NATIONAL 5 (Spotlight Weekly)]

'Nepal Is The Largest Per Capita Aid Recipient In south Asia'
— SUE WARDELL

Sue Wardell is Head of the UK's Department for International Development - DFID - country office in Nepal. The office was established a year ago to manage UK assistance to Nepal. Sue heads a team of UK professional advisers and administrators and Nepalese Programme support staff. She has worked for DFID in the UK and South Africa and has also worked for the UK NGOs Save the Children and VSO. She spoke to KESHAB POUDEL. Excerpts

What are the challenges of Development in Nepal - is it working?
It is very easy to point to failures of development in Nepal and to ignore the fact there has been progress. In particular one needs to take into account that given its land-locked and difficult terrain development projects are inherently more costly, complex and take longer to implement.. Some of the achievements include increases in literacy; reduction in infant mortality, better access to health services. However the fact does remain that nearly half the population are below the poverty line. That the benefits of development are not equally distributed geographically and between different groups of people, gender disparities are particularly acute. Also given that Nepal is the largest per capita aid recipient in South Asia people rightly question why there has not been more sustainable progress. Nepal is one of the worldís poorest countries.

A concern I have is that too much energy is expended on focusing on the failures of development in Nepal rather than trying to find positive ways forward to make a difference. Clearly it is important to analyse factors that have stopped effective development but equally it is important to look at what has worked and why and try to learn from that.

What should donors do differently?
Donors, including the UK, bear part of the responsibility for Nepalís limited progress over the past 30 years. Too little attention has been paid to thinking about outcomes and impact of donor funded programmes. Co-ordination has been weak, donors have concentrated on their individual project portfolios which have little national ownership, rather than contributing to overall sector reform. There has been a tendency for donors to impose their own problem analysis and to bring in blue print solutions so there is a lack of ownership. There has been a lot of imported Technical assistance which is expensive does not utilise local capacity and has constrained transfer of knowledge and skills. Donors have often competed with each other and on occasions provided contradictory advice to government. Conditionally which donors apply to try to improve effectiveness and sustainability can be seen as infringing on the countryís sovereignty.

I do however think the situation is changing. I found on arriving in Nepal that the donor community, under the leadership of UNDP and the World Bank were seriously trying to address some of the problems of aid co-ordination. A number of donor co-ordination groups have been established that are actively seeking to improve the overall impact of development assistance and to address some of the concerns about competition, conflicting advice and in particular to move towards more joint programming that reduces the burden on government of administering a myriad of individual donor projects.
What can Government Do?
To an extent it is the stateís ineffectiveness that has caused donors to work in this manner. So whilst donors bear part of the responsibility for the slow progress of development in Nepal the key constraint is the lack of effective Government leadership of the overall development agenda and weak governance.

Governance is important. Better governance can improve the rate of economic growth, the effectiveness of services, the safety and security of citizens, and can ensure that the benefits of these improvements go to those who most need them. The key constraint on Nepalís development over the last few decades has not been lack of financial resources; while mobilization of domestic resources has been quite low, generous foreign aid has more than made up for such financing shortfalls. However, the government has wasted a high proportion of its expenditure. Good governance is critical in maximizing the impact of the public services that the government provides and in encouraging private investment. Weak governance has many undesirable outcomes, such as corruption and weak public sector institutions which cannot carry out their basic functions. This leads to serious shortcomings in the allocation and use of available resources, whether public or private, domestic or foreign.

There is evidence of growing donor fatigue and disillusionment with the slow pace of development in Nepal. In a situation where there is increasing competition between countries for limited donor aid the Government cannot afford to be complacent. The availability of donor assistance to Nepal is likely to be increasingly influenced by the effectiveness with which such assistance is utilised.

It is not surprising therefore that Governance is a key issue for discussion at the forthcoming Nepal Development Forum in Paris in March.

What can DFID do to the improve the situation?
On our own we can do little. But with strong Government leadership we along with other donors and civil society can contribute to the overall development of Nepal.

We need to change our approach. One of the reason for establishing the office in Nepal was to improve the way we worked. So that we could gain a better understanding of the challenges of development in Nepal, build stronger partnerships with Government, other donors, civil society and the private sector in working together to achieve the ambitious goals set out in the 9th plan. We want to move from funding our own individual projects to investing in major sectoral reform programmes that are likely to have more impact on poverty in the longer term. But we can only do this if the Government takes the lead in pushing through the reform agenda, ensuring resources are allocated according to agreed sectoral priorities and addressing constraints of Governance that impact on the effective mobilisation and utilisation of domestic and foreign resources.

What do you think the Development Forum in Paris will achieve?
This is the first Development Forum in 4 years. It will hopefully provide an opportunity for frank exchange between donors and Government on the short-comings on both sides that have meant aid has not been as effective as it might have been in tackling the development challenges facing Nepal. To a large extent a successful outcome is dependent on the Government demonstrating both a willingness and ability to address factors that have contributed to failures of the past.

We see the forum as part of a process, a key challenge will be to ensure that there is a wider public debate in Nepal on the outcomes agreed. And that practical, achievable plans are put in place.

What are the areas where DFID is involved?
Our Country Strategy was agreed by our Secretary of State Clare Short in November 1998. The overall Goal of our strategy is to see a significant reduction in poverty in Nepal and measurable progress towards achieving the international development targets such as universal primary education, progress towards gender equity, reduction in child and maternal mortality rates, and access for all to quality primary and reproductive health services.

Priority areas for UK assistance to Nepal are: Better Governance, Human Resource Development focusing on Education and Health, and improving Rural Livelihoods.

What Amount of Resources are available?
Last year we spent just over £17 million and we are committed to similar levels this year.

We can spend more but as Clare Short explained when she visited Nepal increases in UK aid depend on effective utilisation and genuine progress toward achieving the International Development Targets.

Is it be possible to reduce the volume of foreign aid to this country?
There is possibly too much pre-occupation with the volume of aid rather than aid effectiveness. If as I said earlier the Government can take leadership of the development agenda and donor assistance is in line with Government priorities this assistance can be useful. But in more directly answering your question I agree with the conclusion of the World Bank Public Expenditure Review that there is little doubt Nepal will continue to need donor support for a while.

To reduce this requirement in the longer term the Government will need to take action on reforms to both increase revenue and to reduce inefficiencies and wastage of public resources. The government needs also to take the lead in promoting a strong environment for private sector investment.