Nepal

Sustained Development and Reform Predicated on Peaceful Resolution of Conflict

Nepal is firmly rooted in a great historical past, and has inherited a rich cultural heritage. Unfortunately, the passage of time has brought difficult times to the country and it now faces daunting challenges.

When I joined office here in early August this year, peace talks were ongoing and there was a sense of cautious optimism. Unfortunately, a major breakthrough in achieving a negotiated settlement to the conflict eluded Nepal again and the ceasefire broke down. Since hostilities resumed in late August, the security situation deteriorated across the country. Over 1,000 people have been killed, including many civilians and children.

The political impasse within the parliamentary forces continues unabated. The increased political instability has added to the uncertainties the country is facing. Although better security conditions during the ceasefire and improving global economic situation have sparked a modest economic recovery, the deteriorating security situation could set back the fragile recovery. The recent rebound in tourism and exports will be difficult to sustain without resumption of a credible peace process.

The restoration of the peace process, law and order, and political stability, therefore, remains the foremost priority for Nepal. This is essential in sustaining the reform process and expediting development activities, particularly in regions and sectors bypassed by the development process.

Regional economic disparities; income inequalities; lack of opportunity; and marginalization of ethnic minorities, lower castes, and women-the root causes of the conflict-cannot be addressed without sustained social and economic progress. These long unresolved issues must now be tacked with strong commitment. While other countries in South Asia are making progress, Nepal is losing precious time.

The Government, private sector, civil society, intelligentsia, and political parties must strive, and do so quickly to restore peace to this restive land. ADB, together with other donors, will continue to assist Nepal in providing assistance to reduce poverty and support the attainment of peace. I urge the Government to lead the development and social transformation of Nepal so that the aspirations of its people are met.

Sultan Hafeez Rahman
Country Director
Nepal Resident Mission
Asian Development Bank