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A wide cross section of Nepali public opinion debated the under-performance of foreign aid in the development of their country at a well attended public discussion in Kathmandu on December 17. The event, "Assessing Aid and Development", was jointly organized by the Kathmandu Offices of the World Bank, the Asian Development Bank, the United Nations Development
Program and the Department for International Development of the United Kingdom.
The discussion was held in preparation of the March 2000 Nepal Development Forum, with participation by a number of senior government officials working on a set of foreign aid policies for discussion with donors at the Forum.
David Dollar of the Bank's Development Research Group set the tone for the day's discussion with a presentation on the findings of the 1998 report, "Assessing Aid - What Works, What Doesn't and Why". Dollar said Nepal's development experience with foreign aid reconfirms the report's message that large aid flows in an environment of weak policy, do very little to spur growth and invariably result in little sustainable impact on the ground. Citing examples from around the world, he said the sequencing of foreign aid is often more important to accelerating reform and poverty reduction than the actual volume of aid.
Dollar provoked a hearty debate on the issue of donor conditionality. "Contrary to general perception, donors cannot dictate policy. Nor can they dictate public expenditures," he said. "Aid works best where societies have built a consensus around their development and resource needs. Some of the best examples in aid effectiveness come from countries that have stood up to donors to say that foreign assistance is unwelcome in non-priority areas." Dollar made these comments as Nepal's Parliament was sitting in Special Session to debate the politically charged issue of utility tariff hikes, widely attributed to "donor conditionality".
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Dollar's opening was followed by two more presentations by Nepali researchers. Shriram Raj Pande of New ERA and Keshav Prasad Acharya of the Citizens Poverty Watch Forum narrowed the discussion down to the specifics of foreign aid in Nepal's development agenda. Together, the three presentations stimulated a candid discussion on a wide range of issues - from public cynicism in aid-giving countries to weak political commitment and ownership of donor funded programs on the part of recipients; corruption, low capacity and faltering motivation in government implementing agencies; and lack of transparency, coordination and realism on the part of donors. The panelists and participants included grassroots development workers, NGO representatives, trade union leaders, private sector representatives, senior government officials, the political opposition, development planners, professionals, donors and journalists.
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"It is clear from today's discussions that there are two Nepals," said Kunda Dixit, a prominent journalist and moderator at the discussion, wrapping up the event. "One is the jaded, cynical and apathetic people of Kathmandu. The other Nepal is the one of accountable, committed and visionary elected leaders at the grassroots. If donors and governments want to make aid more efficient, it is clear where the money needs to be spent - outside the valley in supporting newly empowered people of this New Nepal. That way we will get more bang for the buck," Dixit said.
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Meanwhile, Hans Rothenbühler, the Bank's Country Director for Nepal, in a year-end memo to colleagues in the Nepal Country Team, writes: "The debate about Nepal's development challenges has become much more frank, and thus potentially productive. Of course, better dialogue, more honest acknowledgment of the
issues and willingness to admit one's sins may just become another ritual of sanctimonious breast-beating
and will not get the poor of Nepal
out of their misery, unless it is eventually followed by action. …After decades of rather patronizing 'sweet talk' by donors to our Nepali partners, some hope may be permitted if we all are finally willing to speak openly about the issues. Because without admission of the problems, there surely will be no solution to them..."
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