Between 2002 and 2007, as the government and Maoists fought out the latter stages of a bloody war in the countryside and signed up for peace, exports plummeted, government and private sector investment fell and agriculture stagnated. Nepal's growth dropped from more than five per cent to 2.9 per cent in the period.

Since the signing of the peace agreement in November 2006, the government has tried to focus on social reconstruction to bring about more inclusive development. In the 2007-2010 interim plan the government included gender empowerment targets, and went further in the 2007-08 fiscal year with gender responsive budgeting (GRB).

Typically, when the national budget is formulated, it tends to ignore the different, socially determined roles, responsibilities and capabilities of women and men. There's a blanket assumption?which doesn't translate into reality?that all sections of society will benefit from the national budget. GRB doesn't mean asking for more money, or for separate budgets for men and women.

Rather, it is a way to encourage those charged with planning programs and budgets to address the needs and interests of different social groups. Government ministries are required to report on the gender responsiveness of their programs and activities, which are accorded one of three ratings according to their gender sensitivity: directly supportive, indirectly supportive or gender neutral.

In the 2007-08 budget, about 24 per cent of social services spending (such as education, health, local development and drinking water provision) were classified as 'directly supportive' of gender equality, and 55 per cent as 'indirectly supportive'.

In contrast, only 10 per cent of spending on economic services (agriculture, communications, forestry, land reform, transportation, industry, etc.) was classified as directly supportive of gender equality. In the worst performers?land reform, forestry and communications?at least 90 per cent of expenditure was seen as gender neutral.

This evaluation of the 2007-08 budget shows very clearly the built-in imbalance in the system. We will have to wait and see if new gender-responsive programs can have a positive impact.

One school of thought believes that if Nepal truly wants to reduce the gender gap, policy makers must stop designing separate programs for men and women. But in an extreme patriarchal society like Nepal's, women do need to be given a special focus because it is clear that gender-neutral programs generally only benefit men.

Nepali women do most of the agricultural work but have no rights over the land they till. They cannot even get loans. Thousands of Nepali women die in childbirth every year because there is no midwife in the village. We now have a Constituent Assembly comprising one third women. If we could have this gender ratio in local government, especially in decision-making positions, this would be hugely beneficial to women.

But by just telling various ministries to be gender sensitive without providing them with the necessary tools, progress will be limited. In adopting the concept of a gender sensitive budget, the government has shown a will to be responsive to women's needs. But unless this will translates into money actually being allocated to women and then spent properly, gender inequalities will remain.