Friday, 30 October, 2020

Increasing Foreign Aid

It is cheering to note that the bilateral and multilateral donors have continued to extend their helping hand to Nepal in her fight against the coronavirus pandemic and reviving the battered economy. Like many nations globally, Nepal has been struggling hard to contain the lethal virus since the third week of March. The government had no alternate but to go for a nationwide lockdown and other restrictions to prevent the spread of the COVID-19. Although tougher measures like lockdowns and prohibitory orders have now been lifted, some other forms of restriction are still in place. However, the nation is now at a crossroads with an upsetting rise in virus infections and deaths. Naturally, the nation's revenue collection was badly affected in the initial months of the pandemic. A lot of people lost their jobs with the shutting down of businesses.

Even in the face of adversity, the country has received more foreign aid as compared to the previous years. As per a news item carried by this daily Sunday, the inflow of funds has considerably increased to Rs. 84.7 billion in the first two months (mid-July to mid-September) of the current fiscal year (2020/21). The amount accounts for about 39 per cent of the total foreign assistance the country received in 2019/20. The record maintained by the International Economic Cooperation Coordination Division (IECCD) under the Ministry of Finance shows that the country had got Rs. 219.88 billion in foreign aid from multilateral and bilateral donors, and international non-governmental organisations in 2019/20.

The nation obtained higher amount of funds in the later five months of the last fiscal year than that of the first seven months. The international development partners contributed as much as Rs. 109.28 billion to the country until mid-February 2020. However, the funds received from mid-February to mid-July stood at Rs. 110.6 billion. The World Bank (WB) is among the major multilateral donors to support Nepal. The WB has provided US$ 450 million loan to the country for materialising the projects related to trade and connectivity, earthquake support and education sector development. This is considered to be the largest foreign support the country has ever received. It has supported three of five key aid packages for Nepal. Similarly, Japan provided 300 million Japanese Yen while the Asian Development Bank (ADB) and Norway gave a loan of $200 million and grant of $35 million, respectively, for the power infrastructure project. The United Kingdom is another major donor to pledge Rs. 7.12 billion (45.8 million Sterling Pound) to Nepal to help deal with COVID-19.

Nepal has requested its development partners to assist the country in developing health infrastructure, human resources and expanding health services to fight the pandemic and rehabilitate the micro, small and medium enterprises. Similarly, the European Union has pledged Rs. 10 billion (75 million Euro) to help stimulate economy and labour demand in the time of the pandemic. The International Monetary Fund (IMF), India, Switzerland, Green Climate Fund and Asian Infrastructure Investment Bank are other donors to support Nepal during crises. With such an invaluable support from donors, the country may be able to tackle the pandemic and revive the economy soon. 

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