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Economic Survey, a MoF publica� on, the most reliable source of foreign aid
related imforma� on, such as gives only the budgetary support of foreign
aid that accounts only the half of the foreign aid fl ow into the country. At
present, there are dozens of mul� lateral and bilateral donors while hundreds
of INGOs are also con� nuously providing development and humanitarian aid
to Nepal.
During the1950s and 60s, there was a limited number of donors, mainly
India, China and the USA. These countries contributed to more than 90
percent of the total infl ow of aid in the country. As several donors gradually
started their aid programmes in Nepal, foreign aid in Nepal increased
tremendously over � me and more than trebled in each successive decade.
Japan has been the largest donor since the 1980s. The mul� lateral banks
increased their assistance sharply a� er the mid 1980s. Similarly, from the
late 1980s, the Netherlands and other small Scandinavian countries like
Norway, Finland and Denmark also increased their development assistance.
In addi� on to this, a� er the restora� on of democracy, several INGOs
increased their assistance to the country. At present, Japan, UK, the USA,
Germany and Denmark remain the largest bilateral donors while the Asian
Development Bank and the World Bank are the largest mul� lateral donors.
India and China are also other major donors to Nepal.
Grants, concessional loans and technical assistance are the major three
types of aid components in Nepal while bilateral aid, mul� lateral aid and
the contribu� on of INGOs are the major source of aid. Bilateral donors
and mul� lateral agencies such as UN agencies and the EC mainly provide
grants and technical assistances, whereas the WB and the ADB provide
some negligible technical assistance along with large chunks of concessional
loans. Likewise, INGOs provide both grants and technical assistance. Before
1990, the share of INGO’s contribu� on was very negligible. The technical
assistance was not recorded in the government budget while most of the
loan and grants were spent through central government channel. But
a� er the 1990s, the disbursement of bilateral assistance (in case of some
specifi c donors), ones not meant to be paid back, has been done outside the
government channel (mainly through I/NGOs) and is following an increasing
trend. However, the concessional loans provided by the WB and the ADB are
s� ll spent almost en� rely through government channels.
Technical assistance is one of the major components of foreign aid. It is
also one of the most debatable issues as majority part of TA is considered to
get back to the donor countries.
Nepal has been receiving technical assistance mainly in terms of foreign
experts and technical advisors, feasibility studies to launch programmes,
training and scholarship for Nepali ci� zens and several types of equipments
throughout the evolu� on of foreign aid in Nepal. Since technical assistance
as part of aid right from has not been included in the annual budget of Nepal
the very beginning, it is diffi cult to fi nd consistent and actual fi gures of the
foreign aid coming in as technical assistance. According to the OECD review
(1985), 'technical coopera� on accounts for almost one third of the net
Changing paradigms of aid eff ec� veness in Nepal 125