Less than a week after Finance Minister Madhukar SJB Rana announced this year’s budget drawing too heavily on foreign aid, Norway, one of Nepal’s key development partners, has withdrawn its financial support from the Melamchi Water Supply Project (MWSP) along with a 10 per cent cut in its aid to Nepal next year. Without the $28 million that Norway agreed to provide for the construction of the 26.5 km long diversion tunnel from Melamchi River to Sundarijal, the future of Melamchi exercise as a whole is now in doubt. That is not to say anything about the row over contract bidding of an adit access road which the RCCC says was fraudulent and was affected during former PM Sher Bahadur Deuba’s tenure — an allegation the ADB has dismissed as unfounded. Even though MWSP is supported by several other agencies, the Norwegian pullout will have others rethink their aid strategies. Additionally, the aid withdrawal translates into suspension of $2.25 million even though Norway’s on-going commitments to the education sector will remain unaffected.

Norway has linked the backout to the “serious set back to multiparty democracy and human rights” in Nepal following the February 1 royal takeover. The decision will be reconsidered only when concrete steps are taken to re-establish multiparty democracy, improve human rights records and begin peace dialogue. The government’s actions have however not helped people and the international community to remove doubts. There has been a steady slide in rights records, press freedom and democratic credos in the country. The police baton charging the unarmed political activists, cancelling provisions for pension for a section of new entrants to civil service, for example, has eroded confidence of even the most incorrigible of optimists. And the government’s unpopular action is only deepening the chasm between the political forces and the State. The vibes so eagerly awaited at home and abroad for reconciliation among all the political forces are yet to be felt. Norway has been one of the firsts to feel the void. If others follow suit, the finance minister’s predictions would go haywire and the economy will head for a tailspin. The priority for the government, therefore, is to restore democratic credibility and find a way out of the morass that the country is presently stuck in.