Nepal vows transparency, efficiency as donors pledge billions in aid

By Lean Alfred Santos 26 June 2015

A woman carries corrugated galvanized iron sheets distributed by the International Organization for Migration to families needing durable houses to protect themselves from the monsoon rain in earthquake-hit Nepal. A donor conference held June 25 in Kathmandu raised more than $3 billion in aid pledges to finance and support reconstruction and recovery efforts in the country. Photo by: Eunjin Jeong / IOM / CC BY-NC-ND

Nepalese officials were quick to assure the international development community that money earmarked for the country’s relief and rehabilitation efforts following two earthquakes that killed almost 9,000 people will be spent transparently, ensuring every cent will translate to improving people’s lives.

Speaking Thursday at a donor conference in the capital Kathmandu, Prime Minister Sushil Koirala vowed his government will make sure transparency remains at the “core of the reconstruction effort” while leaving “no stone unturned in making sure that … support reaches the intended beneficiaries.”

The conference, which gathered several movers and shakers in the international development community, drew more than $3 billion in pledges. Including previously announced commitments from India and China, Nepal has received about $4.4 billion — two-thirds of the $6.7 billion estimated need — in promised funds to finance reconstruction and recovery efforts in the South Asian nation.

India and China, Nepal’s two biggest neighbors, provided the bulk of aid pledges. New Delhi announced another $1 billion for the Himalayan nation, 25 percent of it in grants, bringing its total pledges to $2 billion over the next five years. Beijing, meanwhile, promised a $483 million aid package that sees its grant assistance to Nepal going up to $760 million in the next three years.

It should be noted that both of these Asian behemoths are believed to be competing for greater influence and leadership in the region. India has been pursuing tighter integration of South Asia, and has proposed to establish a South Asian Development Bank over the past year. China meanwhile is well on its way to operationalizing the Beijing-based Asian Infrastructure Investment Bank.

In addition to pledges from India and China, Japan has set aside $260 million in infrastructure-focused assistance, while the United States and the European Union have promised $130 million and $112 million in grants, respectively. Multilateral institutions have also contributed significantly. The World Bank is planning to roll out $500 million in low-interest loans for the South Asian nation, while the Asian Development Bank has promised $600 million.

“Affected families showed tremendous resilience by initiating rebuilding efforts on their own despite their heavy suffering,” Takehiko Nakao, president of the Manila-based multilateral bank, said in a statement. “But the remaining challenges are immense. We must consider the sheer magnitude of the damage and suffering, the remoteness of the affected areas, and the monsoon already setting in.”

Nakao shared that recent disasters in the Philippines and Indonesia should set the tone, while sharing five principles of reconstruction that Nepal should consider moving forward: Building back better, inclusiveness, robust institutional setup for reconstruction, capacity and governance, donor coordination, and government ownership.

Lack of local engagement

While the donor conference proved to be a huge step in raising money for Nepal’s recovery, it was not the first one. Immediately after the earthquake, the United Nations led a joint funding process from the international community to address specific needs in the South Asian nation.

The latest flash appeal, based on requirements submitted by organizations on the ground, stands at $422 million. At the time of writing, only 28 percent — about $120 million — in funding has been received, with one-third of the donations coming from private contributions. The sectors which has so far received the most funding are food security, shelter and WASH.

The flash appeal, along with the donor conference, will be crucial to Nepal’s recovery. Bimal Gadal, humanitarian program manager for Oxfam in Nepal, said in a statement that the government has a “golden opportunity to get people back on their feet and [become] better prepared for the future.”

Jagan Nath Kurmi, chair of the National Network of Community Disaster Management Committee in Nepal, highlighted in the same statement the need for a “strong disaster management law that provides adequate resources for preparing for future disasters.”

The Oxfam official also stressed the need for local engagement in pursuing recovery efforts given that the “Nepalese people know their needs better than anyone and their voices must be heard” — something journalist and former U.N. citizen ambassador Emily Troutman revealed could be overlooked as the efforts become more multistakeholder in scope and scale.

In a commentary shared to Devex, Troutman argued that local actors “are not included in key areas of the humanitarian recovery,” as less than 1 percent of funding requirements came from organizations based in Nepal. Data from the latest flash appeal showed that of the $422 million requested by various organizations, only around $3.5 million come from and will be directed to local groups.

Troutman said “local organizations are being used primarily as subcontractors instead of receiving funding directly.” Many of these local groups meanwhile do not apply for foreign funding because they are not aware of such financing opportunities or do not have time to complete the funding application requirements. Language is a barrier as well.

“By funding only large international organizations instead of local or small organizations, we rob those smaller groups of the opportunity to expand their capacity and managerial skills,” she concluded. “We also make it more unlikely that the response will take a truly local approach to aid and recovery.”

How can Nepal make sure that foreign aid given for the recovery and reconstruction efforts following the devastating earthquake can be made transparent, effective and efficient? Let us know by leaving a comment below.

Read more international development news online, and subscribe to The Development Newswire to receive the latest from the world’s leading donors and decision-makers — emailed to you FREE every business day.

About the author

Lean 2
Lean Alfred Santos@DevexLeanAS

Lean Alfred Santos is a Devex development reporter focusing on the development community in Asia-Pacific, including major players such as the Asian Development Bank and the Asian Infrastructure Investment Bank. Prior to joining Devex, he covered Philippine and international business and economic news, sports and politics. Lean is based in Manila.


Join the Discussion