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Kathmandu Friday January 25, 2002 Magh 12, 2058.
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Newly issued FAP discussed
Post Report
KATHMANDU, Jan 24: In the second last pre-NDF
(Nepal Development Forum) consultation meeting held here today, experts deliberated on the
newly issued Foreign Aid Policy (FAP) by the government.
Presenting a paper on the policy, Dr Bimal
Kiorala, Secretary at the Ministry of Finance, said that the policy has been brought to
strengthen the government–donors relations to enhance the outcome of the donor-funded
projects effective technology transfers.
He also said that Nepal is compelled to seek and
accept aid to bridge the gap between revenue and expenditure. He added that conflicts in
interest between the government and the donors do arise at times.
"In some cases, donors funding do not match
the local demand, resulting in low outcome of the projects," he said.
He also said that cost and time overrun and the
huge gap between the donors’ commitment and actual receipt are the some of the main
problems faced by development projects. He also warned that soaring debt could one day
bring a major problem to the economy.
Admitting that are some serious lackings
resulting in the poor performance of projects, he said that government has come up with
reform programmes aimed at optimal utilisation of resources by controlling misuse of
funds.
Presenting the donors’ prospective on the
FAP, Ingrid Otstad, Ambassador of Norway to Nepal, said that the donor community warmly
welcome the policy that redefines the relationship between the government and donors.
She said donors’ participating in the
consultations on the Tenth Five Year Plan (TFYP), the Poverty Reduction Strategy Paper
(PRSP), and the Medium Term Expenditure Framework (MTEF) would promote transparency. TFYP,
PRSP and MTEF are the main documents that the government would present at the NDF meet
scheduled for February 4-7, 2002.
She also said that donors fully support the
government documents and will review their assistance strategies in line with these
frameworks. "The donors will take specific steps to eliminate corruption and misuse
of funds in the donor-funded projects," she said.
Stressing that Maoist insurgency may be a
reaction against poverty, unemployment, poor public services and corrupt practices in
rural areas, she said the donors are considering for short-term support to the government.
Commenting on the paper, Dr Dilli Raj Khanal
said that though foreign aid plays an important role in stimulating development
activities, the government’s growing dependency on foreign aid in recent years is of
prime concern.
He also said that the government has failed to
control non-development public expenditure and urged for corrective measures in that
direction.
He said that the government should speed up the
decentralisation process to maximise the participation of the beneficiaries by involving
them in the decision-making process.
Dr Shankar Sharma, Member of the National
Planning Commission (NPC), expressed concern over the declining flow of aid and growing
competition among the poor countries to attract aids from developed nations. He stressed
that Nepal should concentrate on optimum utilisation of the available funds.
"Some of the projects funded by donors do
not match with national priority while conditions set by them in some are
unpractical," he added.
Kamal Thapa, leader of the Rastriya Prajatantra
Party, said that greater decentralisation is the best way to ensure proper utilisation of
foreign aid. He also said that the government should also take step to correlate various
programmes of NGOs and INGOs with the national priority projects.
Kenichi Ohashi, country director of World Bank,
said that MTEF is a step taken in the right direction, which will speed up effective
implementation of various anti-poverty programmes.
He also admitted that there have been some
shortcomings on the donors’ part, particularly in institutional building. He also
urged that the government should not undermine Technical Assistance as it brings valuable
knowledge, which is often more important than money.
Speaking from the chair, Finance Minister Dr Ram
Sharan Mahat expressed satisfaction over the initial response of donors on the newly
issued FAP.
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