88427
                                                                   Nepal

                                       Country Partnership Strategy FY2014-2018

                                                               Chair Summary

                                                                May 29, 2014

       Executive Directors discussed the joint IDA/IFC/MIGA Country Partnership Strategy
(CPS) for Nepal for the period FY2014-2018.

        Directors welcomed the progress Nepal has achieved in reducing poverty and improving
social indicators. They welcomed the Government of Nepal’s goal of improving the living
standards for all Nepalis and reaching middle-income status. Nonetheless, they took note of the
many challenges still facing Nepal and they underscored the need for the authorities to
implement reforms that would allow Nepal to promote macroeconomic stability, achieve higher
and sustained growth rates, and make further progress on reducing poverty.

       Directors welcomed the shift to a medium-term Country Partnership Strategy and
appreciated that it is aligned with the priorities of the Government’s development plan. They
also supported the strategy’s greater proposed emphasis on strategic selectivity, while leveraging
IDA, IFC and MIGA. In this regard, they particularly valued the close World Bank Group
collaboration to unlock Nepal’s hydropower potential, which can provide the basis for increased
regional integration.

        Directors supported the proposed focus on addressing the binding constraints to growth,
namely: infrastructure, including electricity and transportation; an improved business
environment; and increased financial sector stability. That said, they noted that serious needs
remain in the health and education sectors and urged close coordination with donors to minimize
fragmentation. Directors also urged strengthened efforts to increase agriculture productivity and
skills development, particularly with regard to women. Further work to consider both the
potential and challenges related to remittances was also encouraged.

       Directors noted the need to strengthen implementation capacity and governance,
including improved effectiveness, efficiency and accountability of public expenditure. Finally,
they welcomed the focus on regional integration and urged the World Bank Group to consider
more strategic engagements with a regional impact in South Asia.




                                                            
*This summary is not an approved record.