Statement of Concern by the Nepal Donor Community

Today: On behalf of the international donor community, the United States Agency for International Development is releasing the following statement:

Statement of Concern by the Nepal Donor Community Regarding the Impact of the Continued Political Impasse

• The international donor community would like to communicate to Nepal’s political leaders our growing concern regarding the negative development impact stemming from the slow progress in forming a new government, implementing the peace process, and writing the new constitution.
• The donors recognize the difficult circumstances under which the budget was promulgated by Ordinance and are glad a crisis has been averted for now.
• Executive leadership at both the Prime Minister and ministry level along with a genuine commitment to the peace process, transparency, accountability and tackling corruption will significantly accelerate progress in nearly every development sector.
• Numerous key senior positions remain vacant, limiting the effectiveness of the Nepal Government and reducing donor confidence.
• The slow pace in implementing the peace process, combined with the continued care-taker status of the government, lack of development leadership, significantly reduces most donors’ ability to secure future resources for Nepal.
• The donor community remains committed to supporting Nepal through this challenging time and strengthening the ability of individual Nepalese to improve their living standards.

Full Statement
(emphasis by the USAID)

The international donor community would like to communicate to Nepal’s political leaders our growing concern regarding the negative development impact stemming from the slow progress in forming a new government, implementing the peace process, and writing the new constitution. The donors recognize the difficult circumstances under which the budget was promulgated by Ordinance and are glad a crisis has been averted for now. We further encourage leaders to renew their focus on the long-term critical issues affecting Nepal’s development and economy—particularly corruption, ownership and accountability; slow progress in filling key positions in important public offices; and the security environment.  While development progress continues in certain sectors, the ongoing political impasse has stalled or slowed many development projects and may negatively impact or limit future donor assistance.

Executive leadership at both the Prime Minister and ministry level along with a genuine commitment to the peace process and to transparency and accountability will significantly accelerate progress in nearly every development sector. The most effective programs are designed in strong partnership with the Government.  While senior civil servants provide substantial input and guidance, engagement at the political level is often necessary.  In addition,numerous key senior positions remain vacant limiting the effectiveness of the Nepal Government and reducing donor confidence, including the Head of Supreme Audit Authority (Auditor General), Chief Election Commissioner, and Chief of the CIAA (Commission for the Investigation of Abuse of Authority) as well as significant numbers of leadership positions at the Village Development Committees.

While progress continues, the slow pace in implementing the peace process combined with the continued care-taker status of the government, lack of development leadership significantly reduces most donors’ ability to secure future resources for Nepal.  Each donor institution is ultimately answerable to its own government and citizens or to its senior management at headquarters.  Nepal’s unstable political situation has made it increasingly difficult for many donors to justify why Nepal should receive support in a world where there are many competing demands for limited development resources.  The impact of reduced donor funding may not always be immediately apparent, however, the long term consequences for Nepal’s development are substantial.

The donor community remains committed to supporting Nepal through this challenging time and strengthening the ability of individual Nepalese to improve their living standards. We urge the leaders of Nepal to bring an end to the political deadlock, complete the peace process and effectively deal with the other ongoing issues constraining Nepal’s development in order to create an environment in which foreign assistance can most effectively be implemented for the betterment of Nepal and its people.

Donors participating include:  Asian Development Bank, Canadian International Development Agency, Embassy of Denmark, Embassy of Finland, Embassy of Germany, Embassy of Norway, European Union, Swiss Agency for Development and Cooperation, the Embassy of Switzerland, U.K. Department for International Development, the United States Agency for International Development, and the World Bank.