* Use of foreign aid is not seen to be effective
* Most projects run with foreign assistance not completed on time
* Documents of projects run with foreign assistance often prepared by donors themselves
*Huge chunk of foreign aid received in Nepal remains off-budget
KATHMANDU, March 30: The government has said that instances of serious anomalies in the mobilization of foreign aid in Nepal are on the rise in recent years.
Presenting a whitepaper in parliament Friday on Nepal's current economic status , Finance Minister Yuba Raj Khatiwada said the documents of projects run with foreign assistance in Nepal are often prepared by the donors themselves, without giving any consideration to the country's needs and priorities. He said that in many cases this has given space for the interests of development partners to prevail over the country's real needs and priorities.
In a frank and brutal assessment of the current status of foreign aid in the country, Finance Minister Khatiwada said a huge chunk of foreign aid received by Nepal is found to have been spent on foreign training, study tours, exposure visits, procurement of expensive vehicles and consultancy services.
The points highlighted by the finance minister go against the Paris Declaration on Aid Effectiveness . Development partners have agreed to uphold the principles of ownership of the recipient country and align their support with its needs and priorities. They have also agreed to ensure mutual accountability on the part of both donors and recipient country.
In his briefing to the Kathmandu-based diplomatic community on the government's plans and priorities on Tuesday, Prime Minister K P Sharma Oli urged development partners to support Nepal's priorities.“Given the level of our development, we still need an enhanced level of development cooperation, mainly for economic development. We urge the development partners to align assistance with our priorities," he had said.
Minister Khatiwada said that there has not been any serious study about the projects financed by development partners and the government has failed miserably to do anything about it. "There is a tendency to take foreign aid even for work that can be financed by our own resources and capacity," the minister said, while adding that the government had also failed to develop a project bank of potential projects.
Khatiwada also said that the utilization of foreign assistance has not been effective. "Although foreign aid is necessary in terms of the transfer of capital, knowledge and technology, there has not been progress as anticipated in its use and implementation," he said. "Concerned agencies of the Nepal government and development partners both are responsible for this."
Khatiwada also said that a huge chunk of foreign aid does not come within the ambit of the national budget. "Of the total foreign aid coming into Nepal, some 25 to 30 percent does not come into the budget, and of the amount coming into the budget system, 35 to 40 percent is disbursed without coming into the national treasury," Khatiwada further said.
He also mentioned that the failure of development partners to release their pledged amounts on time had put additional stress on the revenue sources of the government.
The minister said most of the projects funded by foreign aid are not completed on time."As the time gets prolonged, the cost of the project increases. The slow pace of construction work on the Melamchi Drinking Water Project, the Postal Highway and the Gautam Buddha Regional International Airport are a few examples of this," he added.