NEPAL: CENTRAL GOVERNMENT HAS TRANSPARENT BUDGET

UNCLAS KATHMANDU 000263 SENSITIVE SIPDIS EEB/IFD/OMA JULIA JACOBY AND SCA/INS E.O. 12958: N/A TAGS: EAID ECON PREL NP SUBJECT: NEPAL: CENTRAL GOVERNMENT HAS TRANSPARENT BUDGET REF: SECSTATE 28885 Budget Publicly Available -------------- ¶1. The following is post's response to reftel regarding the FY09 prohibition on central governments whose budgets are not transparent. ¶A. YES, the central government of Nepal (GON) is receiving U.S. foreign assistance using FY09 funds. ¶B. YES, Nepal's budget is publicly available. ¶C. YES, incomes and expenditures are included in the publicly-available budget. Post's Assessment of Accuracy of Budget -------------- ¶2. (SBU) Post judges that the GON's budget to date accurately reflects actual government incomes and expenditures, but we have concerns about the Maoist-led government's intentions to allocate funds. The budget for FY09 has provisions for development and infrastructure, including road building, for which Finance Minister Baburam Bhattarai has yet to approve expenditures. The GON could use these provisions to funnel money to the former combatants of the People's Liberation Army or the Young Communist League, the youth wing of the Maoists that continues to engage in violent activities across Nepal. POWELL