Leaks to the media earlier this month of the government's objections to a World Bank-DFID report on social inclusion and the United Nations Development Assistance Framework (UNDAF) document have been indicative of Nepal's new assertiveness about aid.
Government officials suspect donors involved deliberately leaked the documents to the media, and this has further strained relations and hardened positions. Donor officials, on the other hand, say the Foreign Ministry and the National Planning Commission (NPC) are trying to take out all mention of exclusion, discrimination and impunity from the documents.
The government's approval of an ordinance this week on setting up a Truth and Reconciliation Commission by watering down its mandate with provisions of amnesty for wartime atrocities and combining it with a Commission on Disappearances is sure to anger other donor groups which support human rights in Nepal. The Foreign Ministry has lately increased its scrutiny of international NGOs operating from Nepal, and has been telling donors that they should help Nepal in infrastructure and development, and get away from constitution, governance, and social justice sectors.
The NPC had objected to the use of words like 'statelessness' and 'impunity' in the UNDAF document, among others, stating that use of such words were not well-founded and did not reflect well on the government which was part of the joint document.
The NPC's Dipendra Bahadur Chhetri told Nepali Times this week, "Accusations that the NPC is against federalism and social inclusion are baseless, as are the allegations of hill-elitism." Chhetri denied that Prime Minister Bhattarai did not agree with the Planning Commission's stance on the document, clarifying that the PMO had never told him to lift the objections.
The UNDAF document's reference to 'statelessness' draws attention to 2.3 million Nepalis who do not have citizenship certificates because if a Nepali man marries a foreigner, his wife instantly gets citizenship but if a Nepali woman marries a foreigner, her children are not entitled to citizenship. The problem is more acute in the Tarai where women often marry across the border, and when divorced come back to their parents with children, who then become stateless.
Chhetri insists that as long as aid falls in line with national policy, the NPC will not object. Most countries try to channel bilateral and multilateral assistance to their priority areas, but what surprises many is why the NPC and the Foreign Ministry are getting so assertive and whether or not they have a wink from the Prime Minister to do so.
Donor influence in prioritising and managing aid in Nepal gets stronger at times when governments are weaker. And past governments have rarely questioned the donor agenda, making the approval and signing of joint documents with line ministries a mere formality. In the past, donors have got what they wanted while the government looked the other way.
The change in the government's approach seems to have been partly caused by a turf battle between the Ministry of Finance, which used to be the final arbiter on aid, and the Ministry of Foreign Affairs which now also wants a say. In fact, the Cabinet recently decided that henceforth it will be the Ministry for Foreign Affairs that will decide on aid policy and donor relations.
"Since foreign aid comes from outside, it is only natural that we should be involved," argues the Ministry of Foreign Affair's Arjun Bahadur Thapa.
The controversy earlier this year surrounding Rupantaran Nepal, an NGO which was awarded a large forestry project grant from DFID, the government of Finland and the Swiss SDC, spotlighted aid policy and execution. Critics say donors are in violation of the Paris Declaration 2005, the Accra Agenda for Action 2008 and the Fifth High Level Meet on Aid Effectiveness in Busan in 2011.
More than 60 per cent of Nepal's development budget comes from bilateral and multilateral donors, of which 70 per cent goes through the Finance Ministry. The rest is channeled through the Social Welfare Council to NGOs and civil society groups.
The UN is understood to have sent a new text for UNDAF with some of the words changed. But given Nepal's dependence on foreign aid and the government's new assertiveness on its priorities, the politics of foreign aid is bound to generate more heat in the future.
Trickle up, DAVID SOGGE
Trying to achieve the MDGs is like trying to walk up an escalator going down
Bogged down, CK LAL
Parliament and civil society must monitor donor activities
Develop this, DANIEL LAK
Implicit in development is the notion of superiority.