Aid through govt channel down


Apr 25, 2016-

Disbursement of foreign aid from donors who mostly use the government channel has decreased compared to those who heavily use channel outside the government, a report has revealed.

The Development Cooperation Report (DCR) unveiled by the Finance Ministry on Sunday showed Official Development Assistance (ODA) from the World Bank and Asian Development Bank, India, Japan and European Union declined from 2010-11 levels.

Around 99 percent of the World Bank assistance went through the government mechanism, while ADB saw 92 percent of its resources channelled through the government. 

India’ 100 percent and Japan’s 76 percent aid were “on-budget”, meaning these resources were included in the government’s annual budget. The European Union’s funding was fully “off-budget”.

On the other hand, 90 percent of the aid from the US aid agency—USAID—was off-budget, and it was 41 percent in the case of resources received from the UK. 

Asian Development Bank Country Director Kenichi Yokoyama said poor efficiency of government agencies could be responsible low ADB aid disbursement last year. “Last year was a bad year because our disbursement was just $130 million,” said Yokoyama. 

“As an impact of the earthquake, major projects like Melamchi Drinking Water Project and upgradation of Tribhuvan International Airport could not move ahead.”

A representative of a donor agency said disbursement of the USAID and the UK’s funding might have gone up because they invest through non-government organisations.

Experts blame inefficient government agencies for the fall in aid disbursement from key donors. The ADB, which used to be the second largest donor in recent years after the World Bank, stood third in the last fiscal year in terms of disbursement, according to the report. 

The UK came second with a disbursement of $168 million as of February 4, 2016, against ADB’s $147.89 million. 

The experts also blamed ineffectiveness of the government mechanism. Former vice-president of National Planning Commission Shankar Sharma said the government mechanism remains prone to political and bureaucratic process which delays project implementation. 

“Political influence is clearly seen in implementation. When the government changes, implementation slows down,” he said. 

He stressed on the need for simplifying the procedure of utilising aid in development projects to increase disbursement.

Published: 25-04-2016 07:55

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