KATHMANDU: Nepal is set to receive a massive grant of NRS 1,600 crore from the World Bank for poverty reduction and rural infrastructure expansion, with promise of additional fund if the country is successful in the peaceful transition to democracy. "It is the biggest grant assistance package the bank's board is extending to Nepal at a go," said Praful Patel, World Bank Vice President for South Asia. The Bank is providing Nepal NRS Rs 1,600 crore grant for poverty reduction and rural infrastructure expansion which is to be approved on December 6 during the Nepal Day celebration at the WB head office in Washington DC, he said.

Nepal was a highly prioritised country for the WB, Patel said, adding international assistance to the Himalayan country could even double if the country managed to hold free and fair elections. Patel, who was in Kathmandu to participate in the bank's South Asia Senior Management meeting, said that its support to Nepal would continue to rise in 2008. "The WB's three-year International Development Assistance (IDA) will rise by 20 percent in 2008," he said. IDA-14 ends this year and IDA-15 starts from 2008. Patel said that the WB was fully in favor of Nepal. "Our celebration of Nepal Day at the end of the regional senior management's meet and at the head office is testimony to that," Patel was quoted as saying by the Kanitipur online on Tuesday.

Patel said that the WB was also discussing providing additional budget to Nepal. "This, however, will come with conditions," he said, adding that reform in labour laws was the foremost condition for Nepal to get the additional assistance.

Patel, World Bank Vice President for South Asia, argued that Nepal's rigid labour laws were forcing its citizens to seek employment abroad. "We know there has been a delay in finding an outlet to current political problems, but we also know that major political parties are working to hammer out a solution," he said, adding instability in the country would not impact the bank's assistance to Nepal. While lauding the positive role of the civil society in attaining a political settlement, he said early elections and the formation of a new government would have facilitated and eased the implementation of development projects.

Nepal's landmark peace process has been stalled after the Maoists walked out of the government on September 18 after dispute with the coalition partners over its demand for the abolition of the monarchy and adoption of proportional electoral system in the country. The Maoists abandoned their decade-long armed revolt last year to join the peace process and became part of parliament and government earlier this year. The international community has warned that a prolonged political stalemate would endanger the landmark peace process in the country.

Sources : Times of India