Nepal Could Lose Out on Foreign Aid Due to Political Impasse
Kathmandu – The international donor community has warned Nepal it will withdraw aid if the political situation does not improve.
A statement issued late Tuesday by the US government’s main aid organization US Agency for International Development on behalf of the international donor community said that there was concern over the “negative development impact stemming from the slow progress in forming a new government, implementing the peace process, and writing the new constitution.” Parliament has failed 16 times attempts to elect a prime minister. “The slow pace in implementing the peace process, combined with the continued caretaker status of the government, lack of development leadership, significantly reduces most donors’ ability to secure future resources for Nepal,” the statement said.
Nepal is one of the poorest countries in the world and largely depends on foreign aid for its development. The country has been under a caretaker government since June when the prime minister Madhav Kumar Nepal resigned under Maoist pressure. A Maoist insurgency from 1996 to 2006 killed over 16,600 people. The absence of a government delayed the announcement of a full budget, affecting the administration as well as development. Donors said the announcement of a budget last week, using a special ordinance, had provided some relief but urged the completion of the peace process.
It also called on the country to “effectively deal with the other ongoing issues constraining Nepal’s development” in order to create an environment in which foreign assistance can most effectively be implemented. The statement was issued by USAID on behalf of organizations including the Asian Development Bank, a group of donor communities representing Western nations and the World Bank.
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