REPUBLICA, 5-Feb-09
The country director of the Nepal Resident Mission of Asian Development Bank (ADB) Barry J. Hitchcock said despite the global down turn, Nepal will see a 3.5 percent growth rate this year.
“Given the economic performance of Nepal, we have expected that Nepal’s economic growth would hover around 3.5 percent this year. However, the growth depends on what will happen in the agriculture sector, the main stay of Nepal’s economy,” said Hitchcock, while delivering a statement about the ADB-financed projects during 2008 at a press conference on Thursday.
Answering queries about future assistance to Nepal, Hitchcock said that the ADB would double the volume of its assistance to more than US$ 200 million each year in the next two years, including 2009, where the ration of grant and loan will be equal.
“However, the future assistance will be based on the performance of Nepal in implementing the development programs,” Hitchcock said.
The ADB had approved the grant assistance of US$ 8 million and US$25 million for the education sector, and information and communication development.
A grant of US$ 106.3 million was approved for the development of local governance and community development.
The ADB office’s mission statement issued during the press conference stated the portfolio for Dec 31, 2008 comprised of 18 loans worth US$586 million net, 10 investment grants worth US$ 332 million, and 33 ongoing technical assistance projects totaling US$ 29 million.
The ADB’s contract awards and disbursement to Nepal reached US$145 million and US$127 million, respectively.
Hitchcock painted the encouraging picture based on the assistance modality in different projects in Nepal.
“The year 2008 was a good year for the ADB in term of assistance, as all of our assistance for investments projects are in the form of grants,” said Hitchcock.
The ADB statement said no projects were considered at risk at the end of 2008, a remarkable achievement compared with 14 percent in 2007 and 17 percent in 2006.
The resident representative also categorically mentioned that the price increase for construction materials in high fuel prices delayed approval of government budget and Koshi flooding were the major challenges in development works during the review year.
“Now, shortage of electricity has emerged as a major change, as in the absence of electricity we cannot think of desirable economic activities,” Hitchcock said.
He also said that the ADB would take the initiative to fund more hydropower projects to deal with the ever-increasing power shortage in the country.
“We are looking for the possibility of funding storage project to solve the problem of the power crunch during the winter when water level in the rivers recedes,” he added.
He also noted that the successful completion of the CA election in April has paved the way for the establishment of lasting peace and enhanced prospects for sustainable growth in Nepal.
Showing posts with label Foreign Aid. Show all posts
Showing posts with label Foreign Aid. Show all posts
Thursday, February 05, 2009
Sunday, February 10, 2008
Foreign Aid Far From Adding Growth: Report
Foreign Aid Far From Adding Growth: Report
ArthaExpress.com, 7-Feb-08
Foreign aid in whatever form has not made any significant contribution for reducing poverty and supporting income generation activities in Nepal, says a report.
Although the volume of foreign aid has increased over the years and has been instrumental in meeting resource gap, it has been unable to enhance sustained growth.
The report entitled -´Role and Effectiveness of Foreign Aid Under PRSP in Nepal´ says that the aid is primarily contributing to induce aggregate demand in the economy for a short term. "The foreign aid measurably failed to enhance productive capacity of the Nepali economy which could have helped unleashing resources for sustained growth and, there by lessening of external dependency over the time."
Releasing the report, Speaker Subash Nembang on Wednesday stressed on the need to initiate public debate on aid effectiveness and its contribution to the socio-economic development in the long run. He pointed out that the status of foreign aided programmes and projects should be made transparent and people should have the rights to know about them.
Prof Bishwambher Pyakuryal said that the procedural complications and delay in disbursement have slowed down the effectiveness of foreign aids. He, however, claimed foreign aid played an instrumental role in the country´s expenditures, as it contributed almost one fourth of total expenditures.
Another economist Dr Raghab Dhoj Pant argued "Why should Nepal constantly beg donors for support, if foreign aid has not made any contribution to poverty reduction or enhancing incomes and savings. He also criticised the programmes and policies initiated by PRSP as being donor predominant, which ultimately failed to yield the projected results.
He criticised the government for implementing PRSP or the Tenth Plan (2002-2007) without realising the economic structure and ground realities of Nepal. Dr Pant countered the government´s claim of increasing flow of grants and said, "It will be useless to be happy unless we have counterpart fund to receive in large volume of grants."
Stating the most striking features of the 10th Plan, the report states that there were no attempts made to bring about a consistency between objectives and strategies, policies, programmes and implementation modalities. ´The donors´ policy conditions were predominant.´
The report findings observe that a unique phenomenon of foreign aid to Nepal is that more than one third of the total aid is neither audited, nor has proper records. The ratio of disbursement to commitment is not consistent. Besides low disbursement, on an average, aid utilisation capacity has remained less than 50 per cent.
The report also blames the state mechanism and government for low utilisation of the aid. "Despite expertise and qualified people inside and outside the government, no initiatives are taken to make detailed homework to identify major constraints and evolve better policy or programme options taking political economy and institutional into account," it says.
Contemplating Nepal´s aid dependency and its effectiveness, Dr Dilli Raj Khanal, principal author of the report said, "Unless foreign aid strategies and donors´ behaviour are changed following an overhauling approach, the debt trap situation will perpetuate accompanied by continued dependency on aid with some zero sum game type effect."
ArthaExpress.com, 7-Feb-08
Foreign aid in whatever form has not made any significant contribution for reducing poverty and supporting income generation activities in Nepal, says a report.
Although the volume of foreign aid has increased over the years and has been instrumental in meeting resource gap, it has been unable to enhance sustained growth.
The report entitled -´Role and Effectiveness of Foreign Aid Under PRSP in Nepal´ says that the aid is primarily contributing to induce aggregate demand in the economy for a short term. "The foreign aid measurably failed to enhance productive capacity of the Nepali economy which could have helped unleashing resources for sustained growth and, there by lessening of external dependency over the time."
Releasing the report, Speaker Subash Nembang on Wednesday stressed on the need to initiate public debate on aid effectiveness and its contribution to the socio-economic development in the long run. He pointed out that the status of foreign aided programmes and projects should be made transparent and people should have the rights to know about them.
Prof Bishwambher Pyakuryal said that the procedural complications and delay in disbursement have slowed down the effectiveness of foreign aids. He, however, claimed foreign aid played an instrumental role in the country´s expenditures, as it contributed almost one fourth of total expenditures.
Another economist Dr Raghab Dhoj Pant argued "Why should Nepal constantly beg donors for support, if foreign aid has not made any contribution to poverty reduction or enhancing incomes and savings. He also criticised the programmes and policies initiated by PRSP as being donor predominant, which ultimately failed to yield the projected results.
He criticised the government for implementing PRSP or the Tenth Plan (2002-2007) without realising the economic structure and ground realities of Nepal. Dr Pant countered the government´s claim of increasing flow of grants and said, "It will be useless to be happy unless we have counterpart fund to receive in large volume of grants."
Stating the most striking features of the 10th Plan, the report states that there were no attempts made to bring about a consistency between objectives and strategies, policies, programmes and implementation modalities. ´The donors´ policy conditions were predominant.´
The report findings observe that a unique phenomenon of foreign aid to Nepal is that more than one third of the total aid is neither audited, nor has proper records. The ratio of disbursement to commitment is not consistent. Besides low disbursement, on an average, aid utilisation capacity has remained less than 50 per cent.
The report also blames the state mechanism and government for low utilisation of the aid. "Despite expertise and qualified people inside and outside the government, no initiatives are taken to make detailed homework to identify major constraints and evolve better policy or programme options taking political economy and institutional into account," it says.
Contemplating Nepal´s aid dependency and its effectiveness, Dr Dilli Raj Khanal, principal author of the report said, "Unless foreign aid strategies and donors´ behaviour are changed following an overhauling approach, the debt trap situation will perpetuate accompanied by continued dependency on aid with some zero sum game type effect."
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