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Figure 3: Offi cial Aid 1990-2009
46
Billions USD (2008 Prices)
300
250
200
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
150
100
50
0
Source: OECD, April 2010
Promised Aid in USD Actual ODA Aid
ODA to poorest Nations (LDCs) ODA as % of GNI
Changing paradigms of aid eff ec� veness in Nepal
% of GNI on
Right scale
There are number of factors that have led to the decline in aid. Some of the
reasons include an ideology shi� on the part of governments and markets;
increasing number of countries compe� ng for development funds; and
donors’ diff ering interpreta� on on what cons� tutes development assistance.
Similarly, there have been signifi cant increases in non-development aid. The
expanded categories of ODA involve debt relief; administra� ve costs; grants
to NGOs and domes� c agencies to support emergency relief opera� ons;
provision of surplus commodi� es of li� le economic value; and technical coopera�
on grants to pay for the services of na� onals of the donors’ countries.
However, some recent fi ndings on the contribu� on of foreign aid to
na� on’s development goals show some posi� ve results. The fi ndings show
developmental aid is sa� sfactory but not enough. For example, the 2008
Survey on Monitoring the Paris Declara� on covering close to US $45 billion
of development aid in altogether 55 countries shows that both the donors
and recipient countries have made some progress towards achieving the
interna� onal commitments. The early implementa� on of the Paris Declara� on
also shows that there has been a signifi cant and tangible strengthening of
na� onal development policies and strategies (Deutscher and Fyson 2009).
The Nepalese experience too reveals the same concerns. There has been,
indeed, a large discrepancy between aid commitment and disbursement.
The trend shows that the problem has been even more serious during the
last decade. Since fl ow of foreign aid is also the func� on of governance, such
high discrepancy is a� ributed to poli� cal instability in the country during
those � me periods. Such varia� ons between commitment and disbursement
have its implica� on for budgetary prac� ce in Nepal.
0.6%
0.5%
0.4%
0.3%
0.2%
0.1%
0.0%
% of GNI