KATHMANDU, February 9, 2022 – Nepal has made significant progress in human capital development, although major 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 offers an opportunity to promote greater human capital accumulation, but it requires significant investment and improved spending efficiency, says World Bank report “Federalism and Public Spending for Human Development in Nepal: An Emerging Agenda”launched virtually today.

While federalism helps bring policy-making and service delivery closer to the people, it can be further strengthened by clearly defining the responsibilities of each level of government and by ensuring that systems and resources are in place for their implementation, says the report.

This report provides a comprehensive review of the challenges facing the human development sectors in Nepal in the federal context“, said Mr. Madhu Kumar Marasini, Finance Secretary. “The recommendations are aligned with our national development plans and will inform and support our continued efforts to ensure that all levels of government have the means and tools to perform their key functions in delivering basic services in the areas 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 of the poor, and integrate delivery processes; (ii) clarify the roles of the different levels of government and ensure the implementation of standards; (iii) improve management processes and systems, including a social registry; (iv) the establishment of incentives to promote good management practices; and (v) address human resource challenges to ensure that subnational governments have the capacity to effectively deliver quality services.

“The World Bank is committed to continuing to support government reforms to improve human capital outcomes, building on the recommendations of this report, as well as the Public Expenditure Review Report on Fiscal Policy for Sustainable Development launched in December 2021”, noted Mr. Faris Hadad-Zervos, World Bank Country Director for the 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 by our technical dialogue and our financial investments in the health, education and protection sectors. social, as well as through our various development policy credits.”

“Human capital is at the heart of the Green, Resilient and Inclusive Development (GRID) approach adopted by Nepal“, noted Dr. Biswo Nath Poudel, Vice President of the National Planning Commission. “Development sustainability, adaptation to risk and (inclusive) disparity reduction all require tackling the structural issues that impede further improvements in human development outcomes. The report’s recommendations are intended to help move Nepal’s GRID program further in this regard.“.