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Ac� on (AAA). All development actors – DAC and non-DAC donors, developing
countries, CSOs, parliamentarians and global partnerships agreed on ac� ons
needed to accelerate achievements of the Paris Commitments.
There has been a change in the behaviors of donors and developing
countries since 2005. The norm has come to stay that aid recipients
discuss their na� onal development strategies with their parliaments and
electorates (ownership); donors support these strategies (alignment) and
work to streamline their eff orts in-country (harmoniza� on); development
policies are directed to clear goals and progress is monitored (managing for
development results); and donors and recipients are jointly responsible for
achieving these goals (mutual accountability).
The Fourth High Level Forum (HLF-4) on Aid Eff ec� veness will be held in
Busan, Korea in November 2011. It will take stock of what has been achieved,
iden� fy areas for concentra� ng eff orts and set aid quality framework for the
remaining years to the MDG target date of 2015. Developing countries’ list of
priori� es for HLF-4 is predictability aid fl ow, use of country systems, removal
of policy condi� onality, country-driven capacity development, mutual
accountability and reduc� on of transac� ons costs. HLF-4 will also focus on
value for money and raising aid quality. Many countries and ins� tu� ons
want to look at ‘development eff ec� veness’ and not only ‘aid eff ec� veness’
– a discussion that brings round to all factors that support development –
aid, country’s own resources, policy coherence for development, the private
sector, etc. (Aid Eff ec� veness, 2011)
Some of the challenges and threats under discussion in view of Busan
Forum are: 1) Focus on the essen� al and get rid of the noise – set the
aid quality framework leading to 2015, 2) Donors should focus now on
delivering some ‘low-hanging fruits’ including on aid untying, predictability,
removal of policy condi� onality and transparency, 3) Keep momentum – do
everything you can, 4) Deliver on exis� ng pledges – avoid prolifera� on of
new commitments and 5) Be� er accountability and communica� on to win
support. (Aid Eff ec� veness, 2011)
Foreign Aid Policy in Nepal
Nepal’s development fi nance began receiving foreign aid from the 1st Five Year Plan, 1956 -61. Since then a substan� al por� on of development
expenditure somewhere about 55% per annum (5-6% of GDP) has been
fi nanced from foreign aid. Foreign Aid Policy, 2002 (F A Policy, 2002) came
into eff ect following elaborate consulta� ons with all stakeholders including
the development partners (DPs) and adop� on during Nepal Development
Forum 2002. The guiding principles of the 2002 F A Policy are: 1) Foreign
Aid will be directed towards achieving the overarching na� onal goal of
poverty reduc� on. This will involve fostering economic growth by enhancing
produc� ve capacity of the economy as well as suppor� ng cri� cal social
infrastructure needs. 2) FA will be linked with the sectoral objec� ves. 3) F
A Policy forms an integral part of the overall policy of mobilizing resources.
4) The F A Policy will ensure greater transparency at both the ODA supply
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Changing paradigms of aid eff ec� veness in Nepal