Nepal's finances dire, minister appeals for international help

NEPAL: Nepal's finance minister painted a grim picture of the impoverished country's economic situation and appealed to donors to increase payments.

"The GDP growth rate (this financial year) is only 1.8 percent which is lower than the population growth rate of 2.24 percent. So this fiscal year we can't foresee any improvement in Nepal's economic situation: instead people will become less well off," minister Ram Sharan Mahat told parliament.

Parliament met again for the first time in four years at the end of April after weeks of massive anti-royal protests ended 14 months of direct rule by King Gyanendra.

Palace expenses have rocketed since parliament was dissolved in 2002, with a dramatic rise after King Gyanendra sacked the government and took direct control in February 2005, a white paper said.

"In 2001/2002, royal palace expenditure was 1.8 million dollars. Royal expenses reached over 6.3 million dollars in 2002 after parliament was dissolved. In 2004/2005 it reached over eight million dollars. In 2005/2006 it has already reached 10.6 million dollars," the white paper said.

Nepal is one of the world's 10 poorest countries with annual per capita income around 240 dollars per year. More than half of its development budget comes from foreign donors and the finance minister appealed to them to increase funding.

"At present, there is high probability of long-lasting political solution and restoring peace in the country. We would like to request to our donors and multinational companies to immediately resume their suspended financial support to speed up the development process," said Mahat.

Kathmandu, Tuesday, AFP.