With the adoption of liberal economic approach after 1990 in Nepal, several reforms have taken place in economic policies, industrial policies and financial deregulations. However, they did not follow with adequate contemporary reforms in other sectors resulting in less efficiency and an apathetic feeling of the reforms made. Specifically, second generation reforms including institutional improvement remain weak and public-private interface or policy dialogues have also been weak. Identifying weaknesses and failures of its past attempts to address economic policy reforms, HMG/N realized the need for developing an institutional mechanism that could serve as a forum for economic policy dialogue based on sound analysis.

The present initiative 'Establishing Economic Policy Network' (EPN) in execution by the Ministry of Finance is assisted by the Asian Development Bank (ADB) through a technical assistance (TA) (view TA paper). The TA was formally launched on August 9, 2004 and is scheduled for completion on December 31, 2005.

What is an Economic Policy Network?

An Economic Policy Network is a way of describing the means of communication of economic policy ideas around the country. Such networks are not necessarily physical or even formal and include a wide range of ways in which information and dialogue about economic policy might occur between government agencies and the public at large, between different groups in society and among professional economists in the private and public sectors.

What works best for the economic policy network would vary from society to society, and over time with changes in technology. Underpinning this project is the presumption that an analytical approach and open and well informed dialogue about policy will facilitate the development and implementation of better economic policy. Networks for enhancing such dialogue could occur in a variety of ways: (i) across central government agencies; (ii) between different levels of government; (iii) among economic policy analysts working outside government; or (iv) for communication between government and private sector firms in industry and commerce.

In Nepal all these networks could be enhanced though perhaps the most significant vacuum is the lack of commentary and analysis coming from economists outside government. Nepal's economists operate largely as individual "soldiers of fortune" and there appears to be no critical mass of economists in university centers, institutes, or independent arm's length government research agencies.

To develop a modality for establishing an economic policy network several meetings including a pre-inception and inception meetings were held among government and private sector stakeholders and the Asian Development Bank (ADB). From these meetings, the framework for the Steering Committee and Advisory Committees have been established and the implementing agencies identified. Similarly, a Focal Unit has been established within the Economic Affairs and Policy Analysis Division (EAPAD) at the Ministry of Finance (MOF) to assist the implementation of the TA.

An Inception Report has been developed highlighting the objectives of the TA, implementation modality, and a detailed work plan. The TA will establish a public-private interface for economic policy dialogue and analysis among various stakeholders including professionals and academia through regular meetings of related committees, dialogues, workshops, and seminars. Policy papers prepared under the four thematic areas will serve as the basis for policy dialogue and conclusions to be reached among stakeholders. In addition, the project website will provide a forum for information dissemination to and feedback from a wider audience. Similarly, commissioning of newspaper articles will be done to enhance public understanding of the issues.