Is Foreign Aid Necessary

Sunil Poudyal

Nepal?s dependence on foreign aid has always remained more than 50 per cent of the annual budget with some exception. The donors also never bothered to study whether the aid reached among the target group or not. It has also been found that the extreme dependency of the recipient country of the aid leads to the it plunging into the deepest pit of corruption. Nepal is no exception in this regard. Besides, the provisions set by the donors are so complex, especially for poor and strategically weak countries, that the recipient can hardly secure her people?s interest and/or sovereignty.

Graft

Right from the beginning of the process of aid, the network of commission starts being framed. There is also the donor?s domination and direct/indirect intrusion within the realm of freedom of the recipient. The recipient country has to satisfy the intermediaries, agents as well as some officials of the donor country or organization. The donor imposes on the method of the utilization of aid amount, ways to implementation the project, recruitment of advisors and most of the top level officials, procurement of machineries, equipment and logistics etc. This is rather unfortunate but a reality.If the administrators are visionary, sincere, dedicated, honest, confident, determined and if they have integrity, Nepal does not need any donor to help for its development. But we should hurry to stop the dependency on aid because its addiction to our economy is so severe that haste in this direction can ruin the economy. It should be decreased gradually to zero level within a few years. No country can remain aloof in the modern world. All the countries in the globe are interdependent. But interdependence and domination are two different things. Nepal holds nature?s blessings no less than other countries in the globe, though the type might be different. Until about two decades back we used to export bricks, cement, bamboo shoots, sugar, rice, floor etc to Tibetan Autonomous Region of China. There was also a time when we had exported timber to the then USSR. We have been exporting carpets, garments, herbs etc to foreign countries; the volume of exports fluctuate affecting the foreign earnings because of some problems including the lack of consistency in national rules and regulation.. If we pay due attention to make our policy, quality etc compatible to exploration and expansion in our foreign trade, we do not have to worry much to make the balance of payment favorable. Nepal is said to be a country with the second highest hydropower potential in the world. There is no doubt that if we go for mega hydro projects, they depend on foreign aid. By developing water resources for generating power, it can also be exported to India. It needs huge investment either through foreign or loans. However, the buyers are limited and Nepal has to abide by the conditions imposed by them. Therefore mega projects do not seem to be feasible for the country. Attracting foreign investments for joint ventures or national industrialists for medium scale hydro projects might be suitable for the country as power can be sold at the local markets. However, we should not forget to target our neighboring countries also to cash in on the surplus power, if any, provided the agreement is beneficial to us. It would be contextual to note that mega project of any kind is unsuitable to us considering the huge investment on imported resources and raw materials and equipment and because of transit problems.

It is advisable to also encourage small investment for micro scale hydro projects and other sectors. Again we should always remember that our policy and facilities guaranteed to the entrepreneurs should be reasonable, consistent and compatible to the interest of the country. If we develop hydro power project extensively, we can develop cable cars and rope ways facilities, extending them, especially, in the remote areas. It will also contribute much to solve the grave problem of irrigation and drinking water facilities.. It is worth remembering that the construction of is very expensive together with a big sum required for regular maintenance in comparison to cable cars and rope way system. The degradation of the environment is another curse that the land routes invite. Similarly, soil erosion, land slides and pollution that land routes initiate naturally causes extra burden on the national purse and hampers the life of human beings and the flora and fauna. Besides, regular import of means of transport and accessories is another big burden that the country has to face. The ropeway system help create market for the products of remote areas to cities and vice versa and the cable cars; to boost the tourism industry. The ridge, vivid impression of nature, the diaphanous landscape, the rock band, varieties of climate, unfathomable precipices, the flora and fauna, varieties of birds and animals (some rare in the world), varieties and colorful insects and butterflies, rivers for rafting, places for gliding and bungee jumping etc are the things which can tempt not only foreign tourists but also the domestic ones. The development of tourism will initiate the expansion of inns, hotels, restaurants, rest houses etc with the utilization of local materials.

Prosperity

If we cast our eyes from the east to the west of our country, some areas in the hills are very much favorable for grazing, cattle and sheep farming, dairy industry, fodder etc. Similarly, some areas are very promising for various fruits and vegetable, and some areas for forest products like Bijayasal ( Tacocarpus Marsupium). If these could be harnessed properly some of them can be exported to earn foreign currency. All these activities mentioned also help generate opportunities of local employment which naturally support to increase per capita income of the country. These all show that Nepal can not only survive without aid but also can prosper.

Source: The Rising Nepal, August 6, 2007