 Statement by the Japanese Delegation headed by Ambassador Zenji Kaminaga at the
Nepal Development Forum, February 4 - 7, 2002 (Kathmandu and Pokhara)
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On behalf of the Government of Japan, we would like to congratulate His Majesty's Government for its efforts in realizing Nepal Development Forum in a span of less than two years. This clearly shows the commitment of HMG towards the development of this country. We would also like to hail the decision of HMG for holding NDF in Nepal. This has further enhanced the significance of the forum and we believe this has also given an opportunity for a wider range of people from civil society to academicians to come under one roof for their active and fruitful participation in the NDF consultations.
- Overview
Ever since the restoration of democracy in 1990, Nepal has been striving towards a stable process of democratization and steady economic development. However, there still remains a host of agendas to be fulfilled. Up to now, the alleviation of widespread poverty is still the most important issue to be pursued.
The Maoist insurgency is yet another issue requiring serious attention and mindful reconsideration rather than falling into complacency of the achievement since 1990. Presently this country is facing a national crisis. The problem of the Maoist insurgency poses a serious threat to the overall national development. The Maoist insurgency is a concern which needs a decisive and lasting solution. Strong security measures should expedite in addressing this problem lest this country should be drawn into a quagmire of endless civil war. The insurgency, on the other hand, is a reflection of unattended rural poverty in the remote areas. Decisive and far-reaching steps must be urgently taken to address the abject poverty in the rural areas where more than 80 percent of the total population resides.
NDF 2002 is the first ever endeavour by His Majesty's Government of Nepal to host Nepal Development Forum on its own soil. My Government, as a close development partner of this country, would like to welcome this initiative as a clear manifestation in the spirit of ownership on the part of HMG in pursuing its development efforts.
We, as a friend of Nepal, will continue to support the development efforts of Nepal wherever possible, trusting in this ownership and the assurance of HMG. The assistance extended by my Government, however, is the fund entrusted to us by taxpayers of my country, which is currently undergoing severe economic setback. It is our sincere desire, therefore, that the assistance provided be utilized in a truly effectual manner.
The key objectives of the NDF 2002, as is clearly stated by HMG, is (1) to take stock of HMG's Agenda of Priority Reform Actions, which are presently in various stages of implementation, (2) to have inputs to the Tenth Plan/ PRSP preparations, and (3) to have broad donor support for HMG's plans to introduce a Medium Term Expenditure Framework as a tool to integrate Tenth Plan/ PRSP strategies and priorities, budget reforms, Foreign Aid Policy and as a means of expediting HMG's Reform Agenda.
These documents are of cardinal importance as a guiding development policy of Nepal as well as a guiding principle for the development partners. My Government welcomes HMG's intention to engage a wide cross section of development actors and stakeholders for determining the future course of this country. We strongly hope that these strategies, once finalized, be translated into real actions in a steadfast manner.
In discussing these strategies, it is absolutely imperative that the plans be framed on the basis of estimates and extrapolations which truly reflect the ground reality of this country. This is especially so in view of the fact that these initiatives of HMG have coincided with an adverse domestic and international situation, in particular, severe financial constraint incurred in connection with the State of Emergency. The action programs have to be built on credible, realistic figures, and have to place much importance on financial prudence. In this regard, it is indispensable to prioritize existing development projects, which are leading to a thin spread of limited financial resources. At the same time, a detailed account should be made on the present budgetary gap related to development expenditures which necessitates additional external support from donors.
- Economic Development of Nepal and Japan's Aid Policy
It is heartening to note that in spite of unfavorable developments encircling Nepal, we have witnessed various pioneering measures of social reforms initiated under the strong leadership of the Right Honorable Prime Minister Mr. Deuba. Notably the land reforms, elimination of discriminatory social conventions, and uplift of women's rights to name but a few. We welcome the new directions set forth by the Prime Minister. My country strongly hopes that under his insightful guidance, this country could achieve expeditious recovery of domestic security, promotion of economic and social reforms, and elimination of poverty, inter alia, poverty in the rural areas. Such reforms like privatization of state owned enterprises and financial sectors are a challenge to which this country has to rise in pursuing its sound economic development. It may not be an easy task to accomplish them in the face of various constraints and carrying out such reforms is a long process for any country. We deem it highly significant for HMG to take necessary actions in a steadfast and realistic manner to produce tangible outcomes. We would of course continue to support those efforts wherever possible.
The most salient feature of Nepalese economy lies in its extreme dual structure - market led economy in the urban areas and subsistence economy for the most part of the rural residents. Under such economic structure, it is not enough to merely enlarge the size of GDP by stimulating the economic growth. It is incumbent upon the government to take drastic measures to deregulate private industries and to reduce the role of government in business related activities, thereby enhancing private sector capability on the one hand, and to focus its efforts and fiscal resources for development on eliminating rural poverty on the other hand. This is a matter of urgency in view of the fact that the dire poverty in the remote rural areas is one of the root causes of the Maoist insurgency. To be more specific, the following four areas need to be addressed.
- Rural development, and uplifting the income and the standard of living of the rural residents who constitute the majority of the total population.
In this regard, it is necessary to disseminate and replicate the production of income generating crops, and to create and improve for the rural populace the enabling environment for market access and circulation of agricultural products, in addition to enhancing agricultural productivity.
- Developing basic economic and social infrastructures like roads, telecommunications, hydropower, etc.
These are also important in terms of building necessary infrastructures for the promotion of tourism industry, which is a predominantly important foreign currency earner in Nepal.
- Social sector development and delivery of social services like primary healthcare and education.
Human resources building is the credible basis for nation building. Universal primary education is significant both in terms of uplifting the lives of each rural individual, and providing necessary human resources for the economic development of this country.
- Disaster mitigation measures and environmental protection.
We would like to highlight here the basic aid policy of Japan. The existing priority sectors of Japan's ODA for this country essentially correspond to the priority areas identified in the PRSP. The only difference between the two is that Japan also places importance on the environmental preservation and disaster mitigation which often fall in the niche of the compartmentalized bureaucratic jurisdictions, and which we regard as essential for the sustainable development activities in Nepal in view of its difficult terrain.
The basic tenet of the Japanese ODA is to assist self-help efforts, in other words, the spirit of ownership, of a recipient government. The Japanese assistance to this country is extended mostly under grant financial aid and technical cooperation in accordance with the above said principle. Concerning soft loans, we would concentrate our efforts in the next fiscal year on implementing Melamchi Water Supply Project, which we decided to extend to this country last March. We will proceed cautiously on extending new loan aid to Nepal, lest it could create an insurmountable burden to this nation in terms of debt servicing in the future. We are also assisting grass-root level projects, or programmes under our small grant assistance scheme in recognition of the importance of the people's participatory role in development. We would extend enhanced assistance under this scheme. We will continue to assist this country in line with the priority areas we have mentioned above. There is a strong concern, however: It is absolutely necessary that our ODA personnel are able to work in this country without any concern for their safety. Hence, we request HMG to take strong measures to protect them.
In the next fiscal year, we are considering to provide assistance to Nepal in the order of nine billion Japanese Yen (¥ 9,000,000,000) in total, for grant financial aid, technical cooperation, and development study under the grant aid scheme.
- Grant Financial Assistance
We continue to support the development of the basic social and economic infrastructures through General Grant Aid like the Construction Project of Sindhuli Road, Aid for Increased Food Production, small grant assistance for participatory grassroot projects with local governments and NGOs. Grant Aid for Debt relief will also be provided to Nepal for procuring necessary commodities to carry out development activities.
- Technical Assistance
We will continue support for human resources development and institution building under this scheme. Experts will be dispatched to support in the areas like formulation of economic policy, healthcare, education. We will also accept trainees for this purpose. JOCV Volunteers and Senior Volunteers will be dispatched to assist at the grassroot level.
We will continue to send our experts and volunteers to this country while exercising utmost caution for their security.
- Development Study
We are planning to continue conducting a feasibility study for the Formulation of Effective Irrigation and Drainage Development Plan of the Water Resources of Sunsari River, as well as a feasibility study for Construction of a Hydropower Station. We are at the final stage of present development study on Earthquake Disaster Mitigation.
- Concluding Remarks
The spirit of overcoming difficulty with self-reliant efforts is the most fundamental driving force of development. It is this spirit of self-help which is critically needed for this country at this moment of national crisis. As an adage goes, a friend in need is a friend indeed. Japan, for its part, is committed to assist such self-reliant efforts of Nepal, as its largest bilateral donor and a true friend of this nation. We trust that this country will endeavour to overcome the challenges ahead of it.
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