Agriculture and livestock development has been a key area of aid for the World Bank, ADB and IFAD (International Fund for Agriculture Development). The Ministry of Agriculture has got help from them for the past decade to work on a dozen projects of which eight have been completed.
Of those still ongoing, the Livestock Sector Innovation Project that is funded partly with a $80 million loan from the World Bank. Although agriculture is a vital sector of the economy, even the Agriculture Ministry’s own evaluation has shown that all the resources poured into increasing production have not yielded expected results. Better off people with political connections in the districts have benefited more than the really needy farmers.
The World Bank has supported Nepal’s Poverty Alleviation Fund for the past 15 years, but a third of its budget was spent on administrative work, and the whereabouts of the remaining remains unknown. Some critics say much more poverty would have been alleviated if the cash was just doled out to the poorest Nepalis.
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Another World Bank funded Rs5.17 billion project to improve food production and nutrition in the western mountains was also found to have benefited only a third of the farmers it was intended for. Documents obtained by Nepali Times show that 47% of the total budget for the 6-year Agriculture and Food Security Project was spent on administrators, consultants, and travel.
Not only did the project not help subsistence farmers increase production, most of the money got siphoned off by well-connected locals. It spent Rs 1.4 billion was spent just on training and workshops. Towards the end of the project, employees spent Rs20 million just on junkets to Vietnam, Korea and Australia. The report also show outright stealing from the procurement budget.
In its own report, the World Bank declared PACT as a ‘moderately unsatisfactory’ project, which might have been a polite way of saying it did not deliver the goods. But no action has been taken on its conclusions. Vice-President of the World Bank’s Multilateral Investment Guarantee Agency Ethiopis Tafera concluded that there had been irregularities in the project’s financial records, but there has been no follow-up.
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Pokhrel says the only way out of Nepal’s donor dependency syndrome is to set up an Agriculture Projects Bank where Nepal’s aid agencies can pool their aid. However, he says donors have opposed the plan. He adds that donors try to replicate development models that have worked elsewhere, but they have not been successful in Nepal because the conditions here are different.
Acharya is even more critical. He says Nepal has to break out of the habit of accepting aid for activities that the country is capable of carrying out itself. He does not agree with the oft-repeated excuse that projects failed due to poor implementation and not wrong policies. He says it is faulty policy itself that leads to poor implementation.
Acharya supports the bilateral assistance models adopted by China, South Korea and Japan during their early phases of development. They required donor countries to help out in projects the governments themselves formulated as per their own long-term development strategies.
A former employee of the Finance Ministry’s Foreign Aid Coordination Department says: “In my whole career I have not seen a single foreign-funded project that has been completed in time, or has provided promised benefits.”