Takuya Kamata, World Bank’s country manager for Nepal, in an email interview with Prithvi Man Shrestha spoke about reconstruction delays, immediate priorities for reconstruction and overall economic outlook

What is the World Bank’s evaluation of the current state of reconstruction?

Since its establishment last December, the National Reconstruction Authority (NRA) has made important progress in terms of policies, legal procedures and direction — all of which are necessary to advance reconstruction. The NRA is gradually expanding its presence in the 14 districts worst hit by the earthquakes and it is still staffing itself and streamlining procedures to effectively carry out its role.

In spite of the start-up delays, progress is in line with similar international experiences such as Pakistan and Indonesia.  Experiences such as Haiti demonstrate what can happen when international organizations, NGOs, private foundations and the Government move quickly ahead without planning and coordination. The results are disparities in assistance received, exclusion of affected populations, and misuse of funds.  Nepal is taking steps in the right direction to carry out a successful reconstruction process.

Who and what is responsible for delayed reconstruction?

2015 has been a difficult year for Nepal.  In the span of six-months, Nepal has been hit by two major shocks. These socio-economic impacts of the second shock, i.e., the border crisis and the disruption in trade have been widely reported.  But from a recovery standpoint, the acute shortage of fuel and construction materials, along with the government’s preoccupation with managing another set of public hardships, presented logistical difficulties and delays.  To its credit, the government maintained a focus on planning for earthquake recovery, notwithstanding all of those difficulties.

What should be the immediate priorities?

A post-disaster recovery program requires a commitment of financial and human resources, as well as focused efforts to prioritize and sequence reconstruction over several years.  The Government of Nepal is attempting to articulate just that in the Post Disaster Recovery Framework (PDRF) that it is currently preparing.  The PDRF will be a common framework for all parts and levels of the government, national and international partners, and other stakeholders, including the affected population and will guide the planning, financing, implementation and monitoring of recovery and reconstruction. 

WB aid is focused on reconstruction of housing. Is World Bank concerned with people rebuilding their own home? And the quality of the houses being built after last year’s quake?

The Earthquake Housing Reconst-ruction Program that the World Bank is supporting is designed to be“owner driven”, meaning that the beneficiaries themselves are primarily responsible for reconstruct ing their homes.  Beneficiaries will be supported to build back better so that their houses are more resistant to future earthquakes. The subsidy will be paid out in three installments.  Each payment will be subject to certification by competent technical personnel in order to ensure 

that the grants are used to build houses according to safer standards, using local materials and enhanced traditional construction techniques.  And in order to ensure transparency and accountability, the World Bank is working with Government authorities to ensure that housing reconstruction grants are deposited directly into the bank accounts of verified beneficiaries.  We are helping the government fine-tune its budget management systems so that it can track and verify fund transfers in real time and generate expenditure reports that can be used for third-party verification.

How would you describe the economic outlook for Nepal?

Post-earthquake and prior to the border crisis, we estimated that growth would slow to 3.4 percent in FY15, two percentage points lower than a year before.  We expected growth to pick up to 5.5 percent in FY17, on the back of increased public and private investment, as the political process stabilized and the earthquake recovery took off in earnest.

Clearly those assumptions have changed. With varying intensity, the trade disruptions—which lasted more than four months, affected economic activity across the board. Industry has been severely hit. The service sector, i.e., tourism, trade, and transport were all disrupted. Agriculture has suffered from a lack of fertilizers and other inputs. Government revenues and expenditures have both fallen sharply, while shortages of goods have pushed up prices, adversely affecting welfare. 

Estimating the impact of the trade disruptions in a data-poor and uncertain environment is inherently difficult and imprecise. Based on the data available, and applying a number of different approaches, our current estimate is that growth in FY16 could range anywhere from 1 to 2.3 percent.