The Asian Development Bank (ADB) Nepal Resident Mission has expressed pleasure over the recent political developments here and hinted at increasing aid to Nepal if the new government placed its priorities on socio-economic development of the nation.

Country director of the bank Sultan Hafeez Rahman said here on Saturday that the forthcoming government has to inform donors about its development priorities, following which international donors can take a coordinative approach.

What is crucial is that the government has to work out "plans and programs" to address the root causes of poverty, Rahman said.

He suggested that the government needed to address effectively the issues of social inclusion and lack of good governance, which are underlying causes of conflict.

Recent political developments will ultimately bring more opportunities, he told reporters.

However, there are difficult challenges as well, Rahman said, adding that economic recovery will start picking up in a short period as the confidence level of people here has increased.

Talking about the tremendous potential Nepal has, Rahman said, "There is a need to expand development activities and take reform measures. Immediately, the service sector and the tourism sector will see better days in days to come."

"The hardest hit, the manufacturing sector, can now grow at a faster pace as their unused capacity will be fully utilized for better productivity," Rahman said.

The private sector needs an enabling environment, as it is the real engine of growth, he added.

Rahman hoped that the development expenditure will increase in days to come.

If the cease-fire is to hold, Nepal can get back to normalcy in the economic sector.

He said that ADB is waiting for the government, which has the job of articulating development priorities.

ADB already approved 110 million U.S. dollars per year for 2004 to 2007 on a yearly basis through its Country Strategy Paper, according to Rahman.

ADB will not lag behind in joining donors' group to increase aid to Nepal, he said.

However, the government has to clearly spell out its programs and priorities, focusing on poverty reduction strategy, Rahman added.

He said that peace is critical for a strong and sustained economic performance.

He expressed confidence that Nepal can register even a 7 percent economic growth at par with other South Asian countries in about three years' time, provided the security situation in the country remains stable.

Source: Xinhua