9-15 May 2014 #706

Visualisation: Nepal’s foreign aid policy

Bhrikuti Rai

Nepal’s new foreign aid policy will have to balance urgent infrastructure investment with the need to invest in the social sector.

Text by: Bhrikuti Rai

A year after the government started showing rare firmness with donors about where it wanted foreign aid to go, it has finished drawing up a new aid policy to lay down the rules. The NC-UML coalition government wants to ensure that foreign aid directly contributes to economic growth and job creation through investment in hydropower, highways and other infrastructure.

The government’s new Development Cooperation Policy 2014 will replace the existing Foreign Aid Policy 2001, and will address aid fragmentation by focusing a large proportion of foreign aid on infrastructure, agriculture projects and less on human rights, democracy, inclusion, and constitution writing.

Madhu Marasani of the Finance Ministry’s International Economic Cooperation Coordination Division recently released the Development Cooperation Report 2012-13 which stated that more than one-third of the $960 million foreign aid to Nepal through 580 projects last year bypassed the government’s budget. The government hopes that the new policy will direct most aid monies through the budget process.

Read also:

Knowing how to ask for help

Politics of foreign aid

Rules of engagement

Trade of Aid

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