Confused donors

Once a conflict is over, aid agencies seem paralyzed. Instead of sending help, they send study groups. There is often a lag of years before moving from humanitarian relief to real economic development. By the time such help actually arrives, it is often too late: war has been re-ignited," said Jeffrey D Sachs, an influential economist, about post-conflict countries. His perception has become painfully familiar to Nepal. This was the message that came from the two-day Nepal Donor Consultation Meeting that concluded in Kathmandu last Friday. The government expected the aid agencies to fork out substantial amounts of money to boost the economy in the post-conflict scenario, while the donors gave the message that they were unwilling to support economic reconstruction until there was complete political stability and full democracy, from the local to the central levels.
The donors' rebuff seemed to show that they didn't realize that Nepal could not afford to wait in addressing the immediate development and economic challenges to keep the hard-earned peace. What is the use of the aid after the scenario that the donors desire emerges? When there is functional democracy and complete political stability, the government does not need to depend on aid. At that time, the confidence of the private sector will have been high, and their investments can be channeled into reenergizing the economy and creating new jobs. It is right now that the government most urgently needs the support of its development partners to fulfill the people's expectations and aspirations. On the other hand, the donors did not systematically distinguish post-conflict settings as it requires a distinctive approach. They didn't know that it should not be simply development as usual. The donors talked about helping the fragile peace process, but no concrete effort was initiated. It would have been generous and a real support for the peace process if the donors had come up with proposals and assistance to accelerate the pace of development and growth through quick-impact programs.
Look at the ground realities. The adverse economic situation, a painful consequence of the war, is obvious. Capital — physical, human and social — has been destroyed. And Nepal's ability to rebuild itself is limited by weak institutions, scarce human and financial resources and economic fragility. Under these circumstances, financial support from the international community appears to be the only chance for Nepalis, who are dazed and bereft of hope, to mend their lives. The government also has to play its part perfectly. The implementation side should be strengthened. Improving the morale of the private sector, expediting reforms to improve the business environment including the functioning of state mechanisms, greater accountability, transparency and fighting corruption are some things that the government must not overlook. With better policies, better priorities for reform and bigger and better-timed aid, it is possible to restore the post-conflict economy considerably and more rapidly.

Source: The Kathmandu Post, February 25, 2008