June 22, 2015

KATHMANDU: Asian Peoples’ Movement on Debt and Development (APMDD), a regional anti-illegitimate debt campaign network, has started lobbying for cancellation of Nepal’s external debt, citing such a package will contribute to the recovery and reconstruction costs of the country.

The call comes at a time when the government is all set to hold the International Conference on Nepal’s Reconstruction (ICNR). The conference, being held on June 25, aims to seek financial assistance from the international community to rebuild parts of the country ravaged by the devastating earthquake of April 25 and its numerous aftershocks.

Nepal’s total external debt amounts to Rs 326.03 billion as of April 13. Of this, Rs 291.58 billion needs to be paid back to multilateral donors and the remaining — Rs 34.45 billion — to bilateral donors.

Full cancellation of Nepal’s external debt will indeed be a genuine and meaningful global partnership for sustainable development, says a statement issued by APMDD, whose members include seven non-governmental and mass-based organisations based in Nepal.

“Our demand will also be premised upon governments of least developed countries’ (LDCs) consistent call for full cancellation of both bilateral and multilateral debt (public and private) as agreed by the United Nation’s General Assembly (GA) in its resolution 68/224 (adopted at 68th session in 2013 vis-a-vis follow-up to LDC-IV) and in line with GA decision contained in OP 16 of the GA resolution 61/188 (adopted at 61st session in 2006) which states if a country fulfils the criteria of being an LDC, it is eligible for debt write-off,” says the statement, adding, “In this context, Nepal being a party to LDC Group should also be consistent in calling for full cancellation of all external debt especially in the wake of the quake disaster as the right political moment.”

However, Finance Minister Ram Sharan Mahat said Nepal will not table the proposal on debt relief at the ICNR.“This is because the country’s fiscal condition is sound and our debt repayment capacity is also very good,” he said. “Also, Nepal’s debt sustainability indicators are better than those of many other countries.”

He, however, said the government may ask foreign governments and development partners to defer the debt repayment period. “We think this could be one of the ways to ease the country’s financial burden,” he added.

Source: Himalayan News Service