Dr. Ram Sharan Mahat awarded the Banker’s Global and Asia-Pacific Finance Minister of the Year
Dr. Ram Sharan Mahat receives The Banker’s Global and Asia-Pacific Finance Minister of the Year awards for his exemplary work in the aftermath of the two disastrous earthquakes that hit Nepal in 2015 and in pushing for reforms to improve governance in the country’s ministry of finance.
Mr Mahat was the first Nepalese government official to interact with the international community after the earthquakes. He took a last-minute trip to the Asian Development Bank (ADB) annual meeting in Baku, Azerbaijan, to raise awareness among his peers and the press.
The trip to the ADB helped set up the International Conference on Nepal’s Reconstruction on June 25, where attendees – including finance ministers, the ADB, the World Bank and the EU – pledged $4.1bn.
In the immediate aftermath of the earthquakes, Nepal collected $150m-equivalent in cash for emergency relief, $100m of which came from the government’s own coffers. More than 25,000 earthquake victims got free medical treatment and some 7500 of the injured were airlifted from remote and inaccessible hills and mountains across the country.
“I am proud to say that not a single death occurred for lack of medical support. Everyone got medical treatment. Nobody died of starvation; food was sent everywhere. We successfully managed and organised such an operation after this devastating calamity,” says Mr Mahat.
Mr Mahat’s efforts in planning a Post Disaster Need Assessment to gauge the earthquake’s damage and Nepal’s needs – estimated at more than $6bn – were also key. The process required several hundred staff and was completed in just one month. In the budget for the fiscal year, starting mid-July 2015, Mr Mahat also allocated $900m for reconstruction and rehabilitation programmes.
Unfortunately, post-earthquake reconstruction will be delayed by protests in southern Nepal – the Madhesi people of that region feel under-represented in the new constitution – and by India’s de-facto blockade, which is choking flows of basic raw material and supplies into Nepal. “International trade between two countries should not be linked with domestic politics. It is in no way a right tool to influence constituent politics of a small country such as Nepal. Nepal’s internal problems should be resolved internally in a peaceful and constitutional manner,” says Mr Mahat.
On a brighter note, Nepal’s finances and macroeconomy have remained sturdy despite uprisings and natural calamities. Fuelled by $6bn in annual remittances, Nepal’s foreign exchange reserves, at $8.5bn, are enough to fund more than a year’s total imports. Its deficit is also low and Nepal’s ratio of debt to gross domestic product is 25% – one of the lowest in the world. “We could borrow internally if needs be. There is the required fiscal space,” says Mr Mahat.
Even inflationary pressures are being minimised, despite the earthquakes. Inflation in Nepal has already dropped from 9.8% in 2013 to an expected 7.2% in 2015. However, supply disruptions and increasing wage levels, caused by huge labour demand for reconstruction programmes, might push inflation as high as 8% to 10% in 2016.
Among Mr Mahat’s many reforms, pushing for more efficient government spending stands out. “There is no excuse to delay government activities,” he says. Mr Mahat is no longer Nepal’s minister of finance but remains involved in Nepalese politics as one of the leading figures in opposition party Nepali Congress.
Source: The Banker
