Nepal not to rush for entering into HIPC, MDRI: Finance Minister Dr Mahat
Finance minister Dr Ram Sharan Mahat has said that Nepal would expedite reform measures for the betterment of the national economy rather than rushing to enter into the Highly Indebted Poor Countries (HIPC) Initiative and Multilateral Debt Relief Initiative (MDRI).
Speaking at a programme organized at the Finance Ministry on Thursday, Finance Minister Dr Mahat said Nepal has been a good borrower and paying back its loans to donors on a regular basis and it does not seem to be in a debt crisis, according to newspaper reports.
The Finance Minister also urged all concerned stakeholders to form a consensus on reform initiatives to expedite it further and to save Nepal’s credibility internationally.
HIPC was launched by the World Bank and International Monetary Fund (IMF) as a comprehensive approach to debt reduction in highly indebted poor countries and MDRI was launched in 2006 as an important supplemental initiative for debt relief and progress towards the millennium development goals based on a G8 initiative in 2005.
According to reports, Nepal currently has over Rs 234 billion outstanding foreign debt while domestic stands at Rs 84 billion as of July 16.
Presenting a paper on HIPC and MDRI, senior economic advisors at the MoF said that a total of 40 countries, most of them in sub-Saharan Africa, are now determined eligible to receive debt relief under the HIPC initiative.
Speaking at the same programme, former chief secretary, Dr Bimal Koirala, said that countries who have entered the HIPC initiative have registered disappointing economic growth, adding, “As Nepal holds tremendous potential to achieve a double digit growth in the changed context, entering into HIPC would be a deterring factor.”
“After entering the HIPC, foreign aid flow is likely to be stopped in Nepal’s potentially competitive areas such as hydropower and electricity,” he added.
President of Nepal Economic Association (NEA), senior economist Prof Bishwambher Pyakuryal, suggested the government do serious homework before talking about HIPC. nepalnews.com pb Aug 04 06
