Announcement of Nepal Aid Group Meeting on December 6 , 1983

FOR IMMEDIATE RELEASE World Bank 1818 H Street, N.W., Was hington, D.C. 204 33, U.S. A. • Telephone: (20 2) 477-1234 PRESS RELE ASE Cont act: Pushpa N. Schwa r tz December 6 , 1983 ( 202) 477 - 3651 NE PAL AI D GROUP MEE TING 1. The f ol lowi ng announcement was is sued to day at the Wor ld Bank ' s Eu r opean Office in Pa ri s . 2. Governments and institutions concerned with development assistance to Nepal met in Paris on December 5 and 6, 1983 , under the chairmanship of the World Bank. The meeting was attended by representatives of the Governments of Austria , Canada, France , the Federal Republic of Germany, Japan, Switzerland, the United Kingdom , the United States, and by representatives of the Asian Development Bank, the European Community, the International Monetary Fund and the United Nations Development Programme. Representatives of the Governments of Belgium and Finland, the International Fund for Agricultural Development, the Development Assistance Committee of the OECD, the Saudi Fund for Development and the United Nations Conference on Trade and Development, also att e nded the meeting as observers. The Nepalese delegation was led by Dr. P.C. Lohani, Minister for Finance and Communications, His Majesty's Government of Nepal. 3. The Head of the Nepalese delegation stated that, following a severe drought in 1982/83, the recovery of agricultural production in the current year had improved the economic outlook for 1983/84. The Government had acted to contain the short-run budget and balance of payments deficits. For the longer term, it would focus attention on structural problems, such as increasing agricultural production, harnessing wate r resources, developing the e xport sector and controlling population growth. The Government was committed to strengthening domestic resource mobilization, improving development administration and expediting project implement a tion. The members of the Group endorsed these areas of Nepal's policy emphasis and stressed that their effective implementation would be vital in overcoming the country ' s multiple problems of longer-term development . 4. In this context , the meeting considered three special topics: agriculture, population and energy . Reversing the decline of agricultural produc t ivity is a major challenge. A b road strategy for overall agricultural development as well as alternative approaches to various subsectors were discussed. It was recognized that essential elements would include training and institutional reforms; ir r igation development; pr omotion of integrated crop, lives t ock and forestry systems, e s pecially in the Hi l ls; and increasing farm incomes thro ugh research and incentives des i gned to inc r ease produc t ivi t y .  2 s. The high population growth rate is a major obstacle to raising per capita incomes and living standards in Nepal. The Group emphasized the need for continuing Government commitment t o reduce population growth, which substantially exceeds that of agricultural production. The Group strongly supported the country's population strategy, policies and programs which were outlined by the Nepalese delegation. The effective implementation of these programs is expected to lead to a substantial reduction in the population growth rate by the end of the century. 6. On energy, the Group discussed the rapid depletion of Nepal's forests caused by the increasing demand for fuelwood. While forests have been over-exploited, jeopardizing ecological stability, Nepal's immense water resources have remained largely unexploited. The discussion dealt with ways to assist Nepal in increasing traditional fuel supplies to meet growing household energy requirements. Forestry programs, biogas and conservation through improved stoves were important components in the strategy considered. For the modern sector, commercial energy supplies would be met through greater use of hydro-power and possible development of hydrocarbons. 7. Reviewing Nepal's aid requirements, the members of the Group took note of the measures adopted by the Government since the last meeting, and stressed the need for the Government to itensify its efforts to improve development administration, mobilize domestic resources and develop the trade sector. The members of the Group on their part assured the Government that they would continue to provide financial and technical assistance to help Nepal in addressing its development priorities.