The donors have asked the government to bring transparencyin its defence expenditures, make an immediate public announcement of a time-bound action plan to strengthen institutional capacity and weed out corruption in three key areas - customs. VAT and income tax, the Judiciary and the police.

The suggestions came when the donor community presented the finance minister last month with a list of high priority actions, which have been on the government’s reform agenda for quite some time

Their recommendations put special emphasis on five key areas: Social sectors, institutional capacity and governance, financial sector, reform of the state-owned enterprises (SOEs) and redressing fiscal policy.

The government has also been asked to apprise the donors of the timetable for implementation of these priority actions.

In their suggestions for high firlority actions on the fiscal ront. the donors have asked the government to "institute transparent accounting of its all defence expenditures."

They have also asked the government to eliminate state guarantees for SOEs' loans and institute hard budget constraints for them.

The government shoukLhold ptiblic discussions on the its investment and recurrent expenditure plans, together with tax policy proposals, as part of the budgetary consultation process, said the donors.

The donor community have also called for bringing more

people and companies under the tax net while expanding the existing domain of VAT, introduction of compulsory pre-ship-ment inspection and adoption of a unique taxpayer identification number for payment of all taxes.

They were again critical of the non-transparent and noncompetitive contract awards in all key areas including areas which are being opened up to the private sector and stressed measures to check these.

In their suggestions, the donors also sought appointment of an ombudsman and measures for effective enforcement of the existing laws and amendment of the legislation to deal with extortion and toll taking. Establishment of the Human Rights Commission also found place in their action

agenda.

They said that the government should take bold decisions and measures to prevent interference in the management functions of the nation-, alised commercial banks (NCBs) including loan sanctioning. personnel decisions and contract awarding.

Reappointment of chief executives and reorganisation of the boards of the NCBs by filling the top positions with individuals who meet required standards of competence and integrity also found its place in the high priority actions list.

Regarding privatisation, the government should publicly announce a SOE-reform strategy, including voluntary separation scheme and privatisation targets and enact the Privatisation Bill, they said.