Saturday, May 4, 2013

Nepal losing opportunity for more foreign aid sans NDF

KATHMANDU, May 3: It has been nine years since Nepal last organized the Nepal Development Forum (NDF) -- a gathering of Nepal´s donors to make fresh commitments for support. That one was held on May 5-6, 2004 in Kathmandu while an earlier NDF meeting had been held in Pokhara in 2002.

In the absence of clear government policies and strategies for new development plans, frequent changes of government and an uncertainty in the Constituent Assembly (CA) elections, Nepal´s position to negotiate with donors for larger aid commitments has been weakened. The widening gap has been felt in the communications between government officials and top officials representing bi-lateral as well as multilateral donors in recent years.

Failure to hold the Nepal Development Forum (NDF) meetings, Nepal’s best opportunity to lobby for the greater external support, since 2004 has weakened its strength in securing more financial assistance from the donor community.
In 2000, the Paris Club meeting was held in Paris where different donors made commitments to support for the restoration of peace and development activities in Nepal, which was then in the midst of the bloody Maoist insurgency.

The Paris Club is a group of the world´s biggest economies which provide financial services such as war funding, debt restructuring, debt relief, and debt cancellation to indebted countries.

“We have been losing a great opportunity in securing support for our development strategies from our development partners in the absence of NDF meetings for more than nine years,” Madhu Kumar Marasini, joint-secretary at the Ministry of Finance (MoF) told Republica.

As the political parties could not come up with a common minimum agenda and strategies for economic development, donors are not convinced to make fresh commitments to extend financial support to Nepal.

“Donors are always showing their concern about the lingering political instability and lack of a common agenda from all political parties on economic issues. But, our prolonging political transition and lack of concrete commitment from political parties on economic issues has hampered our capability to secure confidence,” Rajan Khanal, another joint-secretary at the MoF, said.

Khanal said Nepal, as a country passing through post-conflict transition, could have ensured more support from donors had it formulated clear strategies and programs to seek assistance from the donor community.

In a bid to systematize the mobilization of foreign aid, the government is in the process of preparing a new Foreign Aid Policy which envisages securing foreign assistance in line with national needs instead of following donors´ priorities.

“Nepal has to learn from Afghanistan, which organized donors meeting in Japan as a post-conflict country to drum up greater support to reconstruct war-torn the country,” Khanal added.

Donors, who are skeptic about the transparency of the spending of aid by recipient countries, are demanding early elections followed by a stable government in Nepal to pave the way for their wider supports. However, in the absence of political stability, Nepal has failed to maintain proper communication about its economic agenda with international donors.

“As we couldn´t communicate about our programs to our donors for last nine years, we have taken the initiative to maintain dialogue with local donors,” Marasini, who is also the chief of the International Economic Cooperation Coordination Division at the MoF, said.

Rajiv Upadhyaya, External Relation Specialist at the World Bank-Nepal office, also said Nepal´s failure to call timely meetings of NDF created a vacuum in communication between donors and Nepali officials. “Donors are not clear about the exact priorities and strategies of Nepal. Frequent meetings of NDF is necessary to ensure greater support from donors,” Upadhya said.

In a bid to win the confidence of donors, the government on Tuesday organized a local donors´ meet in the capital. Donors have been concerned about the uncertainty of elections, frequent changes of government, nominal level of capital expenditure and lack of the government´s development strategies. However, addressing the groups of representatives from bi-lateral and multi-lateral donor agencies, Finance Minister Shankar Koirala instead sought their long-term strategies that could fit the policies taken by the government.

“In the absence of the concerned country´s policies and strategies, donors can´t make any strategies of support,” Updhyaya further said.

However, we have also no dearth of people who think frequent meetings of NDF are not necessary if the country can better communicate with donors through their local representatives.

“I have not felt any negative impact on donors´ commitments for aid in the absence of NDF meetings, which bring in top officials representing donors, as the government has been in regular discussion with donors’ representatives available in Nepal,” Lal Shankar Ghimire, joint-secretary at the Office of the Prime Minister and the Council of Ministers (OPMCM), said.

According to the Development Cooperation Report of MoF, actual disbursement of foreign assistance during Fiscal Year 2011/12 dropped to US$ 1.04 billion from US$ 1.07 billion reported in Fiscal Year 2010/11.

Ghimire, who was heading the International Economic Cooperation Coordination Division of MoF until last year, opined that Nepal should be able to propose its own priorities, agendas, programs and policies with the donors before organizing an NDF meeting.

Foreign aid commitments were made through the Nepal Aid Group before it was renamed as NDF in 2002.

Ghimire said Nepal has at least been engaged in discussions with local donors and in the Nepal Portfolio Performance Review (NPPR) meetings which are organized regularly in an annual basis.

Published on 2013-05-03 03:00:19

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