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Nepal and ADB Sign Partnership Agreement to Fight Poverty

MANILA, PHILIPPINES (22 October 2001) - The Government of Nepal and the Asian Development Bank (ADB) have signed a partnership agreement aimed at reducing the incidence of poverty from over 40 percent of the population at present to less than 10 percent by 2017.

The Poverty Reduction Partnership Agreement, signed on Sunday by Nepal Finance Minister Dr. Ram Sharan Mahat and ADB Vice President West Myoung-Ho Shin, aims to achieve specific goals by 2017, including:

• Reduce infant mortality from 118 to 62.5 per 1,000 births;
• Increase life expectancy from 56.1 to 68.7 years;
• Increase the adult literacy rate from 40 to 100 percent; and
• Bring down population growth from 2.3 percent to 1.5 percent.

The goals set in the agreement can be revised based on the Government's upcoming 10th Five-Year Plan (FY2002-FY2007) and on regular reviews that will allow the agreement to remain current and responsive to Nepal's changing needs. As poverty reduction is a shared objective, ADB will coordinate closely with Nepal's other development partners in helping the Government achieve its targets.

"ADB will support the Government in achieving its poverty reduction goals through support for rural development, improvement in basic social services and infrastructure, women's empowerment, corporate and financial sector reform, and governance reform," said ADB Vice President Shin.

The Government and ADB will focus on (i) generating of productive employment opportunities and increased rural incomes through broad-based, more-rapid growth; (ii) improving provision of basic social services; (iii) creating an enabling environment for competitive private sector development; and (iv) supporting good governance by improving efficiency, predictability, accountability and transparency in the public and private sectors. The Government and ADB will improve targeting of resources to ensure faster and more equitably distributed social development and economic growth.

Subject to ADB's performance-based allocation system that links the level of future lending to Nepal's performance in key areas, ADB plans to provide concessional, low-interest loans to Nepal totaling $80-$90 million per year. In addition, ADB will provide technical assistance grants of about $4 million per year to assist in project preparation, capacity building, and policy development. Close monitoring and analysis of the poverty situation and benchmark targets though extensive consultations will be a key component of ADB's assistance.

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