2000年-世界发展银行全球_Nepal___Public_Expenditure_Review_Volume_1_Main_Report_113页_9mb

Nepal Public Expenditure Review Summary

Core Content

This document is the Nepal Public Expenditure Review (PER), a comprehensive analysis of public expenditure policies in Nepal. It is divided into five volumes, with Volume I being the main report. The review was conducted by the Poverty Reduction and Economic Management Unit of the South Asia Region of the World Bank, and it highlights the challenges in Nepal's public resource management and proposes reforms to improve the effectiveness of public spending.

Main Report Overview

The report outlines the macroeconomic setting of Nepal and the need for improvement in public expenditure policies. Nepal, with a per capita income of only $210, is one of the poorest countries in the world. Nearly half of its population lives below the poverty line, and its social indicators, while improving, are comparable to those of poorer African countries. The report emphasizes the inefficiency in public spending, which has not significantly reduced poverty despite substantial aid inflows and government expenditure.

Key Issues in Public Resource Management

1. Weak Fiscal Structure

• Fiscal Deficit: Government spending accounts for nearly one-fifth of GDP, with a significant portion of the budget not aligned with actual resource availability and institutional capacity.
• External Assistance: About 5.6% of GDP is spent on external assistance, but this has not translated into effective development outcomes.

2. Deficiencies in Resource Allocation and Management

• Budget Preparation: The budget process is fragmented, with the Ministry of Finance (MOF) handling the regular budget and the National Planning Commission (NPC) handling the development budget. These are not well integrated, leading to poor prioritization and allocation.
• Over-Programming: Development budgets are often over-programmed due to political pressures, resulting in insufficient resources for projects.
• Lack of Prioritization: There is no clear prioritization of projects or a rolling three-year expenditure program to guide budget allocations.
• Weak Institutional Mechanisms: Project screening and expenditure management mechanisms are weak, and financial reporting is inadequate despite improvements due to the Financial Comptroller General's Office (FCGO).

3. Political and Institutional Interference

• Political Interference: Political pressures often influence the fund release process, favoring quick spenders over priority projects.
• Corruption: There is a notable increase in corruption, which affects both revenue and expenditure management.
• Ineffective Legal Safeguards: There are no strong legal or institutional mechanisms to address financial irregularities or corruption, as evidenced by the lack of convictions despite numerous cases reported by the Commission for Investigation of Abuse of Authority (CIAA).

4. Poor Implementation and Monitoring

• Project Implementation: Many projects suffer from poor implementation due to lack of commitment, delays in fulfilling effectiveness conditions, and inadequate beneficiary involvement.
• Monitoring and Accountability: The monitoring and accountability mechanisms are not robust, leading to leakages and poor maintenance of public infrastructure.

5. Decentralization Challenges

• Local Development Programs: While the government has emphasized decentralization, the implementation has been mixed. Local councils/committees often lack the technical capacity to manage projects effectively.
• Beneficiary Involvement: Beneficiary involvement and transparency at the local level are often lacking, which affects the quality and effectiveness of public spending.

Key Findings and Data Highlights

• GNP Per Capita: $210 (FY99).
• GDP at Factor Cost (FY99): 4754 million NRs or 96.5% of GDP.
• Gross Domestic Investment (FY99): 956 million NRs or 19.4% of GDP.
• Gross National Saving (FY99): 700 million NRs or 14.2% of GDP.
• Current Account Balance (FY99): -256 million NRs or -5.2% of GDP.
• Broad Money (M2) Growth: Increased from 69.8 billion NRs in FY94 to 152.9 billion NRs in FY99.
• Consumer Price Index (CPI): Rose from 284 in FY97 to 417 in FY99.
• Poverty Rate (FY99): 42% of the population, with rural areas being particularly affected.
• Education Spending: 2.8% of GNP (FY99), with mixed results in terms of enrollment and quality.
• Health Spending: 1.2% of GDP (FY99), which is below the regional average.
• Social Security and Welfare: 0.1% of GDF (FY99).
• Access to Safe Water: 59% of the population (FY99), with urban areas having better access.
• Immunization Rate: 85% for measles and 78% for DPT (FY99).
• Child Malnutrition: 47% of children under 5 years (FY99).
• Life Expectancy: 57 years (FY99), with male and female averages at 58 and 60 years respectively.
• Infant Mortality Rate: 83 per 1,000 live births (FY99).
• Under 5 Mortality Rate: 117 per 1,000 live births (FY99).

Reform Agenda

The report proposes a reform agenda to improve public resource management, including:

• Improved Budget Allocations: Aligning budgets with actual needs and priorities.
• Enhanced Institutional Capacity: Strengthening the capacity of government and local institutions to manage public resources effectively.
• Strengthening Legal and Institutional Safeguards: Implementing stronger legal frameworks to address corruption and financial irregularities.
• Promoting Decentralization: Enhancing local governance and community involvement in development programs.
• Phasing of Reforms: A structured approach to implementing reforms over time, with a focus on improving the effectiveness of public spending.

Conclusion

The report concludes that systemic and institutional weaknesses are the primary causes of the inefficiency in public spending. It emphasizes the need for reforms in budgeting, resource allocation, and implementation processes, as well as improvements in governance and transparency to ensure that public resources are used effectively to achieve development goals.