| Username |
Post |
| Siwalik |
Posted
on 13-Nov-01 01:19 PM
Nepal as a poor country has been a recipient of external aid for developmental purposes. Yet, we still find Nepal dependent on it. Should we encourage such practice of extending a begging bowl to the rest of the world or should we discourage it? Has it been beneficial to Nepal at all?
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| nobody |
Posted
on 13-Nov-01 02:15 PM
Foreign aid comes with a price, the so-called 'structural adjustment'. Which is perhaps more detrimental than mcdonaldization of Nepal, the effect that foreign investment might have.
But with the resources that has been mis-utilized, and resources that's yet to be utilized and our protectionist attitude towards local economy (which sadly is limited to just thoughts and not actions, how proudly we wear Tommy Hilfiger on our chest while we decry consumerism of the West) and our unfounded fear of globalization and global economy, we are left with nothing to do but beg!
But then all economy model fails when one tries to analyze Nepal.
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| Shail |
Posted
on 13-Nov-01 04:36 PM
I've always wondered why these rich countries funnel in so much money to Nepal. What do they get out of it? I mean with mass-media rapantly advertising their products, I'd think there must be cheaper ways to influence Nepali tastes than for them to tossing their dollars in the "donation box." And I find it hard to belive that they do it simply out of the goodness of their hearts. Would luv to hear you intelligent guys' theories.
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| nobody |
Posted
on 13-Nov-01 05:18 PM
oneworld.net and globalissues.com discusses the effects.
But I think it's a bunch of bullshit. I can make words and statistics lie for me anyday. Globalization promotes competitiveness, gives consumers choice and over a long run can balance the differences in local economies. They're just crying foul because they are afraid to compete...
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| joie de vivre |
Posted
on 13-Nov-01 10:17 PM
Shail: Just my thoughts....
I figure rich countries provide so much funding to third world countries for no reason other than to use it as leverage. Take for instance how the US provides exorbitant amounts each year to various Asian countries and how almost every country they've provided aid to has now offered their air space to the US (or given them fueling rights) against their fight against the Taliban. I doubt if the US or any other rich country would funnel so much money into any country if they didn't think they could somehow use those countries as a pawn in their quest for power.
(not the most coherent of sentences but you get my drift.....)
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| Biswo |
Posted
on 13-Nov-01 10:52 PM
JDV ji can be both right and wrong!
If votes on UN are taken as standard, then according to one report published in
Time two years ago, those countries who get most of the US aids (India, Egypt
etc) voted against US most of the times, but those countries like Latvia, Kazakstan
etc who received only a few milions of US dollars voted with US in almost all
resolutions.
Of course, this is US perspective of their aid working/not working in their favor.
You can check UN site for corroborating these facts!
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| joie de vivre |
Posted
on 13-Nov-01 11:00 PM
Biswo: I don't doubt what the UN says but lets face it, the UN is but a mere US puppet.
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| arnico |
Posted
on 14-Nov-01 12:33 AM
>Nepal as a poor country has been a recipient
>of external aid for developmental purposes.
>Yet, we still find Nepal dependent on it.
>Should we encourage such practice of
>extending a begging bowl to the rest of the
>world or should we discourage it? Has it
>been beneficial to Nepal at all?
Here are some preliminary thoughts in response to the original question.
I think whether foreign aid is good or neutral or bad for Nepal depends a lot upon
who decides where and how it is used. Whether Nepal has strong leadership in the government that determines priorities about where aid is NEEDED (sectors where domestic financing, investment, or technical knowhow are not enough), and then actively seeks out willing donors... or whether the donors decide where they want to spend their efforts, and do it on their terms. There are plenty of sectors, and plenty of districts in the country where more aid could be greatly appreciated... districts and sectors neglected by the government itself (just look at where the Maoists have strong support!).... and plenty of places where aid money gets poured in like irrigation water into deep sandy soil.
[Disclaimer: the next two paragraphs are not meant to insult any individual associated with foreign aid. It is a hypothesis about incentives in SOME aid agencies, and if you do not operate in this way, then it is NOT a description of you. I acknowledge that there also many individuals and agencies who have done remarkable self-less contributions without which Nepal probably would not be where it is today... BUT the focus here is on why things are not going better than they are]
One hypothesis (and just a hypothesis at this point) is that the reason for persistence of large amounts of foreign aid, which is arguably not doing enough for the country (and the persistence of the Nepali government's dependence on it), is that there is both a lot of inertia in the homebases of some aid organizations, and a lot of staff who would rather be in pleasant Nepal than in other countries... and that SOME of those staff help ensure (through reports of need in Nepal) that the money keeps flowing... and that they ALSO ensure that the need remains... i.e. that a large fraction of the the foreign aid money goes to salary, renting mansions in Kathmandu, returning as consultants to evaluate one's own projects, seminar catering (keeping government officers well fed and dependent), and perhaps some to constructing infrastructure that is not well maintained and needs to be rebuilt... and NOT to "real development" that builds up local institutional, financial, and maintenance capacity to create independence from foreign aid.
To use a somewhat mean analogy: it is like finding a sick stray dog, and feeding it a little bit of food once a day at your gate. Over time other dogs take over that dog's food sources (let's say the garbage pile down the street), and the dog becomes dependent on your food alone. You now have a reliable dog that gives you some services (guarding your gate who barks when strangers approach)... and you feel good that you are helping the dog... but you neither give the dog enough food that it can get strong enough to go off and fight for its own food, nor do you take the dog in to your yard and really take care of it. Is Nepal treated a little like that stray dog by some of the foreign aid donors? Or WORSE, since some of the aid is in the form of loans that have to be repaid?
How should that dog build up its strength to go get its own food?
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| Trailokya Aryal |
Posted
on 14-Nov-01 01:15 AM
Hi all,
A great discussion. I think foreign aid is good for nepal as long as it is utilized properly and ONLY for projects which we recive the aids for, not on buying pajeros, building houses in the valley for 205 jana shri ek saye aath samsads.
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| Biswo |
Posted
on 14-Nov-01 01:48 AM
Arnicoji:
No wonder Bhutan government accuses Nepal of conspriring to stretch the refugee problem. One of their accusation: "Nepali officers benefit from the aids
flowing to the refugee camps. It is in their interest to make sure this things
perpetuates!"
I once used my source to corroborate this fact. Sadly, a lot of aid agency related
people reluctantly agreed that a lot of officers in aid agencies, and their related
government agencies, are prime beneficiaries of such aids.
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| BP |
Posted
on 14-Nov-01 08:25 AM
I don't see anything wrong with US foreign aid. Are you kidding me? Certainly the US imparts a certain amount of influence with its foreign aid, but would you not be obliged to a friend if you received a gift from him/her? Every country the US interacts with influences it as much as vice versa. The US is a microcosm of the world itself. I live and work here, and am prouder than ever of my heritage. I certainly am not paranoid that the US will take over the world. What's the worst that could happen? That everybody has to speak English and become democratic? They are certainly not going to make everyone the same religion. This doesn't even happen in the US.
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| BP |
Posted
on 14-Nov-01 08:32 AM
Of course, as Biswo pointed out, where this aid goes once "goven" to Nepal is a different story.
But by no means can once call another country "selfish" for wanting to give aid to other countries. It may serve the interests of the donor for sure, but to define the interests is much too difficult. After all, when you go out and do something out of the kindness of your heart, is it selfish? It does make you feel better, doesn't it? Now isn't that in your interest?
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| sunakhari |
Posted
on 14-Nov-01 09:25 AM
The reasons why aid pours into Nepal could be many and we would sound ignorant trying to lump them under one umbrella.
World Bank LOANS us money and of course, forgives (get the technical word on this you geeks :) I'm on selroti mode) some of them. So do many other big organizations. And as Arnico pointed out, some aid flows in merely to feed and house some lousy expat AND some equally lousy nepali hakim/s. Some aid flows in merely to boost the resume of some worthless expat BUT there is still a lot of good being done somewhere in the country. Many of us from "big" cities may not have been the recipient of that but talk to a man from a remote village in Gorkha who has Save the Children to thank for the drinking water that is being brought to his village. And many of us have to be thankful to these foreign aid offices for providing employment and helping us attain some kind of sanity! Imagine working for the HMG and their meagre salary!
Unfortunately Arnico, the stray dog has become so dependent on the food that is being handed out that he refuses to budge from its place at the gate! Who is to blame for that? The person who is (whatever ulterior motive he/she might have) feeding or the lazy dog who has no problem whatsoever relying on the handout??
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| nobody |
Posted
on 14-Nov-01 09:58 AM
it's capitalism, not humanitarianism. And everybody's motive is PROFIT, whether it be governments or MNCs. And if their acts have some benefit, it's not because they are philanthropists, but rather because otherwise, their competition will make them look evil. And because that will strenthen their market share or philosophy. Having said that, the opposite of capitalism (in the form of communism or extremism) just believe in their ideologies and doctrines and enforcing them and they don't even believe in happy customers coming back to them.
Yes the donor country does take some of it back, lot more as salaries for their representatives. But we can't expect these people to adopt Nepalese lifestyle and live on NRS 5000/mo., can we? When foreign countries invest in Nepal, I use invest in a broader context to include all resourses flowing into Nepal, there are always something Nepal has to give up, e.g. cut back on certain social policies (education, agriculture) to repay the debt, or compromise certain value structure for these aids. So any kind of foreign aid does more good than bad.
I disagree with the stray dog analogy though. I wouldn't feed a stray dog because I don't want it hanging around my front yard! It might even dissuade some of the people from coming to my home.
Having said that, foreign investment has more benefits for Nepal than debt, if people want to invest in Nepal. The worst that's gonna happen is, like BP pointed out, Nepal will be more democratic and there won't be any more discussions on whether it's Nepalis or Nepalese! And Everest MoMo will have to compete with McDonald... which might result in improved quality and service at Everst MoMo. If not all the benefits of operation are not seen by Nepal, at least, it'll see some. Which is better than present "none". More jobs will be created. Which may not have minimum wage of $6.25/hr. but still will be better than NRS 100/day.
And the present protectionism mentality, what are we trying to protect? It would make a lot more sense if there was something to...
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| makuro |
Posted
on 14-Nov-01 12:04 PM
This is the great site. I just love it. I found this site couple days ago and I am practically glued to this site.
k kura gareko...Nepal lai Foreing Aid chai halcha ni..natra k garnu...Bhat ko satta dhunga khanu???
Well I heard if you give man a fish, he eats for a day and if you teach man how to fish, he eats for life time. Similarly, Nepal lai "fishing" garne tarika siknu cha. While learning how to fish, Nepal cannot go hungry. Pheri fishing sikunjael summa Nepal khanai napayera moryo vane k garnu?????
Lau Guruji lae kaslai yesai macha marna sikaucha huh? Donor countries have both explicit and implicit interest. For exammple, problem of Aids in the World was considered threat to national security in US last year tira hoina ra? Helping those Aids scouraged country is benifical to both: Donor and receipient country hoinata? Implicit interest chai feeling good about helping needy hoinata???
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| Sujan |
Posted
on 14-Nov-01 05:26 PM
>Nepal as a poor country has been a recipient
>of external aid for developmental purposes.
>Yet, we still find Nepal dependent on it.
>Should we encourage such practice of
>extending a begging bowl to the rest of the
>world or should we discourage it? Has it
>been beneficial to Nepal at all?
This is an excellent debate. And I'm glad to see that more of you are participating with vast inputs. Bravo!
To answer Siwalik's question fully by anyone (as all of you know) will be impossible in this forum b/c of the limited time and space constraints. However, I will try to be concise and to the point:
Here is an analogy that may be easy to follow: generally speaking, loan may sound good in the beginning. To even generalize it farther, think of a mortgage on your house. Some of us may not be able to afford a house without the 'generosity' of our banks. I empashize the word generosity b/c after all, that's what they are being to us...being generous by letting us borrow the money to buy the house. Now this is where we need to break down this word 'generosity' and put it under a microscope and pose this question: how generous are they, really? And this can be found under the terms of your mortgage. What interest are they charging us? What clauses are set forth within this term? Is it transferrable to a new owner in case we happen to sell the house before meeting our obligation? You get the point. So, then our bank may only seem 'generous' depending upon the set terms of our mortgage.
Now then, I turn to Siwalik's question whether foreign 'loans' are good for Nepal. I prefer 'loans' than aids here b/c they are two different animals and require separate explanation. I will discuss aids later b/c aids are grants that do not have to be paid back. You may have different interpretations though. With the help of my analogy above, foreign loans are really then depended upon the terms set forth in the agreement between the two countries when it is drawn up. From difffernet sources that I am aware of Nepal does not turn down too many loans. That should not surprise anyone I hope. But as we all know our finance minister has not done nearly a job he should do to analyze the terms so that it is more favorable to Nepal in the long run without harming other oustanding short term obligations. Now, this is just an icing on the cake. The bulk of the policies of these terms set forth by the lending G7 conuntries come from these three different organizations:
-International Monetary Fund
-The Trilateral Commission
-The World Trade Organization
And of course US is a major investor in all of these three groups. Let me briefly explain what they are, for some of who are not familiar. IMF is like a big brokerage house that lends money to distressed countries. TTC is an organization founded by John D Rockefellar that is made up of 1) The highest ranking US govenrment officials and 2) The CEO's of fortune 500 US companies. The goal of this group is to simply dominate the world by political and financial means. TWT, as its word suggests promotes trade among member countries.
Believe it or not, when Nepal gets loans, the terms are strictly set by these BIG three. As crazy as it may sound, most of the countries they loan money to has not been able to fully repay them. And you may wonder where does part of this money come from? They are the result of a direct investment of fortune 500 countries itself. Others come from surplus funds set aside by the government. Just as you are not able to reapy your debt so you fall deeper into the hole, is what Nepal and many other countries have been experiencing as of late. So, in a way it's a good example of Arnico's analogy about the stray dog. Keep loaning just enough to default, so now the country is under a leash until it can repay the debt. And knowing what the GDP of Nepal is, they will never get around to paying such high debt. This is why there are demonstrations whenever these three try to set up an annual meeting. Most of these demonstrators want them to forgive the debt, but they say no way. And so the cruelty goes on...
Now, the part about the foreign aids. I do not have that much to say on this topic b/c we all know the bureaucratic mess and the corruptions of the govt. of Nepal. If the aids are utilized properly, which I have no doubt some of them are, they would be more than beneficial, but most of this fund wind up in the wrong hands. Then where is that school they were suppose to build or that medical care that the money was donated for? Then fingers starting pointing...and some accountant cooks the books (a term in accounting meaning keeping false accounts).. then that's the end of it. Where is the progress?
There two forces acting here: 1) The donors want Nepal to keep borrowing so that it will never be able to pay it's obligation and 2) Nepal's officials need to have a genuine interest and an analytic mind in borrowing the needed money for a cause with an outlined plan to pay it back, so that this borrowed money and any aid that Nepal recieves are utilized cautiously without any corruptive activity that they are so infamous of. Nepal does not have the ability to control
#1, the donors, but it can certainly streamline the practices of politicians by controlling #2.
So, the answer to Siwalik's question is it's neither, yes nor no, at this point in time. Yes and no can only be answered if the #2 above can be fully satisfied, which I doubt will come any time soon...
-Sujan
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| Rubina |
Posted
on 17-Nov-01 06:57 PM
Sujan.....quite interesting thoughts.
you should run for finance minister of nepal :o)
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| Rajib sharma |
Posted
on 17-Nov-01 10:33 PM
VICTIMS OF AID
Overall THIRD WORLDS scenarios
During the past thirty years millions of rural people in Africa, in Asia, and in Latin Aerica have been forcibly removed from their homes to make space for the expanding reservists of giant hydropower project dam, like ghosts not yet laid to rest, troubled but invisible, the dispossessed still wander from place to place in search of recompense. In Ethopia, Awas Valley, Afar nomads whose traditional dry season pasture lands have been sown with cash crops and surrounded by barbed wire are today reduced to absolute penury, their independence gone. Their way of life shattered, their dignity destroyed as they queue in rags for food handouts. Brazilian Indians whose rainforests have been felled in the name of progress now face genocide, their unique knowledge and skill are about to be lost (almost gone)to mankind for ever. In Indonesia's thousand os Island paradise, tribal peoples are remorselessly being extinguished and priceless ecological resources turned to ash and mud amidst the folly of the largest resettlement program I human history. In Aid for developing worlds has come to mean little more than loss danger and alienation. Now days as a result we are seeing the emergence of a new phenomenon poor people who no longer want to be helped who mistrust and reject the poisoned gifts thrust upon them by outsiders.
Here is true story of aid: "We want nothings from the White man" Said Brazilian Xingu tribe. He has brought us only death, illness and murder; He has stolen our forest. He wants to destroy it all. Franscisco Mendes Filho, r rubber workers and leader of a rural union in Brazil, also opposed the destruction of the rainforest before gunmen hired by the "pro development" lobby shot him death on 22 December 1988:. In place where there are supposed to be rubber tress there is now only one cattle pasture,' Filoho has protested shortly before he has murdered. Now much of the Amazon Basis is already turning into desert; it is only a handful of wealthy ranchers who benefit. This is case of Brazil and Now Aid case of Nepal.
A country has been described as over advised and under nourished, there is a widely held view that experts and consultants are dishonest, lazy, unimaginative, insensitive to local priorities and a result of all this unable to come up with meaningful insights and suggestion, my couples of experience with foreign consultant and experts so called technical advisor demonstrate a lack of commitment, whom those are employed by donor directly, these people are always beholden to the wishes of their supervisors in capitals other Kathmandu, the busiest days of those experts and advisor are with their Hakim visit Nepal. Stronger feelings of resentment and dislike, however, get stireed up when whites are appointed to work that could be done by Nepali. Many highly educated and qualified Nepalese feel that their own skills, experience and motivation are better than those any white and certainly appropriate. They also point out that on a rough estimate aid agencies could hire twenty five to fifty Nepalese experts with the sum of dollars which is given to agri and irrigation development to raise living standard of rural poor people, which sum paid to one white man.
RAJIB
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| Siwalik |
Posted
on 18-Nov-01 01:36 PM
Maybe having posed the question about foreign aid/assistance I should give my own take on it:
Foreign aid/ foreign assistance or international assistance, no matter what the term is, it means reliance on external finance to further "development" plans in Nepal. Sujan rightly pointed out that these assistance can be divided into "loans" and "grants." My conclusion in their effect, whether loan or grant, is that it all depends on how they are utilized. If we are clever and of right intention, and not try to benefit personally ( those bureaucrats and politicians) from this assistance, then they could have positive impact. But if we contintue in the path that has happened in the Third Wrold countries, then mismanagement of these external finances will spell only one thing: DOOM (Rajiv's point).
Now, let me discuss some other aspects of these external capital. I would divide them into two categories:
1. From countries: bilateral assistance ( loans and grants)
2. From international institutions (multilateral assistance IMF, World Bank, ADB etc. -- all loans)
These two categories have their own characteristics and impacts. First one first--Individual countries have been giving aid to poor "developing" countries since the end of WWII. At that time, there was ideological competition to prove which was a better model of development and the two sides were trying their best to attract the developing countries to their ideological camp. Third world countries never had it so good. Even when the assistance was not utilized for intended purposes, the "donor" countries had not much option but to continue on the path of providing assistance, and in cases, forgiving the debt. There have been many literature on this aspect. The current one I find interesting is based on role theory, which posits donor nations self-perception in the international arena as motivations for assisting poor countries. So not all foreign aid are meant for helping poor countries, per se. Let me just outline three motivations:
1. Humanitarian aid (like Netherland)--genuine interest in development
2. Business aid (like Belgium) --Aid is mostly provided to benefit its own interest
3. Power (like U.K.)--aid is provided to buy influence and maintain its power in the world arena.
From the above classification, we can see clearly that developmental aid are not meant for development of poor countries.
Now the ones from the international institutions like the IMF and the WB. Sure, their purported aim is to help also. These Bretton Wood institutions have been at it since the 1950s and they are still at it with not much to show for it. If you look at the transfer of money it is assumed that these institutions transfer money from the North to the South. The reality is that twice as much money has flowed from the South to the North as interest on the debt in the past 50 years.
These institutions have started imposing "conditions" on further assistance, thus undermining sovereignty. The so called "structural adjustment" conditions have not had much success, the poor suffering even more. This whole philosophy of structural adjustment relies on the philosophy of removing state involvement in the economy. This generally means privitizing state-owned industries, cutting off welfare programs and eliminating subsidies to domestic industries. The ideological thinking behind is that creating a free market is the most efficient way to ensure a good economy. But what does it mean to curtail state intervention? Well, interestingly some scholars have looked into that issue and tried to see what is going on. They have found out that "structural adjustment" does not reduce the role of the state in the economy. It just reduces in some area, and shifts into different forms of intervention (You can email me for the literature).
Other literature points out that IMf and WB have their own constraints. They have to be able to disburse the money and be able to point out successful examples of their program and involement and policies. So they can't just withhold assistance. Once they get involved, they need the assistance of the ruling government and hence they develop a tendency to overlook misuse. Besides, as Rajiv gave us his personal insight, these expats do not really care how the "projects" do as long as their own job/perks etc. is safe (Literatare: Fifty Years is Enough).
Now, whether these aid are good. Actually the foreign assistancde have undermined the state in many ways, most importantly in three ways which undermine democratic consolidation. How?
1. Mounting debt means increasing interest. The state has to allocate more and more money to pay the debt. When this ratio keeps increasing, the burden of debt is detrimental to development becuase less money is available for it. The result is financial crisis (Look at Argentina now; it used to be among the ten richest countriees at the beginning of the 20th century). Such crisis undermine the confidence of people in their government and process of democracy.
2. Foreign aid creates a phenomena called the "rentier" states. When a large external capital is chanelled through govt. bureaucracy, it creates a network of beneficiaries. This network, once created, will get entrenched and seeks constant government involvement to protect their own interest.
3. Once governement starts relying on external capital, what it does is governments usually do not have to bargain with the internal political and social actors for policies. Bargaining among social actors is essential for development of democratic society. For instance, since govt. gets external finance, it does not have to tax its own citizen or is inefficient to inforce internal revenue. If it were to inforce internal taxes, it would have to seriously bargain with internal actors and in that process cede or share power with them. Once this constraint is removed by external aid, this vital democratic exercise is undermined.
.....CONTINUED IN 2ND POST CUZ OF WORD LIMIT
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| Siwalik |
Posted
on 18-Nov-01 01:38 PM
continued....
What else? Well, there have been generally two schools of thoughts on international assistance. One called the "transitologist" which believed that it was a good way to "transition" into free market economy, i.e. liberalized economy. The second school was the "sovereignty undermined." But there came a third point of view that said that the aid was not eliminating state institutions, but actually was reinforcing the existing parallel informal network (study of post Soviet Republics), that had been in place during the Soviet era.
Finally, to get a handle on whether international assistance is good for Nepal, I would look for an example where it has been beneficial. One could point out to South Korea, Taiwan and other Asian tigers. But could we then assume that their condition is similar to ours? Do we have the same variables to work with? And in the present situation where we have to operate under WTO regime, how can state-driven model ever be successful anymore? Does that mean we have to find an alternate model? I think so. We need to develop a strategy where state-business partnership can still operate, but under the rule of the changed environment. I think it is possible.
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