KATHMANDU / Nepal has made significant progress in human capital development, though key challenges remain in the health, education, and social protection sectors, which have been exacerbated by the COVID crisis. Nepal’s transition to a federal state presents an opportunity to promote greater human capital accumulation, but it requires significant investment and improved efficiency in spending, states the World Bank’s report “Federalism and Public Expenditure for Human Development in Nepal: An emerging agenda” launched virtually today.
While
federalism is helping bring policymaking and service delivery closer to the
people, it can be further strengthened through a clear definition of
responsibilities of each level of government and ensuring the systems and
resources are in place for their implementation, states the report.
“This
report provides a comprehensive review of the challenges facing Nepal’s human
development sectors in the federal context”, stated Mr. Madhu Kumar Marasini,
Finance Secretary. “The recommendations are aligned with our national
development plans and will inform and support our ongoing efforts to ensure all
levels of government have the means and tools to perform their key functions in
the delivery of core services in education, health, and social protection.”
The
Public Expenditure Review (PER) identifies key reforms to help Nepal improve
human capital outcomes in the federal context: (i) addressing gaps in
programming, including economic inclusion for the poor, and mainstreaming
delivery processes; (ii) clarifying roles of different levels of government and
ensuring standards are implemented; (iii) improving management processes and
systems, including a social registry; (iv) introducing incentives to promote
good management practices; and (v) addressing human resource challenges to
ensure that subnational governments have the capacity to efficiently deliver
quality services.
“The
World Bank is committed to continue supporting government reforms to improve
human capital outcomes, drawing on the recommendations of this Report, as well
as the Public Expenditure
Review Report on Fiscal Policy for Sustainable Development
launched in December 2021,” said Mr. Faris Hadad-Zervos, World Bank Country
Director for Maldives, Nepal, and Sri Lanka. “Human capital is one of the
pillars of our Country Partnership Framework, and the implementation of key
reforms will be supported through our technical dialogue and financial
investment in the health, education and social protection sectors, as well as
through our various Development Policy Credits.”