With the 10 plan already out, it may be easier now for the government to talk to the donors for the assistance that is expected from them. And the latest announcement by the World Bank upgrading Nepal's status to Medium Case from the Base Case, thus making Nepal eligible for higher amount of annual lending from the World Bank, should be a good music for the authorities because all the other donors normally follow the World Bank's line. The private sector too is happy because the government is happy.

But the authorities and the private sector have to keep in mind that the World Bank's promise has come with a condition that the speed of reforms introduced during the last 12 months will not slow down. Though the Nepali people and the private sector are not satisfied from the 'reforms' that the World Bank is so happy with, but that is immaterial right now. What is important is that the lead donor is likely to demote Nepal back to its original position of Base Case very soon as the likelihood of the reforms being furthered is very bleak given the present situation.

Decentralization is the cornerstone of the good governance that is taken as the fundamental requirement of the World Bank for Nepal to remain on the medium case. But it is not likely to be furthered during the coming 12 months because of the absence of the elected local bodies. And the elections are not likely to be held before November 2003. The coming rainy season is less than six months away from now; therefore the time is not enough for the preparations to complete the elections before the rains. After the rains come the festivals which will be over only on October end 2003.

From the private sector's point of view, the more important reforms are those related with the banking and financial sector, the labour law, the company law and the cyber law, which are only some of the examples. Though the installation of professional management in the two state-owned commercial banks should be regarded as a very important step in financial sector reform, much more is still to be done to complete the process of reforms in this sector. In the absence of the institutions that are very important links in the legislative process, the reforms can be expected to be only half-cooked. Governance by ordinances is not going to be easily accepted as an example of good governance.

However, we have no other choice than hoping that the year 2003 will see setting up of more stable institutions for good governance. The latest news that the government is preparing for local election in April itself in some districts that are less affected by the insurgency indicates towards a positive development.

Let's pray for the success of the initiative.

Happy new year 2003!