Country may not have next periodic plan

The country may not have a three-year or five-year periodic plans after 2012/13, as the National Planning Commission (NPC) has not been able to initiate the process for formulating such a plan due to political vacuum created by the dissolution of the Constituent Assembly on May 27.

NPC officials claim that the commission has so far failed to develop a base paper, the preliminary sketch of the periodic plan, due to the prolonged political transition and uncertainty on how the upcoming economic policies will be framed. This paper is required to frame the periodic plan, which is considered long-term development blueprint. 

“NPC, which develops the periodic development plans, normally begins the preparation for the base paper a year and half ahead of its launch,” NPC member Janak Raj Shah said. “The NPC has not even been able to form technical committees to work in that direction so far.” 

NPC has so far formulated 10 full-fledged five-year periodic plans, an interim plan and the existing three-year periodic plan. The current three-year plan, which has targeted to achieve 5.5 percent economic growth rate, will expire by the end of fiscal year 2012/13. 

“In order to develop a base paper for the next periodic plan, we need a clear roadmap of the country´s political course,” Shah shared, indicating the country may be devoid of a long-term development plan after the next fiscal year ends.

Suggesting alternatives, Dr Posh Raj Pandey, former member of NPC, said that the government can announce a ´Plan Holiday´ if it is fails to come up with a periodic plan.

“Plan Holiday can be an alternative if the NPC can´t come up with the periodic plan due to political uncertainties and absence of government that enjoys people´s mandate,” he said.

Nepal seeks more German support for product development

In a bid to streamline aid coming into the country for purposes of product development and value chain improvement, the government has requested the German government to provide assistance in a more consolidated way so that it could be more useful for production and export.

The Ministry of Commerce and Supplies (MoCS), which is carrying out the implementation of Nepal Trade Integration Strategy (NTIS) 2010 -- a blueprint to boost exports -- wrote a letter to the German government this week requesting for additional specific support. 

“We have approached the German government to provide assistance to enhance the production capacity and improve value chain,” Toya Narayan Gayawali, joint secretary at MoCS, said. “We need more support from our perspective development partners in a more consolidated way.”

According to an MoCS official, the German government has provided around US$1 million (Rs 91 million) for two years from 2010 to 2012. “That support is going to end by December,” the official said. MoCS has forwarded a letter to the German government this week with some additional requests for further support Nepal´s supply side constraint, such as infrastructure development and improvement of value chain.

Development partners including Germany, the US and the Asian Development Bank (ADB) provide aid for trade but those are not specifically for product development. “Germany is a development partner which has been providing assistance to MoCS,” the official said. “We are trying to make it more focused.”

According to the Organization for Economic Cooperation and Development (OECD), Nepal anually receives Rs 60 billion foreign aid on average, of which 35 percent comprises aid for trade. “We need to strengthen the supply side capacity to get returns from the trade,” Gayawali said. “Our request to the German government is an attempt to achieve something substantial in that direction.”

In the meantime, the government has not been able to allocate enough money in the yearly budget for the implementation of NTIS. According to MoCS officials, the government had allocated just Rs 30 million in the previous fiscal year and Rs 50 million this fiscal year. “We have requested for Rs 120 million for NTIS implementation from the Ministry of Finance for the upcoming fiscal year,” the official said preferring anonymity. “Against this backdrop, we are looking for Germany´s consolidated support on product development.”