Over the past 50 years, Nepal has received over USD11 billion in foreign aid.Today, almost 50 bilateral and multilateral donor agencies and more than 100 INGOs regularly provide aid to Nepal. International aid accounts for the majority of the national development budget whereby Nepal is dependent on aid (loans and grants) for basic service delivery, social and economic infrastructure development.Nepal remains, however, one of the poorest countries in South Asia, with over one quarter of the population under the poverty line and huge swathes of the country food-poor.
With the potential historic signing of the peace deal between the Seven Party Alliance (SPA) and the Maoists (CPN-M) any day soon, aid is likely to flow fast in high quantities to Nepal.The interim government, which from 1 December 2006 is due to include the Maoists, is developing a three-year interim development plan that will invite donors to increase their contributions, as reward for and in support of the consolidation of peace in the country. This is due to be finalised in December and to be shared with donors in January to garner their commitments during the National Development Forum (NDF), expected in March 2007. The NDF could be a key juncture in the development of future aid strategies of Nepal—with crucial implications for Nepal’s future stability and development.
This paper aims to provide a think-piece for how donor strategies might respond in support of Nepal’s future prospects for sustainable peace. It does this recognising that Nepal is still suffering from the causes and consequences of 10 years of debilitating violent conflict and a history of multiple, parallel governance systems (i.e., State, Maoists and (I)NGOs). The paper is based upon four key arguments:
- Donors must take the context as the starting point for all interventions, the first of the OECD DAC Principles for Good International Engagement in Fragile States (see section 1.1);
- Caution should be taken in planning and implementing aid strategies based on traditional aid paradigms that are straight-jacketed by internationally-set targets (see Section 1.2);
- Traditional post-reconstruction templates should not be applied to Nepal without inclusive assessments of the needs of Nepal (see Section 2); and
- Donors can positively support peacebuilding in Nepal through articulating these three arguments and promoting alternative conflict-sensitive mechanisms and processes to their headquarters (see Section 3).