Foreign aid a necessary evil
KATHMANDU, MAY 28:
Foreign aid has become a necessary evil as it has been financing around 60 per cent of development programmes, according to experts.
Without developing our own competency and reducing country’s dependency syndrome, there is no alternative to the foreign aid, said former ambassador to India Prof Dr Lok Raj Baral, speaking at a workshop on ‘The Political Sociology of Aid in Nepal’, organised by Alliance for Aid Monitor Nepal (AAMN) here today.
Apart from increasing the absorptive capacity of the country, the aid should be channelised to the prioritised sectors, Baral pointed out.
“State’s regulatory capacity has to be increased to achieve the desired output, as the distribution of resources depend on political influences,” he said, adding that the contribution made by foreign aid to sector like poverty alleviation should be evaluated.
Backing Baral, senior economist Prof Dr Bishwhambher Pyakuryal also agreed that a study is a must on why foreign aid has failed to achieve its target in the country. “The impact of foreign aid on inflation, exchange rate and other critical economic indicators have to be studied in detail for effective public expenditure management and formulation of appropriate fiscal and monetary policy,” Pyakuryal added.
“We should also be aware that over dependency on foreign aid could erode domestic resources mobilisation capacity,” Pyakuryal said, adding that external aid should not suppress the domestic resources mobilisation capacity of the country.
Government has also started monitoring Development Cooperation through Aid Management Platform to take maximum benefit of aid. It has also asked the development partners to align their assistance with the Three Year Interim Plan to increase the total output.
Likewise, Prof Dr Krishna Bhattachan, on the occasion, suggested a study should be carried out on the contribution made by foreign aid on state and the society.
Similarly, national programme manager of Alliance for Aid Monitor Nepal Prabash Devkota, said that foreign aid has to be linked with the political sociology to understand why foreign aid failed to deliver desired economic changes.
“Not only would it shed light on why foreign aid aimed at economic development failed in the past but also can analyse and explain what should the country like Nepal expect from foreign aid to achieve economic development, “ Devkota said.
Source: THT
