Identifier
Created
Classification
Origin
06KATHMANDU1298
2006-05-23 10:22:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Kathmandu
Cable title:
WHITE PAPER HIGHLIGHTS DISMAL STATE OF NEPAL'S ECONOMY
how-toVZCZCXYZ0001 OO RUEHWEB DE RUEHKT #1298 1431022 ZNR UUUUU ZZH O 231022Z MAY 06 FM AMEMBASSY KATHMANDU TO RUEHC/SECSTATE WASHDC IMMEDIATE 1550 INFO RUEHNE/AMEMBASSY NEW DELHI PRIORITY 9770 RUEHLM/AMEMBASSY COLOMBO PRIORITY 4641 RUEHIL/AMEMBASSY ISLAMABAD PRIORITY 2625 RUEHLO/AMEMBASSY LONDON PRIORITY 4038 RUEHKA/AMEMBASSY DHAKA PRIORITY 9745 RUEHML/AMEMBASSY MANILA PRIORITY 1688
UNCLAS KATHMANDU 001298
SIPDIS
SENSITIVE
SIPDIS
DEPT FOR SCA/INS
MANILA FOR P SPELTZ
E.O. 12958: N/A
TAGS: ECON, EAID, EFIN, PGOV, PREL, NP
SUBJ: WHITE PAPER HIGHLIGHTS DISMAL STATE OF NEPAL'S
ECONOMY
REF: KATHMANDU 1283
STATE OF NEPAL'S ECONOMY DISMAL
-------------------------------
UNCLAS KATHMANDU 001298
SIPDIS
SENSITIVE
SIPDIS
DEPT FOR SCA/INS
MANILA FOR P SPELTZ
E.O. 12958: N/A
TAGS: ECON, EAID, EFIN, PGOV, PREL, NP
SUBJ: WHITE PAPER HIGHLIGHTS DISMAL STATE OF NEPAL'S
ECONOMY
REF: KATHMANDU 1283
STATE OF NEPAL'S ECONOMY DISMAL
--------------
1. (SBU) ON MAY 15 FINANCE MINISTER DR. RAM SHARAN MAHAT
PRESENTED A WHITE PAPER (WP) TO THE RE-INSTATED PARLIAMENT
DEPICTING A DISMAL PICTURE OF THE CURRENT STATE OF NEPAL'S
ECONOMY AND THE GOVERNMENT'S FISCAL CONDITION. THE WP
WARNED OF A SERIOUS FISCAL DEFICIT. IN THE WP, MAHAT
BLAMED THE ROYAL GOVERNMENT FOR RECKLESS EXPENDITURE OF
GOVERNMENT FUNDS. MAHAT HIGHLIGHTED THAT ESCALATED
SECURITY EXPENDITURES, HIGH-LEVEL FOREIGN TRIPS AND OTHER
ARBITRARY EXPENSES HAD PLACED A BURDEN ON THE ECONOMY,
ALREADY BELEAGUERED BY TEN YEARS OF A MAOIST INSURGENCY.
MAHAT ACKNOWLEDGED THAT WITH THE EXISTING SOURCES OF
REVENUE THE GOVERNMENT COULD NOT MEET REGULAR EXPENDITURES
FOR THE CURRENT FISCAL YEAR, WHICH ENDS ON JULY 14, 2006.
GOVERNMENT TAKES ACTION TO EASE FINANCIAL CRISIS...
-------------- --------------
2. (SBU) THE WP ANNOUNCED STEPS THAT THE NEW GOVERNMENT OF
NEPAL (GON) HAD TAKEN TO EASE THE FINANCIAL CRISIS. THE
WP CALLED FOR BETTER GOVERNMENT EXPENDITURE MANAGEMENT,
STOPPED THE CREATION OF NEW GOVERNMENT JOBS, AND IMPOSED A
BAN ON UNNECESSARY FOREIGN VISITS. THE WP STATED THAT THE
GON WOULD NOT PURCHASE WEAPONS OR NEW VEHICLES. IN AN
EFFORT TO BOOST TOURISM, THE WP URGED FRIENDLY COUNTRIES
TO REVOKE NEGATIVE TRAVEL ADVISORIES AND ENCOURAGE THEIR
NATIONALS TO VISIT NEPAL.
...APPEALS TO DONORS
--------------
3. (U) MAHAT ALSO APPEALED TO DONORS AND DEVELOPMENT
PARTNERS TO QUICKLY RESUME ALL STALLED AID, PROVIDE
BUDGETARY SUPPORT TO RESOLVE THE IMMEDIATE FINANCIAL
CRISIS, AND OFFER LIBERAL SUPPORT TO HELP THE GOVERNMENT
IN ITS QUEST FOR ECONOMIC REVIVAL TO ENHANCE THE PROSPECTS
FOR AN ENDURING POLITICAL RESOLUTION AND PEACE (REFTEL).
THE FINANCE MINISTER STRESSED THAT FOREIGN DONATIONS WERE
THE ONLY OPTION TO SUSTAIN THE ECONOMY. EARLIER IN MAY,
RAMESHWOR KHANAL, JOINT SECRETARY, FOREIGN AID
COORDINATION DIVISION OF FINANCE MINISTRY, HAD SAID THAT
NEPAL WAS SEEKING A TOTAL OF USD 1.2 BILLION FOR
RECONSTRUCTION AND REHABILITATION.
COMMENT
--------------
4. (SBU) THE NEW GON FACES A TOUGH CHALLENGE TO PUT THE
ECONOMY BACK ON TRACK. IN ORDER TO DO SO, THE GON WILL
HAVE TO GAIN DONOR CONFIDENCE FOR ECONOMIC DEVELOPMENT
PROGRAMS AND PROVIDE AN IMPROVED ECONOMIC CLIMATE.
MORIARTY
SIPDIS
SENSITIVE
SIPDIS
DEPT FOR SCA/INS
MANILA FOR P SPELTZ
E.O. 12958: N/A
TAGS: ECON, EAID, EFIN, PGOV, PREL, NP
SUBJ: WHITE PAPER HIGHLIGHTS DISMAL STATE OF NEPAL'S
ECONOMY
REF: KATHMANDU 1283
STATE OF NEPAL'S ECONOMY DISMAL
--------------
1. (SBU) ON MAY 15 FINANCE MINISTER DR. RAM SHARAN MAHAT
PRESENTED A WHITE PAPER (WP) TO THE RE-INSTATED PARLIAMENT
DEPICTING A DISMAL PICTURE OF THE CURRENT STATE OF NEPAL'S
ECONOMY AND THE GOVERNMENT'S FISCAL CONDITION. THE WP
WARNED OF A SERIOUS FISCAL DEFICIT. IN THE WP, MAHAT
BLAMED THE ROYAL GOVERNMENT FOR RECKLESS EXPENDITURE OF
GOVERNMENT FUNDS. MAHAT HIGHLIGHTED THAT ESCALATED
SECURITY EXPENDITURES, HIGH-LEVEL FOREIGN TRIPS AND OTHER
ARBITRARY EXPENSES HAD PLACED A BURDEN ON THE ECONOMY,
ALREADY BELEAGUERED BY TEN YEARS OF A MAOIST INSURGENCY.
MAHAT ACKNOWLEDGED THAT WITH THE EXISTING SOURCES OF
REVENUE THE GOVERNMENT COULD NOT MEET REGULAR EXPENDITURES
FOR THE CURRENT FISCAL YEAR, WHICH ENDS ON JULY 14, 2006.
GOVERNMENT TAKES ACTION TO EASE FINANCIAL CRISIS...
-------------- --------------
2. (SBU) THE WP ANNOUNCED STEPS THAT THE NEW GOVERNMENT OF
NEPAL (GON) HAD TAKEN TO EASE THE FINANCIAL CRISIS. THE
WP CALLED FOR BETTER GOVERNMENT EXPENDITURE MANAGEMENT,
STOPPED THE CREATION OF NEW GOVERNMENT JOBS, AND IMPOSED A
BAN ON UNNECESSARY FOREIGN VISITS. THE WP STATED THAT THE
GON WOULD NOT PURCHASE WEAPONS OR NEW VEHICLES. IN AN
EFFORT TO BOOST TOURISM, THE WP URGED FRIENDLY COUNTRIES
TO REVOKE NEGATIVE TRAVEL ADVISORIES AND ENCOURAGE THEIR
NATIONALS TO VISIT NEPAL.
...APPEALS TO DONORS
--------------
3. (U) MAHAT ALSO APPEALED TO DONORS AND DEVELOPMENT
PARTNERS TO QUICKLY RESUME ALL STALLED AID, PROVIDE
BUDGETARY SUPPORT TO RESOLVE THE IMMEDIATE FINANCIAL
CRISIS, AND OFFER LIBERAL SUPPORT TO HELP THE GOVERNMENT
IN ITS QUEST FOR ECONOMIC REVIVAL TO ENHANCE THE PROSPECTS
FOR AN ENDURING POLITICAL RESOLUTION AND PEACE (REFTEL).
THE FINANCE MINISTER STRESSED THAT FOREIGN DONATIONS WERE
THE ONLY OPTION TO SUSTAIN THE ECONOMY. EARLIER IN MAY,
RAMESHWOR KHANAL, JOINT SECRETARY, FOREIGN AID
COORDINATION DIVISION OF FINANCE MINISTRY, HAD SAID THAT
NEPAL WAS SEEKING A TOTAL OF USD 1.2 BILLION FOR
RECONSTRUCTION AND REHABILITATION.
COMMENT
--------------
4. (SBU) THE NEW GON FACES A TOUGH CHALLENGE TO PUT THE
ECONOMY BACK ON TRACK. IN ORDER TO DO SO, THE GON WILL
HAVE TO GAIN DONOR CONFIDENCE FOR ECONOMIC DEVELOPMENT
PROGRAMS AND PROVIDE AN IMPROVED ECONOMIC CLIMATE.
MORIARTY