1. Home
  2. Asia
  3. Nepal

Donors remain committed

[Nepal] Conditions at IDP camp near Nepalgunj. IRIN
Many parts of the country depend entirely on external support
Since the king of Nepal imposed direct rule on the country in February, serious concerns have been voiced over whether donors would withdraw aid. But donors have moved to allay such fears, saying that they will not put pressure on an impoverished and excluded population who are in desperate need of help – particularly in rural areas where they rely entirely on external support. King Gyanendra Bir Bikram Shah took control of the country on 1 February and declared a state of emergency after dismissing the multiparty government, which the king blamed for failing to hold elections or talks with the Maoist rebels whose armed conflict has led to escalating violence and killings. Since the king took over, donor agencies have met on a regular basis to assess whether to continue or suspend their assistance to Nepal. The Swiss development agency, SDC, and the Danish aid agency, Danida, were the first to announce that they would suspend their bilateral aid but their support for the Nepali people would remain intact. “Our position continues to be that we will not be signing any new project or programme agreement with the government until further notice. The Danish-funded activities under revenue administration support projects have been suspended and preparations for planned activities have also been suspended until further notice,” Martin Hermann from the Danish Embassy in Kathmandu told IRIN. “But our support for the work of non-government organisations and civil society has not been directly impacted by the government's move," he added. Denmark has provided US $25 million in annual assistance to Nepal for good governance, education and rural development over the past two years. Working in Nepal since 1951, SDC gave around $17 million in 2004 in support of infrastructure development, natural resource management, occupational skills, good governance and peace-building initiatives. More than 70 percent of SDC’s activities are in rural areas. SDC fears that the emergency, coupled with Maoist insurgency, has made its main partners — the community-based organisations — face extreme difficulties carrying out their activities. One of biggest donor agencies, the UK Department for International Development (DFID) wants to take time to assess the full implications of what is happening in the field. “It would be wrong to take early decisions or make judgments based on incomplete analysis,” Robert Smith, deputy head of DFID, told IRIN. “There are thousands of poor and excluded people who are depending on support from DFID and other external partners. Nobody wants to put them under even greater pressure,” Smith added. Meanwhile, multilateral organisations like the World Bank and the Asian Development Bank (ADB) have been forced to defend their positions after conflicting reports in the local media. The World Bank was reported to have suspended $70 million after the king’s move on 1 February. But the bank had already announced in December that it was postponing its aid for the proposed Second Poverty Reduction Support Credit until the government implemented the agreed reform measures. Among the four reforms, the former government was able to implement the most difficult task: the adjustment of oil prices to international levels and the introduction of an automatic pricing mechanism. But it failed to implement the less difficult ones: action against willful defaulters, introduction of the governance act and the introduction of flexibility in labour laws. “The aid was not suspended in relation to the political situation. Our message to the new finance minister was not different from what we had told the former one before the change in government on 1 February,” Rajib Upadhya from World Bank told IRIN. The ADB was reported as pledging new assistance of $121 million to the new government. But the ADB explained that the aid was already committed in October 2004 in its new country strategy and programme in Nepal. “In view of the recent political and security developments in Nepal, the ADB is reviewing the implications for its operation in Nepal. Because of the security situation, we have not been able to fully assess the impact of these recent developments on the implementation of the ongoing ADB-supported projects in different parts of the country,” S Hafeez Rahman, country director of the ADB, told IRIN. Several donor agencies take a similar line. They want to first make an independent assessment about the realities on the ground, especially with regard to safe working conditions for development workers based in the villages. A consortium of donor agencies recently published a full-page notice in a national daily about their basic operating guidelines to explain to both sides of conflict, the state and the rebels, about the role of development and the responsibility of field workers. "It’s vital that both sides to the conflict understand the impartiality of development support and the need to protect the space for development. We have made clear to the government that we will have no option other than to withdraw support should our assessment be that the risks to staff are too great" DFID’s Smith said. He added that both parties to the conflict should recognise the vital need for development support to “continue and to work with us to ensure that this vital work can carry on with the minimum of risk to staff safety.” The guidelines were especially aimed at explaining to the rebels that aid personnel cannot make donations or sign agreements with Maoists. The rebels have demanded that all donor agencies and international NGOs register with the Maoists and pay donations to work in the rural areas. But there are some who believe that donors are not making enough efforts to influence the new government to take positive steps. “In a fragile state like Nepal, the bilateral donors have enormous influence and if they use it in a right way that will be good for the people, who should not suffer from whatever decisions are taken politically,” said a source close to donor representatives. “There is a fine line between politics and economic development and these two should not be mixed and confused,” he added. There are hopes that the donors, especially the multilateral agencies, will not make rash decisions because most of their priorities lie in humanitarian assistance of the most needy Nepalis. Their concern is, however, for the safety of their own field staff. “DFID wants to remain engaged in supporting efforts to reduce poverty and discrimination in Nepal but the operating environment is deteriorating. The criteria for decisions on continuing DFID engagement centres around the safety of field staff and an assessment of our continued capacity to make an effective contribution to poverty reduction," Smith said.

This article was produced by IRIN News while it was part of the United Nations Office for the Coordination of Humanitarian Affairs. Please send queries on copyright or liability to the UN. For more information: https://shop.un.org/rights-permissions

Share this article

Get the day’s top headlines in your inbox every morning

Starting at just $5 a month, you can become a member of The New Humanitarian and receive our premium newsletter, DAWNS Digest.

DAWNS Digest has been the trusted essential morning read for global aid and foreign policy professionals for more than 10 years.

Government, media, global governance organisations, NGOs, academics, and more subscribe to DAWNS to receive the day’s top global headlines of news and analysis in their inboxes every weekday morning.

It’s the perfect way to start your day.

Become a member of The New Humanitarian today and you’ll automatically be subscribed to DAWNS Digest – free of charge.

Become a member of The New Humanitarian

Support our journalism and become more involved in our community. Help us deliver informative, accessible, independent journalism that you can trust and provides accountability to the millions of people affected by crises worldwide.

Join