Stop Relying On Donors For Development


When the World Bank cancelled a $1.2 billion loan for the construction of the Padma Bridge project, the Bangladeshi government did not back down or rely on loans; instead, they proceeded by invoking nationalist sentiment. Prime Minister Sheikh Hasina conveyed to fellow citizens that the World Bank wanted them to beg and continue as guinea pigs. They declared, "Enough is enough. We will proceed with this project using our own resources." The Hasina government outlined ambitious plans to generate resources, including imposing surcharges and issuing sovereign bonds worth at least $750 million. The prime minister had already instructed various ministries to reduce development projects and allocate the funds for the $2.9 billion Padma multipurpose bridge. 

After eight years, the bridge was finally completed in June 2022. This bold determination of the prime minister is now yielding results, as it connects approximately 13 out of 21 districts, leading to an anticipated boost of Bangladesh's GDP by up to 1.23 per cent. Hats off to Prime Minister Sheikh Hasina! In fact, this is what all developing countries should strive for. Relying heavily on donor agencies to accomplish projects is ineffective and unsustainable in the long-run because donors often manipulate the project details to their advantage. They exert excessive control over the selection, design, and implementation of projects, which inherently hampers their success and long-term sustainability. 

Numerous conditions 

When offering loans or grants, donors impose numerous conditions that must be met. Consequently, sometimes more than 50 per cent of the project's allocated budget ends up being redirected back to the donor. As a prerequisite for obtaining loans, hefty fees are required to be paid to foreign consultants for preparing preliminary and detailed reports, as well as for design and other aspects. The attempt by donors to exert excessive control not only comes with serious costs but also undermines long-term development benefits. Every "donor-driven" project not only fosters dependency but also hampers the necessary processes of development. 

Furthermore, while most foreign grants or donations to developing countries may appear benevolent or charitable, they serve as a means for donor countries or agencies to exert "soft power" and establish hegemony over a nation. Soft power refers to the capacity to influence other nations through persuasion, appeal, and attraction rather than coercion or force. Even foreign loans insinuate insidious intrusions on sovereignty. Instead of relying heavily on outside assistance, we should seek help in equipping ourselves to address our own challenges through technology transfer, commonly known as "capacity building." 

To promote prosperity, every country must enhance its labour force, mobilise internal resources, and effectively utilise them. This is not to undermine the importance of grants or loans, but rather to view them as limited and strategic catalysts or tools for development, specifically targeting the identified gaps or needs and with the intention of gradually reducing dependency on them. However, in Nepal's current scenario, foreign grants and loans are largely spent to serve the vested interests of the donors and individuals involved, rather than the best interests of the country. These funds are invested in extravagant projects, and there is a lack of technology transfer. Prolonged reliance on foreign grants or loans ultimately renders a nation handicapped or enslaved. Nepal's significant dependence on donors is undoubtedly a worrisome indication of the current situation. There are no examples in the world where donors help build a nation and its citizens become lethargic. Japan developed the country exponentially through their own efforts after World War II by isolating themselves from foreigners. Singapore took a somewhat different path to development by creating a safe, corruption-free, and low-tax environment, which attracted significant investment. With the inflow of foreign investment, Singapore prioritised the development and capacity building of its human resources before focusing on infrastructure. They embraced the motto, 'You do not build a nation. You build people, and the people build the nation.' If we wait for donors to construct our infrastructure, it is merely an illusion. 

Let's consider the example of the Karnali Bridge, which was built about 30 years ago with donor funding. The bridge was designed by a US consultant, constructed by a Japanese contractor, and funded by the World Bank. Unfortunately, there was no technology transfer, and the knowledge of its technology remains a mystery to our engineers. This epitomises our failure to equip ourselves with the necessary expertise. If Nepali engineers had been trained in the technical know-how of this bridge, their skills would have matured, leading to the construction of many innovative bridges in Nepal. We would have been at the forefront of innovation and unafraid to challenge the status quo. 

Internal resources  

However, our engineers were never provided with training, entrusted with challenging responsibilities, or encouraged to experiment. Consequently, our engineers do not measure up to their counterparts in neighbouring countries, and their capabilities are eroding and debilitating. Moreover, at a time when recession fears loom globally and the country should be investing more in infrastructure, the nation is reducing the capital expenditure budget, and engineers’ morale is at an all-time low. In a nutshell, we should not rely on begging for hand-outs or collecting fish from donor countries just to satisfy our immediate needs and be content with that. Instead, we should focus on acquiring the necessary technology and knowledge to fish independently. It is crucial to enhance the capabilities of our own engineers to take on the task of nation-building. 

We must fully utilise our internal resources for our development. It is important to remain vigilant about the vested interests of all donors and prioritise our country's interests wisely. Just as China was developed by the Chinese and Japan was developed by the Japanese, there are no shortcuts to Nepal's development. It requires the active participation of Nepali people for the betterment of Nepal. Neglecting our responsibilities and being indifferent to our obligations will have severe consequences not only for us but also for future generations. Time keeps moving forward, and if we don't keep up, we will be left behind, facing significant challenges ahead.


(The author is a structural engineer.)

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