DEVELOPMENT DILEMMAS CONTEXTS
Development dilemmas Development – or bikas, in Nepali – has been the country’s political mantra ever since the Ranas were booted out of office in 1950. And yet Nepal remains one of the world’s poorest nations, with a per capita income of just over $1000 a year. In truth, this figure is distorted by migrant labourers’ remittances, and perhaps half of Nepal’s population survives on little more than a dollar a day. On the UN’s 2014 Human Development Index, Nepal ranked 145th out of 187 countries – sandwiched ingloriously between Nigeria and Haiti. Everything seems stacked against Nepal. It is landlocked, and squeezed between two economic giants. It has few natural resources. The steep terrain makes farming inefficient and communications difficult. Earthquakes and monsoons can undo dams, roads and other infrastructure as fast as they’re built. A combination of Hindu fatalism, the caste system and a legacy of aristocratic paternalism has long kept the doors of opportunity tightly shut – the regime did essentially nothing for its people before 1951. Since then, governments have apparently prioritized corruption and clientism over development – despite the incredible efforts of aid workers and local activists. THE DEVELOPMENT INDUSTRY Everyone loves to give aid to Nepal. The country receives hundreds of millions of dollars annually in direct grants and concessionary loans, making it one of the world’s leading aid recipients on a per capita basis. Depending on the year, foreign aid accounts for anything up to eighty percent of the money spent by Nepal’s government on projects (capital expenditure), and around a quarter of total expenditure; the joke goes that the country can’t afford to develop. Aid comes in many forms. Bilateral (and multilateral) aid – money directly given or lent by foreign governments, invariably with political or commercial strings attached – has financed most of the roads, dams and airports in the country. Social programmes tend to be carried out by international non-governmental organizations (NGOs), which can be anything from giants such as Oxfam, CARE and Save the Children to a couple of highly motivated people doing fieldwork and raising sponsorship money at home. Voluntary NGOs, such as Britain’s Voluntary Service Overseas (VSO) and the US Peace Corps, generally slot volunteers into existing government programmes. Increasingly important are revenues from international lending bodies such as the World Bank and Asian Development Bank (ADB), which both provide direct grants and act as brokers to arrange loans for big projects with commercial potential – usually irrigation and hydroelectric schemes. The ADB, for instance, is now the source of over twenty percent of Nepal’s foreign aid. Many of these organizations do excellent work. But paying imported experts ten or twenty times more than Nepalis to do the same job causes resentment and distorts the local economy. Large organizations are effectively obliged to fund large-scale projects, which may not always be the most appropriate or efficient options. And many projects are crippled by short-term funding that prevents them taking a long-term view. Foreign aid can also foster a ipi8hfBu+Fu1Tqp6g5eaALs= crippling aid dependency. The fashionable philosophy, therefore, is to finance local NGOs, which supposedly have a better handle on local problems and solutions. The result has been an explosion in Nepali organizations, blurring the distinction between genuine, grass-roots organizations run by the heroically dedicated, and quasi-companies tailoring themselves to fit the latest development buzz words: sustainable, small-scale, women-focused, environmental – whatever. Lack of coordination results in monumental inefficiency, and lack of scrutiny means that some aren’t doing much besides writing grant proposals.
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