Though amusing at the time, the remark was a glaring reminder of the impact of the development industry in Nepal. Multilateral and bilateral agencies, international NGOs and community groups benefiting from donor support now make up an economic sector just like manufacturing, banking, tourism. The development industry employs people, transacts services, it carries ideologies, and politics are negotiated.
More than 60 per cent of Nepal's development expenditure comes from overseas development assistance, supporting basic services in health, education, water, sanitation, and infrastructure to benefit marginalised communities. More recently, the development industry has been playing a critical role in supporting demands for greater social inclusion.
Development organisations have been strategically empowering previously excluded communities to demand greater rights and recognition. However, it is also exacerbating existing development challenges and producing new forms of inequalities and exclusions.
The development sector is an important and highly sought-after source of employment for educated Nepalis. Jobs are well-paid and also include other benefits such as pension schemes, health coverage, education subsidies, training, or overseas travel. These are justified on the grounds of professionalising the sector and providing incentives to employees.
But the unintended side effect has been to diminish the Nepali state's capacity to compete, and to reduce its ability to attract and retain high quality human capital. The 'best and the brightest' have either been absorbed by the development industry or are constantly negotiating ways of benefiting from it. The ranks of bilateral and multilateral agencies are filled with government officials who have jumped ship.
The development industry also creates 'rents' for employees in the form of higher education overseas, travel to attend workshops and trainings, and consultancy opportunities for civil servants. This has altered the incentive structure in the government bureaucracy.
Rather than performing assigned responsibilities, many government officials are actively seeking ways of capturing rent. Mid and senior government officials at district and central levels often take unpaid leave to work as consultants in development organisations.
There has been a steady increase in graduate and post-graduate programs in development studies throughout urban Nepal. Their focus is not to critically examine the development sector from a multi-disciplinary perspective, but to produce effective and efficient development bureaucrats who are able to manage projects, or carry out monitoring and evaluation.
Students are trained to market themselves adequately for lucrative development jobs rather than to pass the government civil service exam. The glamour of a job in the development industry attracts students to these schools and perpetuates the view that government jobs are inferior.
The weakening of the state is a major development concern. As the political scientist Neera Chandoke has argued, it is after all the state that can 'emancipate citizens of the Global South from poverty and deprivation by widening the tax net, monitoring the collection of revenues and implementing schemes for redistributive justice by transferring resources from better to worse off sections of society'.
The development industry is also producing new inequalities and exclusions not just between 'Nepali nationals' and 'Nepali internationals', but between nationals and internationals. Senior decision-making positions within agencies are set aside for internationals. Nepali citizens are not allowed to compete for them, and have to work under the supervision of international 'experts', regardless of their qualification and experience.
This divide is reinforced by a significant difference in pay scale between national and international staff, which is particularly visible when Nepali staff and their international colleagues travel domestically: the subsistence allowance varies considerably.
Hierarchies within the development industry on the basis of citizenship are often justified on the grounds that international staff are more competent, have cross-country experience and/or are politically neutral. But the growing numbers of Nepalis with qualifications from leading universities question such justifications. Because of its command over financial and technical resources, the development industry can define what constitutes knowledge and creates a 'knowledge hierarchy'. In-depth understanding of the Nepali economy, society and polity are often relegated as secondary or peripheral to knowledge of global contexts.
The development industry is one of the largest and most influential actors in the processes governing the restructuring of Nepal. While it preaches equality and inclusion as a fundamental agenda for the new Nepal, its own day-to-day practices and polices couldn't be further from it. It is time that the Nepali state and society also hold the development industry accountable.
Bimbika Sijapati Basnett teaches at the Nepa School of Social Sciences and Humanities in Kathmandu.
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