Kathmandu, February 3:

Government has unveiled a draft of the new Foreign Aid Policy, which seeks mobilising foreign assistance to address post-conflict development challenges and the new dimensions emerged, especially after Jana Andolan-II. It also emphasises for effective implementation and harmonisation of foreign aid with respect to better utilisation.

Presenting a draft of the policy, Krishna Gyawali, joint secretary at the ministry of finance, informed the proposed policy envisages dealing with new socio-economic dimensions, new goals and development priorities, emerging national and international trends.

“The new policy is intended at streamlining foreign aid. It tries to address the emerging trends of peace, democracy and development that need to be entwined simultaneously,” said Gyawali, who also heads the foreign aid coordination division at the ministry.

It seeks to create channel for increasing resources on priority sectors to accelerate development, create an enabling environment for attracting FDIs and private capital inflows as well as enhance the nation’s capability to envision, implement and sustain development programmes.

“It will not only replace the Foreign Aid Policy 2002, but it will also bring about some major departures such as widening its scope to other pertinent issues like trade, private capital and some social aspects,” reads the draft. The role of foreign aid has seen as an enabling and facilitating factor for development rather than a substitution. Stating major changes in new policy, Gyawali said that the proposed policy tries to interweave peace, democracy and development. Some of the major departures of the new policy include its attempt at addressing the new context, particularly the post conflict transition and fulfilling people’s growing aspirations, new challenges such as inclusion, equity, state restructuring and using alternate services.

A national plan of action on aid effectiveness will be developed and adopted by the government and donors that will show a roadmap for future foreign aid management in the spirit of Paris Principles of Aid Effectiveness, said Gyawali. The objectives and strategies of the Three-Year Interim Plan have been taken as the guiding principles. It also emphasises to mobilise private sector to ensure the best use of foreign aid and build a system to monitor aid information. It encourages mutual accountability and transparency with focus on harmonisation at the local level.

Former Chief Secretary Dr Bimal Prasad Koirala stressed the need of streamlining foreign aid coming to the country in whatever form. He also said Nepal should rise from accommodative to collaborative stage in terms of aid utilisation. “Though aid recipient countries should be more assertive, at least we can be collaborative at this stage,” he added.

Bella Bird, chief of DFID Nepal Office, pointed out the need to have a strategy for the best

usage of aid, ensuring benefits would go for the targeted beneficiaries. Calling for a strong

government leadership, she said that sound policies have also yielded poor results due to weak implementation.

Prof Dr Madan Kumar Dahal said that Nepal needs to enhance capacity to campaign for more foreign aid, as Nepal’s over 55 per cent development expenditures are financed by aid. “Nepal needs more foreign aid to revitalise current sluggish growth in the pretext of critical political juncture capsulated by uncertainty,” he said.

Mathew Kahane, resident representative of UN Systems in Nepal, stressed the need of harmonising foreign aid to spend through one consolidated channel. He suggested to incorporate social and human rights dimensions, while formulating the policy.