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Annual Report 2003 : Moving the Poverty Reduction Agenda Forward: Priorities and Outcomes : South Asia

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Nepal

Strategy and Policy Dialogue.
The strategic thrust of ADB operations was to assist the Government in achieving its objective of a sustainable reduction in poverty through increasing rural incomes, equitable improvements in basic social services, and good governance—all key to addressing the root causes of the ongoing conflict. ADB operations focused on supporting the Government in formulating and implementing its Tenth Five-Year Plan (2003–2007) which embodies its poverty reduction strategy. The Plan’s goal is to reduce poverty through broad-based economic growth, social sector development programs to promote social inclusion, and good governance. ADB also initiated preparation of the CSP 2005–2009 to support implementation of the strategy in the Tenth Plan and to assist the Government in addressing root causes of the conflict, reflecting lessons learned from the implementation of the 1999 country operational strategy and subsequent CSPUs.

A key feature of ADB’s operations was its assistance to the Government with the implementation of its poverty reduction strategy in an environment marked with conflict and fiscal crisis. ADB provided program support for undertaking critical reforms for effective management of public expenditures, for strengthening revenue administration, for privatizing and liquidating nonperforming public enterprises, for improving public sector governance, and for institutional restructuring for efficient management of water supply in the Kathmandu Valley.

ADB’s project assistance focused on developing innovative, communitybased approaches to project implementation in small towns and rural areas, particularly in the rural water supply and sanitation and agriculture sectors. Policy discussions and wide stakeholder consultations were also undertaken to support reforms and to introduce private sector participation for more efficient operation and management of the water supply and wastewater services in the Kathmandu Valley. Continued emphasis was placed on reforms to improve corporate and financial governance and rural finance delivery and to promote efficiency in key sectors such as irrigation, education, and energy.

Loans and Technical Assistance.
Five loans totaling $94 million for public sector management, community-based water supply and sanitation, water service development in the Kathmandu Valley, and community livestock development were approved. Nine technical assistance projects totaling $4.2 million were approved.

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