Donors to set agenda for aid-hungry Nepal

PTI | ByKedar Man Singh (Agence France-Presse), Kathmandu
May 09, 2004 08:14 PM IST

Against the backdrop of upheaval, aid-dependent Nepal's international donors will meet to decide the direction of funding for the Himalayan kingdom being pulled in three directions.

Against the backdrop of upheaval, aid-dependent Nepal's international donors will meet from Wednesday to decide the direction of funding for the Himalayan kingdom being pulled in three directions.

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The donors will spend two days setting aid policy through 2006 for Nepal, where opposition parties are tussling with King Gyanendra in the capital and Maoist rebels are fighting to rid the countryside of Kathmandu's influence.

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Foreign aid accounts for six percent of Nepal's Gross Domestic Product and a full 50 percent of the investment in development -- a top priority of King Gyanendra who in 2002 took over the government saying parliamentary democracy had failed.

The opposition has brought out thousands of people to the streets for a month demanding a return to democracy and is flirting with negotiating with the king just as the delegates arrive.

Both the pro-royal government and some diplomats say the meeting, the Nepal Development Forum, should be an opportunity for reconciliation.

"In the absence of an elected parliament, the political opposition in the country must attend the meeting," said a European diplomat taking part in the Forum.

The opposition participated in informal meetings to plan the Forum but has so far resisted pressure for a formal role.

"When we are fighting against the government why on the other hand would we participate in something organised by the government?" said Bharat Man Adhikari, an opposition leader and former finance minister.

But Shankar Nath Sharma, vice chairman of the National Planning Commission, said: "The opposition took part in the consultations and showed no serious objection to projects such as poverty alleviation."

He said the goal was to raise more aid commitments for Nepal than the last Forum in 2002 which raised about 1.4 billion dollars. The meeting will include representatives from the United States, European countries, Japan, the World Bank and the Asian Development Bank.

Sharma said Nepal showed some signs of a recovering economy including GDP growth, which he estimated would reach 4.5 percent for the fiscal year ending July 31, steadily up from the 2001-2002 fiscal when the figure was negative 0.3.

The year 2001 was one of Nepal's most traumatic, with 10 members of the royal family killed by a drunken crown prince and a surge in the Maoist insurgency, both setting back tourism which provides 1.25 million jobs in the land of Mount Everest.

Nepal, with its strategic location between China and India, has been showered with aid for decades. Both neighbours, the United States and some European states attach priority to helping the kingdom.

But the Maoists in their eight-year insurgency have systematically targetted the fruits of the aid, blowing up development projects and putting teachers and doctors on their hit list.

The rebels, who want to turn the world's only Hindu kingdom into a secular republic, contend that foreign aid is a capitalist ruse by the Kathmandu elite with little bearing for the poor who make up a majority of the 25 million population.

The Maoists have not been invited to the development forum. But observers said they would still cast the largest shadow over the meeting.

"It will be very difficult for the government to convince the donors with the insurgency going on," a Nepalese economist said on condition of anonymity. "Its record on human rights and its growing expenditure on security will be hard to explain."

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