book1

made it fairly important from a strategic point of view 2 . As a result foreign
aid became the major tool to serve the interest of both Nepal’s and the
western countries. As a result, the number of donors as well as the amount
of foreign aid pouring into Nepal increased sharply over successive decades.
Being neutral towards superpowers and a� rac� ng as much foreign aid as
possible, Nepal accepted all and any form of aid, as and when provided. As a
result, a wide range of donors from countries capitalist to communist, from
sources bilateral to mul� lateral, and even from missionary organiza� ons
to INGOs provided assistance to Nepal. Similarly, there were neither any
specifi c areas, regions, sectors, nor any specifi c group of people that were
targeted specifi cally by foreign aid.
As a result, foreign aid has been used for any purpose; from physical
infrastructure to basic social service development and from entertainment
related programmes to the development of culture and religion.
Foreign aid: a means of fulfi lling donors and recipient’s interest
There is a big debate on the mo� ve of foreign aid. Theore� cally, all
donors are altruist. The moral and ethical grounds of helping Nepal and its
people is the fi rst one that all donors agree upon and state very frankly. But
many literatures and experiences claim that donors to Nepal have entered
the country with hidden mo� ves riding on foreign aid. The commercial,
poli� cal and strategic interests are other pervasive mo� ves that they do
not like to admit easily. There is no historical evidence to suggest that over
longer periods of � me donor na� ons assist others without expec� ng some
corresponding benefi ts (poli� cal, economic, military, etc). 3
The main objec� ve behind the US’s entry in to Nepal during 1950s was to
prevent communist incursion by encouraging poli� cal and economic stability
by helping vulnerable people in the periphery of the communist world 4 . The
mo� ve of aid from the then USSR was to counter the American strategy and
to spread its own poli� cal ideology. India and China started their aid program
in Nepal because of their rivalry and their strategic interest in Nepal. Most of
other donor countries had one common goal of commercial interest that is to
enhance the world capitalist system. Capturing the market in poor countries
and making it more favorable for their own trade are the major commercial
interests of donors. One can see many examples of condi� onali� es imposed
on aid such as purchase of hardware and appointment of advisors from
their own countries in many bilateral donor programmes in Nepal. Japan’s
growing economic interest in the Asian con� nent at that � me could have
been an eff ort to capture the market through aid. 5
The mo� ve of giving aid on ethical and moral grounds is also guided
by strategic interests of the donor. The resources transferred from rich
2. Khadka N(1997), Foreign Aid and Foreign Policy, Major Powers and Nepal, Vikash Publishing
House, New Delhi
3. Todaro, M P (1985), Development in the Third world,
4. Mihaly, E. B. (1965/2003), Foreign aid and poli� cs in Nepal, Himal Books, Kathmandu
5. ibid
Changing paradigms of aid eff ec� veness in Nepal 123