The Maoist insurgency has created unprecedented crisis in implementing development projects in Nepal. The effective implementation of the Millennium Development Goals, Sustainable Development Agenda of Nepal and the Tenth Plan/PRSP in the present situation to achieve the four pillars envisioned by the plan — broad-based economic growth, effective service delivery, social and economic inclusion of the excluded, and good governance — are extremely difficult. Therefore, if Nepal has to continue development activities, it needs to adopt ‘conflict sensitive approaches’, which encompass policies, strategies, methodologies, procedures and abilities of development organisations to work in the context of conflict.

It is unrealistic to anticipate unhindered implementation of development programme at the time of conflict. However, it is possible to do better than what we are doing now and to maximise the potentials and minimise the risks if they are operated in a conflict-sensitive way. Experiences of the conflict-ridden countries have demonstrated that development activities can be continued even in the situation of conflict, if development modalities are conflict sensitive. Nepal’s experiences also show that it is possible to continue development activities if they are transparent, need-bas-ed, directly benefiting the poorest and the marginalised. Those projects, wh-ich are supported by the community, which recruit local people, whose activities are neutral, transparent and provide benefits to the poorest of the poor, are facing fewer obstructions in implementation.

There are growing arguments that development through NGOs is only the best option at the time of conflict. But such generalisations do not help. A phenomenon of creating NGOs at the district headquarters by the internally displaced elites is developing. However, the insurgents severely oppose their activities at community level and consequently these NGOs have to concentrate on district headquarters. Maintaining transparency is one of the main principles in operating development at the time of conflict. However, a serious concern is the transparency of development projects on expenditure patterns. Another concern is resources consumption pattern in donor funded projects. More amounts are often spent on administrative and personnel overheads than the amounts that go directly to benefit the people and address the root causes of conflict.

The guiding framework of development implementation so far is ‘target achievement’ which seems conflict-blind. One of the main concerns of implementing agencies is to have a new arrangement of flexibility to decide, adjust or change the content of development activities making them respond to local needs.

Conceptual orientation of development projects in the context of escalated conflict has to focus on ‘holistic human security approach’, which ensures social, economic, political, cultural, environmental and ecological dimensions. The basic operating principles of development projects should be flexibility and diversity, transparency, accountability, working with the socially excluded, the marginalised and the poor. If development projects apply conflict sensitive planning, implementation, monitoring and evaluation processes in their project cycle, development is possible.