KATHMANDU: With peace at sight at last, the country now seems to be moving ahead with economic agendas — that was at the back burner for long — and so are the country’s development partners.
“The country, in its shift from the traditional approach, will ask the development partners — both bilateral and multilateral — to support us for economic growth, employment creation and inclusive growth,” said finance secretary Krishnahari Baskota before flying to Manila to take part in the ADB meeting.
Similarly, Germany, one of the largest bilateral donors, that has been focusing on health, renewal energy and good governance, has also hinted at shifting its focus to job creation by strengthening the private sector. “Instead of local governance sector that is overcrowded at present, we are interested in supporting Nepal on youth employment by strengthening the private sector,” according to a source at the German aid agency.
The German government is holding a consultative meeting with Nepal in June, when it will officially discuss the new programmes,” the source said, adding that the discussion will be, however, endorsed in October.
Several other bilateral and multilateral donors including the US, the EU and India are supporting the country in strengthening the private sector to create more employment.
“As the peace process is coming to a logical conclusion, we are shifting our priorities in Nepal too,” the source added.
Nepal receives foreign aid from a diverse group of donors, including OECD-DAC donors, international financial institutions, the UN agencies, global vertical funds and providers of the South-South cooperation. “They made a total disbursement amounting to $1.08 billion in fiscal year 2010-11,” according to the
Development Cooperation Report 2010-11.
“Approximately 58 per cent of the resources came from multilateral donors, while 36 per cent came from OECD-DAC bilateral donors and over six per cent from bilateral South-South cooperation partners,” the report stated, adding that Germany contributed 2.5 per cent to the total disbursement.
Similarly, the top five multilateral donors were the World Bank Group ($256.1 million), Asian Development Bank ($184.4 million), UN Country Team ($112.5 million), EU ($42.4 million) and Global Fund to fight AIDS, Tuberculosis and Malaria (GFATM) ($19 million) last fiscal year, it reported.
“About 70 per cent of the foreign aid was disbursed for on-budget projects,” finance secretary Baskota said.
However, the Herfindahl index for donor portfolios is generally low, with only one third of donors achieving a score above 0.3. “For donors with an annual disbursement volume of over $10 million, the best performers are Korea, Germany, India, GFATM and the EU,” the report said, adding that the Herfindahl index is the sum of the squares of the ‘market shares’ of the various projects in the portfolio. “If the result is close to one, the portfolio is very concentrated, whereas the result close to zero means the portfolio is very fragmented.”
Nepal received the largest amount of foreign aid in the education sector in the last fiscal year. “Four sectors — education, local development, health, and road transportation — received more than $100 million each in the last fiscal year,” the first report on foreign aid for fiscal year 2010-11 stated.