By Shiv Raj Bhatt
Contribution of foreign aid in Nepal’s development can be debatable, however, the reality is that Nepal still relies much on aid. Around 70 percent of the development budget is financed by aid and it accounts for over 10 percent of country’s GDP.
Foreign aid has been instrumental in Nepal’s development, mainly in reducing infant and child mortality, increasing primary school enrollment, reducing gender gap, increasing access to drinking water, infrastructure development, and natural resource management. Similarly, institutional capacities of the government, non-governmental organisations and private sector have been significantly improved with the help of aid. Its role in local development, decentralization, gender mainstreaming, uplifting socio-economic status of dalits, indigenous minorities and ethnic groups is also notable.
Facts and figures show that Nepal achieved significant development targets with the help of aid, but many indicators of development are still low. Moreover, donors’ initiatives to support Nepal’s development process have been facing serious challenges in recent past, mainly due to the conflict, political instability, absence of democratic institutions, and divergence in the ideas and interest. Now it has been realized that external resources are helpless to face the challenges of development in a sustainable manner in absence of internal conditions conducive to use available resources efficiently and equitably.
Lack of accountability and transparency, wrong targeting, misallocation of resources, neglect of poor people’s voices, corruption, and dominance of elite are some problems of aid-supported programmes. Therefore, removal of these hurdles is very much needed to make aid work for people, basically the poor.
Despite of many weaknesses, no one can blame foreign aid or foreigners for low development outcome in Nepal. Necessity of aid cannot be ignored, but over dependency and endless increment is harmful. Unfortunately, in Nepal, the flow of aid has been used as the measuring rod of government’s success.
Participation of stakeholders is necessary even in aid-supported programmes. But instead of stakeholders’ participation, donor’s influence in domestic policy-making is very large. Therefore, it is necessary to reduce such interferences, while insuring stakeholders’ participation in all the stages of plan formulation and implementation.
Aid mostly comes with conditionality and in recent past conditions of aid are very unpleasant therefore, aid conditionality should be relaxed.
Similarly, ego war between government and donors has also been observed many times, which is not good for both the parties as well as for the targeted real beneficiaries of the aid. Therefore, such ego war should be minimized.
After February 1 of this year, many donors had stopped or discontinued their support, pressurizing the government to restore democracy. Advancing development requires democratic governance; therefore, it cannot be sidelined in modern civilized world. Viewing its importance, the King also showed his strong commitment for democracy many times formally and informally. However, many ministers and other high officials have failed to grasp this truth and are arguing that Nepal will not die if the aid will be stopped.
Of course, Nepal will not die if donors stop their support, but many Nepalese, especially the poor will be sufferer in such situation, which ultimately is not in the interest of donors and government. The donor community is showing their strong commitments for Nepal’s development, especially in the areas of education, health, infrastructure development and poverty alleviation. However, it seems that the ruling government attaches low importance to these areas in comparison to arms and ammunition. Many donors have already withdrawn their support from many development projects due to government’s failure to convince them. Lack of balanced aid diplomacy is the primary cause of such failure. Therefore, Nepal needs balanced aid diplomacy that maintains our pride while minimizes confrontations with donors.
At the end, to make aid an instrument of development and poverty alleviation, Nepal should urgently identify and assess the goods and bads of aid and accordingly remove/minimize its bad effects while keeping up the bright side in the future.
(Bhatt is Programme Officer with the UN-supported Trade Related Capacity Building Project. Views expressed here are his personal. Please send your comments to [email protected] or [email protected])
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