Nepal’s economic experts highlight role of China-initiated bank in reconstruction

KATHMANDU, June 24 (Xinhua)– Economic experts in Nepal have said that the China-proposed Asian Infrastructure Investment Bank (AIIB) could be the new source of capital for earthquake-stricken Nepal’s rebuilding when the bank comes into operation.

The AIIB’s capital in rebuilding of Nepal would be the much more important than other multilateral financial institutions such as the World Bank, International Monitory Fund and Asian Development Bank, the experts opined.

Nepal became the founding member of the AIIB in November last year.

Experts’ view came at a time when Nepal is all set to host the International Donors’ Conference on Nepal’s Reconstruction-2015 with the theme Towards a Resilient Nepal to be organized on Thursday.

The conference is aimed at raising international assistance for rebuilding the country ravaged by the April 25 earthquake.

“Being a founding member of the bank, Nepal should get more capital for rebuilding. AIIB’s capital would be vital for our economic development in the near future,” an economic expert and the former member of the parliament, Hari Roka, told Xinhua.

Roka said Nepal will get more financial support from neighboring countries including China and India than the West countries, given their incessant support to Nepal’s endeavors for years.

“The AIIB and BRICS Development Bank’s support to Nepal’s rebuilding would be much more important than that of the World Bank, IMF and ADB even though these West-dominated banks have been engaged in Nepal’s development efforts for years,” he said.

The government recently said it will take at least five years to complete reconstruction works.

“The new financial institutions have given a new hope for developing countries like Nepal,” Roka said.

Nepal has no option other than requesting to donor countries and financial institutions for concessional loans to rebuild the destroyed houses and bring back the dwindling economy on the track, other experts said.

Nepal is one of the least developed countries in South Asia with unemployment over 40 percent and per capita GDP of just 1,000 U.S. dollars.

The mass earthquake struck on April 25 has battered the Himalayan country’s economy and the National Planning Commission recently said nearly 700,000 were forced into poverty.

Nepal’s economic growth was much slower than most of its South Asian neighbors before the April 25 earthquake.

The Asian Development Bank forecast for this year has been dropped from 4.6 percent to around 4.2 percent in light of the quake.

Economic expert Keshav Acharya said BRICS Development Bank and Asian Infrastructure Investment Bank (AIIB) will play a complementary role to existing financial institutions in the World.

“The BRICS Development Bank and AIIB will certainly play a complementary role to existing financial institutions such as the World Bank, Asian Development Bank and other lenders,” Acharya said.

“Nepal should explore the opportunity to capitalize on these latest developments to support reform and development agenda in the priority areas,” the expert said.

Former Finance Secretary Rameshwor Khanal viewed that neighboring countries of China and India’s support would be the most important in Nepal’s rebuilding. He said Nepal is expecting more support from China and India rather than other countries.

“The AIIB will be a new gateway for us. The AIIB’s capital will be extremely important for us when it comes into operation. We have to reconstruct our damaged infrastructures and go for better economy,” he viewed.

He also praised China’s continued support in Nepal’s development endeavors.

AIIB and Silk Road Fund are aimed to provide financial support to regional infrastructure development projects in the framework of China’s Silk Road Economic Belt and the 21st Century Maritime Silk Road initiatives.

According to a recent Post Disaster Need Assessment (PDNA) prepared by the National Planning Commission, 7 billion U.S. dollars is necessary for rebuilding of the country.

The devastating earthquake claimed nearly 9,000 lives, injured another 23,000 and damaged more than 500,000 buildings leaving hundreds of thousands of people homeless. Nearly one million people have been pushed into poverty due to the quake, the Planning Commission said.

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