic picture, development must occupy the centre-stage of the new fiscal policy. Nepal has only been punctual in missing the economic growth target each year. That a foundation could be laid for a double-digit growth in three years is of course a far-fetched dream. The insurgency has had a severe impact on the economy and is likely to draw heavily on the State’s resources in the days ahead. But keeping a minimal growth rate going despite the odds is crucial. This alone will send a positive signal to the donor community. All of this can be done well within the perimeter of the donors’ basic operating guidelines.