9-15 June 2017 #862

Bringing aid back to basics

Nepal’s foreign donors can now go directly to the people through elected local governments
Dinkar Nepal
Subhas Rai


There is a widespread notion in Nepal that foreign aid in the last two decades has helped stoke social disharmony and ethnic tension. The government has brought this up with donors, pressuring them to channel aid away from sectors like democracy and human rights to infrastructure and development.

The agencies clarify that this is selfish cribbing of the traditional elite, and there is some truth in that. But large amounts of funding can be traced to direct or indirect support for individuals or organisations working towards ethnic causes.

Whether this support is principally wrong, and whether donors had ulterior motives for such an approach is a matter of deeper debate later. But assuming that much of the Aid Industry should be driven by humanitarian impulses and enlightened moral self-interest, the time is apt to suggest a course correction in the way Nepal gets its aid and where it is disbursed.

The 2015 earthquake was a good opportunity to re-orient foreign aid to make it more respectable and acceptable to a wide spectrum of Nepali people, but that did not happen. Not only have most donor pledges for reconstruction fallen short, but instead of strengthening the National Reconstruction Authority (NRA), donor agencies have been busy creating their own fiefdoms for short term glory.

Bypassing the NRA could be the result of a lack of trust in our polity, but there are not too many other examples of phenomenal success in the last 70 years of aid involvement in Nepal. Considering the total amount of money poured into Nepal over those decades in the name of aid, this is an astonishing failure. Aid has abetted a corrupt eco-system dominated by a selected few who align with whatever opinion foreign donors in Nepal hold at that particular moment. The misconceptions thus created and reinforced in the echo chamber is one of the causes of failure of many initiatives.

Eugene Bramer Mihaly, after studying the first 12 years of the aid industry in Nepal, wrote in his book Foreign Aid and Politics in Nepal (1965) that foreign aid programs were not successful because they were based on faulty foundations. One of the first scholars to research aid as a political tool, he concluded after studying results of the aid efforts by various countries like India, China, the US, Switzerland and Soviet Union between 1951–62 that the basic assumptions that guided aid-based interventions in Nepal were wrong.

‘Time and again, an apparent reason for a program’s failure was traceable to flaws in two conceptions that were the foundation and the framework of the majority of the aid programs,’ Mihaly wrote. The first of these was a ‘belief in the readiness of Nepal for social, economic, and political change’ and the other was the aid donor’s assumption that ‘the Nepal government was able and willing to administer development projects of considerable complexities’.

Mihaly proves his point by indicating the type of projects that were successful: the small and highly specialised projects of the Swiss like the dairy initiatives. His analysis that these efforts were effective because they did not depend on the Nepal people and the government could, however, be hotly contested today. There are many examples of aid that has worked because the government, especially at the local level, was involved.

About people, Mihaly writes, ‘Nepal at that time was not in the grip of a revolution of rising expectations. The majority of its inhabitants were unaware that a way of life different from their own even existed.’ And about the state of the government, he says, ‘Most donors eventually learnt through harsh experience that the government lacked the administrative capacity and the political will to govern.’

Things have changed. The aid industry has altered prescriptions many times over in the years that followed, but the insights Mihaly came up still remain broadly valid. Globalisation has ensured that Nepal is now in the grip of a ‘revolution of rising expectations’ and the new Constitution has created grounds for a local government which is compelled to deliver. This changed scenario brings governmental stability to the local level, thus making it possible to have long-term strategic partnerships between the municipalities and donor agencies.

The new local governments can now be the most effective vehicles to implement programs based on the Sustainable Development Goals of the United Nations. Most of the 17 goals fall under the exclusive rights and duties of local governments, which are best placed to implement them because of their proximity to the resources and people at the grassroots.

What is needed now is an immediate push for programs on governance, health, community empowerment and education in collaboration with the local governments. The technology and knowledge available to us today, the new system of local governance Nepal has entered into, and the fundamental changes in Nepali society as a result of globalisation can be put to use for constructive transformation. This is a golden opportunity for the agencies to get back to the basics of development assistance, especially to meet humanitarian needs.

Read also:

Living beyond one's means, SHYAMAL K SHRESTHA

The politics of foreign aid, SUNIR PANDEY

Visualisation: Nepal’s foreign aid policy, Bhrikuti Rai

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