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October 25, 2012

Views from the Field No. 5 – Nepal

Posted by Udaya Pant

Richard Allen interviewed Udaya Pant, FAD’s PFM Advisor in Nepal for the latest in the series “Views from the Field”.  For the first time on the Blog, the interview includes a Poem on PFM, written by Udaya Pant!

RA:  What have been the challenges you experienced in moving to Nepal? How have you dealt with these challenges?

UP:  I first came to Nepal in August 2009, primarily to implement the treasury single account (TSA), using a TSA implementation study report by FAD.  I took a break of about six months from December 2011 and rejoined in June 2012 with a broadened mandate covering almost all aspects of PFM.

Nepal suffers from political uncertainty and turmoil much of the time.  This creates a problem of continuity.  The present Government (in a caretaker role for the past six months) is the fourth one in the last three years. The budget cycle is not respected.  Civil servants have to rotate after every two years. The capacity to implement reforms is low and fiduciary risk in the country very high. I have seen four Prime Ministers, no regular Auditor General, and eight Financial Comptroller Generals (FCGs).  Another problem is that all government business is conducted in the Nepali language and few officials speak English.

Implementing the TSA has been complex because of politics and other issues.  We persuaded the Minister of Finance to hold a workshop on the TSA for all Secretaries, top civil servants, chiefs of Army and Police, the Auditor General’s office, and other stakeholders. The workshop broke the ice, clarified many issues, and a consensus emerged that it would be good to go ahead with the projct.  We also convinced the treasury staff and spending units that there would be no need for changes in authority and responsibilities, or in the legal provisions of Nepal.  Only the business processes would change. But actually the TSA acted as a catalyst, leading to many other changes in PFM.

RA:  Has the implementation of the PFM Reform Strategy been smooth sailing?

UP:  Nepal has many donors with their own strategic areas and operations. Political consensus for the PFM reform agenda within the country is a huge advantage.  Whichever is the government in power, the reform program is not amended.  Nepal is currently in Phase 1 of its PFM Reform Program.  A  Secretariat coordinates the reform activities and reports to a Steering Committee headed by the Finance Secretary.  Joint forums with the development partners are arranged on a regular basis.  I introduced a Newsletter and a Journal to share information and build understanding on technical subjects.

RA:  How do you coordinate your work program with the IMF Resident Representative and FAD HQ?  Does this create any challenges?

UP: We haven’t had a regular Resident Representative in Nepal for the last two years, and the Res Rep for India looks after the country. We meet when he is in town and I send him a copy of my monthly report. My back-stoppers in FAD have changed frequently; the current one is my fifth in three years!  Implementation of the TSA is emerging as a success story among the donor community, and this news is spreading to my HQ colleagues!  Relations with Washington could be further strengthened if I were invited to visit HQ once a year for briefing, and to join HQ-led missions or provide short-term support to other countries.

RA:  What are the main strengths and weaknesses of PFM in Nepal? What areas of PFM are you giving priority too, and why?

UP:  Nepal has an overarching PFM reform strategy in place. In addition to the TSA, several problem areas highlighted in the 2008 PEFA Assessment are being fixed.  Reforms in planning, budgeting, accounting, public procurement, and capacity development are the focal point of the national and donor reform agenda. Looking ahead, a repeat PEFA Assessment is planned.  Other areas where changes are required include commitment accounting, internal audit, reform of SOEs, GFS-compliant reporting, legislative scrutiny of the budget, and strengthening the IFMIS. The reform process, however, is hampered by political instability, high rotation of staff and other issues mentioned earlier.

RA: How do you work with the donors? How can the working relationship be improved further?

UP:  Support of donors for PFM reform is still building.  The IMF-led TSA implementation became the talk of the town after eight districts implanted the new system in 2009-10; 38 districts in 2010-11; and 60 districts in July 2012 (out of total 75). I worked closely from the very beginning with DFID, the World Bank, GIZ, the ADB, the European Union, the Indian Embassy (for training), and now USAID.  Support for PFM includes a major Multi-Donor Trust Fund administered by the World Bank; an ADB-led program for strengthening PFM at the local level; and SWAPs in the health and education sectors.  A PFM Thematic Group of all donors meets regularly.  No visiting mission leaves Nepal without a briefing from the IMF PFM Advisor!  I set up a three-week training program for 100 middle level officers to India, funded by the Indian Embassy.  I am in touch with other donors to make a similar call.

RA: What is it like to live and work in Nepal? How do the conditions compare with those in your home country?

UP: The culture, systems and practices of Nepal are similar to India. The Nepali language script is the same as Hindi; yet very different in grammar and pronunciation.  I had the advantage of knowing Kumaoni (a dialect back home in Uttarakhand State) that has similar words and grammar. It took me about three months to align the phonetics and pronunciation; and now I am near native in Nepal!  This is a big advantage in my work.  Living in Nepal is not so hard for me but there are frequent strikes when nothing moves.  The security situation can be troublesome sometimes.  People here are affectionate, friendly, warm and very decent.  Given improved resource management and stable government, the country has the potential to develop very fast.

RA:  I understand you are also a poet of some repute!  Would you like to share your experience in poetry?

UP:  Thanks. Richard; here is my contribution. This is also a good time to send Festival Greetings from Nepal to all readers of the PFM Blog!

 

‘We are ready for TSA tomorrow’

Said the FCG in my first meeting

What does this mean? he then asked

The Report with him was full of dust

Conveying that he had never read it

Hmm my first impression that was!

 

He was warm and very enthusiastic

That’s my champion I said to myself

Soon we formed a team and started

Sketchy plans were soon all in place

He then surprised me once again

I want checks to print on the computer!

 

We found a computer guy in-house

Made a quick home-grown software

Tested and trained people to work on

In three months the first pilot rolled out

Unbelievable truth it was for everyone

Next month rolled out another one!

 

Now the harder task of many issues

We took them up to fix one by one

Soon we had surprised everyone

The glare of the stakeholder on us

We had ups and downs but survived

Withstood the test of times around

Credits to the national colleagues!

 

Now we have moved much further

Financing problems no more an issue

Others have joined in with us now

Together we are on a Path of Success

But still a long way from our destination

The journey meaningfully continues!

 

Installing and sustaining of reforms

Is hard labor for sure

You must use all communication skills

Adapt and adopt the best practices

But in simpler ways and one by one

Patience wrapped with impatience

Identify with locals but keep conscience!

 

The journey to development is a zig zag path

While there are footprints on the beaten path

In green-fields each has to find his own way

Using experience and commonsense

Without losing the goal and the resources

Be clear on the expectations of everyone

There is sunshine waiting beneath the clouds!

 

I am more than sure that Nepal will prove

They will make a commitment to themselves

Deliver change soon and benefit Nepal

Prosper and develop surprising every one!

 

Note: The posts on the IMF PFM Blog should not be reported as representing the views of the IMF. The views expressed are those of the authors and do not necessarily represent those of the IMF or IMF policy. 

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